UBI i.e. Universal Basic Income is gradually gaining currency, emerging as an idea whose time appears to have come. Even Economic Survey 2016 presented to Parliament devoted an entire chapter to the emerging concept. Intransigent poverty and recurring unemployment happen to be at the root of this concept to assure a minimal level of subsistence and dignified too if possible without inviting adjectives like state subvention or unemployment dole only to monetize lethargy and refusal to work hard.
Philippe Van Parjis happens to be a left-liberal political theorist who vehemently propounded the concept in his book, Real Freedom For All as an instrument to assure, “fair distribution of real freedom to pursue the realization of one’s conception of the good life”. In a simple, easily understandable language, UBI allows anyone to pursue life of his / her liking once means required for a dignified basic survival is ensured independent of his / her state of employment. Most conspicuous aspect of UBI is it’s being completely devoid of state conditionalities, non-discriminatory and universality. The idea has been first implemented by Kela, a social security agency in Finland where every unemployed citizen in 25-58 age group is awarded UBI 560 Euros pm irrespective of any “work requirement” whatsoever. Pilot project includes some 2000 unemployed youth who shall retain the incentive even after they happen to corner employment. All existing livelihood guaranty schemes are accessible only to those who qualify criteria like minimum income threshold and employment status. UBI stipulates complete absence of employment status as well as minimum income threshold. Those who oppose UBI apprehend, low-wage / minimum wage jobs would become an anathema in addition to burgeoning fiscal deficits stoking inflation while champions of the concept harp on the possibility of bureaucratic lethargy and improper targeting of social welfare schemes to be taken care of by UBI.
In the Economic Survey 2017, Finance Minister Jaitly appears to have added an altogether new dimension to the evolving concept of UBI as he has envisaged it as a collective substitute of entire spectrum of social welfare schemes and not as an additional source of assured income, “a number of implementation challenges lie ahead, especially the risk that universal basic income would become an add-on to, rather than a replacement of current anti-poverty and social programmes”. With this dimension weighing heavily in the mind of Government, UBI shall not be a supplementary income to raise standard of living but one, single-point replacement of all state subventions thereby, restricting quality of life and standard of living approximately at the same level as before. This dimension has precisely negated the very foundation of UBI as Parijs said, “A basic income is provided in cash, it supplements rather than substitutes existing in-kind transfers such as free education or basic health insurance.” This newer aspect to UBI also opens the door to intense scrutiny as to whether UBI is so sacrosanct that it’s Cost & Benefit Analysis is above board as well as whether it is ethical or moralistic to compare it with entire range of state interventions regarding PDS, Mid-day meals, ICDS, sanitation, education etc. Once this scrutiny is over, next loud question stands alone, whether UBI should be extended as a replacement of or as supplement to all state financial interventions. Internationally, it is proposed and envisaged to address issues of employment and minimum income guarantee schemes.
As no lunch is free and one has to pay for every glass of water that one drinks, resources to stand for UBI will have to come from the relatively affluent sections of society. When the resource is added to the tax base, affluent sections not only finance UBI for the deprived ones but also for themselves. For the affluent ones providing resources for UBI, it is their own tax payments that revert to them as their UBI. There may be more than one way to raise resources for UBI viz. progressive taxation, consumption tax or a specifically ear-marked tax however, fundamental source of the resource remains the same, the rich have to pay for UBI for all, including themselves. Universal basic income thus distributed to all, ensures nation transfers resources from Have-Too-Much to Have-Nots in a fair, transparent and equitable manner. When basic philosophy of UBI boils down to redistribution of surpluses equitably, be that a measure of supplement or replacement, is a matter of policy decision for any Government.
What precisely is the factor that inspired springing forth of Universal Basic Income ? Trigger for UBI to burst into existence lies at the root of failure of grand economic ideologies of capitalism as well as socialism. Capitalists may embarrassingly like to proffer UBI as a softer face of market / competition driven ideology of Survival-Of-The-Fittest so as to enable Have-Too-Much sections to have more with murmurs of protest subdued. On the other hand, socialists may be constrained to proffer UBI as a confession of abject failure of the ideology of All-Are-Compulsorily-Equal and State-As-The-Only-Owner of all resources. After all, intrinsic virtue of capitalism is unequal sharing of blessings while that of socialism, unequal sharing of miseries !! I just dream, I wish they had scrutinized socio-economic philosophy of ‘Ekatma Manavavada / Antyodaya’ propounded by Pt. Deendayal Upadhyaya in great details. Such a dilemma would not have been there then.
Prof. Martin Feldstein of Harvard University is not really enamoured of the concept. He holds it an enormously expensive state subvention requiring at least $3 trillion to implement that in the USA. He does not favour even job guarantee programmes as being in vogue in Bharata. Country has a massive population of 125 crores compared to 5.4 million in Finland and a steady track-record of missing several opportunities of industrial resurgence. Extensive automation particularly through robotics is not only raising productivity but also number of idle, jobless hands every year which may pose grave socio-economic challenges to Government. Some State Governments have been offering unemployment benefits from Rs. 1000 to Rs. 2500 /- pm knowing very well that at best, these measures merely postpone impending crisis till next elections. Even at MGNREGA rate of guaranteed employment for 100 days, at the wage rate of Rs. 170/- per day, 300 million household shall demand resources to the tune of Rs. 5,10,000 crores while allocation is mere Rs. 48,000 crores !! Numbers shall be nerve shattering for the urban youth with rising expectations of higher standard of living. That poses a severe dilemma for the Finance Minister whether UBI is to be taken up as supplement or replacement. Ostensibly, resource base must be widened multiple times before such a mammoth state subvention is undertaken. We must not fancy advanced albeit small countries like Finland where it is being implemented currently as there is no comparison between Finland and our country.
It would be amply appropriate that universal basic income retains it’s identity as universal for all sections of society and unconditional without being restrained by constraints of any kind whatsoever.