Ensure a minimum income for all


Issue?

  • The idea of a universal basic income (UBI) is gaining ground globally.

  • It has supporters among the political left and right, and among proponents as well as opponents of the free-market economy.

What is Universal Basic Income?

  • A UBI requires the government to pay every citizen a fixed amount of money on a regular basis and without any conditionalities.

  • Millions of people remain unemployed and are extremely poor, despite rapid economic growth in the last three decades.

NOTE

The National Democratic Alliance government has already unfolded a limited version of the UBI in the form of the Pradhanmantri Kisan Samman Nidhi Yojana (PM-KISAN) which promises ₹6,000 per annum to farmers who own less than 2 hectares of land.

Arguments Against UBI?

  • The UBI is neither an antidote to the vagaries of market forces nor a substitute for basic public services, especially health and education.

  • There is no need to transfer money to middle- and high-income earners as well as large landowners.

Arguments in favor of UBI?

  • There is a strong case for direct income transfers to some groups who suffer from multi-dimensional poverty.

  • Landless laborers

  • Agricultural workers

  • Marginal farmers

  • These groups have not benefited from economic growth. They were and still are the poorest Indians.

  • Various welfare schemes have also failed to bring them out of penury.

Access to institutional credit [Issued by banks and cooperative societies]

  • According to National Sample Survey Office (NSSO) data from the 70th round, institutional credits account for less than 15% of the total borrowing by landless agricultural workers; the figure for marginal and small farmers is only 30%.

  • These groups have to borrow from moneylenders and adhatiyas at exorbitant interest rates ranging from 24 to 60%.

  • As a result, they do not stand to benefit much from the interest rate subsidy for the agriculture sector.

NOTE

  1. The Socio-Economic and Caste Census (SECC) 2011 can be used to identify the neediest.

  2. Groups suffering from multidimensional poverty such as the destitute, the shelter-less, manual scavengers, tribal groups, and former bonded labourers are automatically included.

  3. The dataset includes more than six crore landless labourers.

  4. It also includes many small farmers who face deprivation criteria such as families without any bread-earning adult member, and those without a pucca house.

  5. The other needy group, small farmers, missing from the SECC can be identified using the dataset from the Agriculture Census of 2015-16.

  6. Together, these two datasets can help identify the poorest Indians, especially in rural India. However, many households such as marginal farmers belong to both datasets.

  7. The Aadhaar identity can be used to rule out duplications and update the list of eligible households.

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