FM says universal basic income may not be politically feasible
NEWDELHI: Finance minister Arun Jaitley on Sunday said the idea of universal basic income (UBI) proposed in the Economic Survey 2016-17 may not be politically feasible in today’s India.
Inaugurating a one-week teachers’ workshop on Indian economy at the Indian Institute of Technology, Delhi, Jaitley said this year, the survey sparked an important debate on subsidies. “Should we put money into the bank accounts (of the poor) as we are intending to do at the moment, or should we substitute the entire set of subsidies and instead to a defined section below a certain poverty line, we give them a universal basic income. And that UBI expedites their pulling out of the present state of poverty that they live in,” he said.
Jaitley said while he is fully supportive of the idea of UBI, realising the limitations of Indian politics, it may not be politically feasible. “I have always expressed to him (chief economic adviser in the finance ministry Arvind Subramanian) the fear that once he moots ideas like the UBI, we will be landing in a situation where people will stand up in Parliament and demand continuation of the present subsidies and over and above that, let’s have the UBI, something that the budget will not be able to afford,” he said.
UBI is a form of social security guaranteed to citizens and trans- ferred directly to their bank accounts and is being debated globally. The Economic Survey 2016-17 had proposed the concept of UBI as an alternative to various social welfare schemes in an effort to reduce poverty.
The survey tabled in Parliament on January 31, a day before the budget by Jaitley, juxtaposed the benefits and costs of the UBI scheme. The survey admitted that UBI, based on the principles of universality and unconditionality, is a conceptually appealing idea but with a number of implementation challenges.
The ministry is also debating another idea floated by the Economic Survey — that of establishing a bad bank — Jaitley said. It was proposed in the Survey that all NPAs of banks could be vested in the bad bank, so that the rest of the banking system could carry on with its own activities.