D O L I N G W E L FA R E

If Finland’s plan to give 800 euros a month to citizens works, it will redefine ‘welfare state’

It is an idea that could change the way countries provide subsidies to citizens. Instead of subsidising a variety of services and the costs associated with it, Finland plans to introduce a monthly universal basic income (UBI) of 800 euros tax-free to all adults in the country starting this year. That would mean an annual spend of 52.51 billion euros for the Finnish government. The money will go to all citizens and can be used for anything they want. Under the proposal being considered by the Finnish Social Insurance Institution (Kela), the UBI would replace all other benefit payments. According to research done by Kela, around 69% of the Finnish population is open to the UBI. In return, welfare services will be withdrawn.

It all depends on what all could stop. Currently, there are no tuition fees at universities across Finland, be it for local or overseas students, though there are plans to start charging this year. It also has a generous state-funded medical and welfare services globally. As welfare programmes stop, it is expected to free up resources to fund the UBI. Similarly, the government officials who are responsible for ensuring that the welfare system works will no longer be needed. It is expected to clean up the current system and generate enough funds for the government to pay citizens 800 euros a month. Also, once it starts working and people pay for services, the amount could be increased. Depending on the success of the Finnish model, other countries could follow suit soon. It is a model that India needs to track closely.