OPIN­ION

A small amount of money in the hands of the vot­ers may turn the tide; it may or may not be UBI

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A small amount of money in the hands of the vot­ers may turn the tide; it may or may not be UBI, writes K Yatish Ra­jawat

“The sim­plest ap­proach will prove to be the most ef­fec­tive — the so­lu­tion to poverty is to abol­ish it di­rectly by a now widely dis­cussed mea­sure: the guar­an­teed in­come,” Martin Luther King noted in the late 1960’s.

Sud­denly in the last few months, voices rec­om­mend­ing Uni­ver­sal Ba­sic In­come (UBI) in In­dia have risen to a crescendo.

The gov­ern­ment, in its last phase in an elec­tion year, is also look­ing at pop­ulist mea­sures. This non-eco­nomic bri­gade push­ing for UBI does not re­alise that in In­dia, UBI can­not be uni­ver­sal or ba­sic and it cer­tainly can­not be clas­si­fied as in­come.

UBI is not a new idea. It has been around since the 1960’s and be­sides ac­tivists like Martin Luther King, con­ser­va­tive econ­o­mists like Mil­ton Fried­man have also sup­ported it.

It has been adopted in de­vel­oped coun­tries, with lim­ited suc­cess. It has caught the world’s at­ten­tion again, as it is be­ing pushed by an in­flu­en­tial bunch of hedge fund man­agers and tech en­trepreneurs.

This crowd feels that their com­pa­nies based on ar­ti­fi­cial in­tel­li­gence (AI), au­to­ma­tion and ro­bots will take over jobs. For in­stance, Sam Alt­man, pres­i­dent of Y Com­bi­na­tor, a suc­cess­ful ven­ture cap­i­tal fund, has a project to give peo­ple free money and see what hap­pens to them over a pe­riod of time.

To di­vert op­po­si­tion from the masses, UBI should be given by gov­ern­ments, is their ar­gu­ment.

In re­turn, these ‘bleed­ing hearts’, want un­bri­dled growth for their tech com­pa­nies. They are look­ing at the fu­ture where there will be fewer jobs for peo­ple and a guar­an­teed ba­sic in­come will come handy.

Repet­i­tive, man­ual jobs on shop floors have al­ready been taken over by ro­bots. Now multi-skilled, but also repet­i­tive jobs like driv­ing, face an im­me­di­ate threat from driver­less cars.

Un­der­es­ti­mat­ing this change will be wrong, as it is al­ready tak­ing place. What is scarier is that AI, which is based on hu­man neu­ral net­work, can take over mul­ti­skilled and non-repet­i­tive jobs as well.

Where does the poor or the farmer fit into this nar­ra­tive? In In­dia, he does not. His oc­cu­pa­tion is not get­ting re­placed, as it is sim­ply not re­mu­ner­a­tive enough. He has an earn­ing prob­lem that UBI is ex­pected to solve.

No­body is against UBI, as it seems a sim­ple way of giv­ing money away to get rid of poverty. Sup­port­ers even see it as a way to re­dis­tribute wealth and em­power groups, whose work doesn’t pro­duce in­come, like stay-at-home par­ents.

The ar­gu­ment against UBI is that those who work and pay taxes, will have to sup­port this. There is also the worry that em­ploy­ers will re­duce wages and politi­cians will use it to ra­tio­nal­ize clos­ing down ex­ist­ing schemes and in­sti­tu­tions. So the ques­tion is, where will the money come from?

Tak­ing into ac­count the fis­cal re­sources that the In­dian gov­ern­ment has, UBI can­not be an in­come; at best, it can be an al­lowance.

Of course, UBI also as­sumes that all other schemes will not be needed. MGNREGA’s Rs 55,000 crore, tar­geted at farm­ers, is a di­rect com­pe­ti­tion to UBI.

There are sev­eral poverty al­le­vi­a­tion schemes for the ru­ral poor – the Prad­han Mantri Awas Yo­jana (Gramin), which pro­vides hous­ing to the ru­ral poor, In­te­grated Ru­ral De­vel­op­ment Pro­gramme or the Na­tional Ma­ter­nity Ben­e­fit Scheme, Na­tional Ru­ral Liveli­hood Mis­sion and sev­eral oth­ers.

It would be po­lit­i­cal sui­cide to end these schemes dur­ing an elec­tion year. There­fore, there will be a very lit­tle di­ver­sion of funds from other schemes.

Most poverty al­le­vi­a­tion pro­grammes are for ru­ral ar­eas. Ur­ban poverty al­le­vi­a­tion pro­grammes are hous­ing re­lated, where BJP state gov­ern­ments have been suc­cess­ful. So these schemes, too, can­not be shot down.

Hence, the UBI will not cover in en­tirety, all the poor sec­tions of so­ci­ety and cer­tainly not all cit­i­zens.

It will not be clas­si­fied as house­hold in­come. It would dam­age the work cul­ture in so­ci­ety, dis­turb the so­cial fab­ric of work-to-earn and not di­rect en­ergy to any pro­duc­tive pur­pose.

An­other rea­son why it can­not be clas­si­fied as in­come is be­cause of its size or quan­tum. The gov­ern­ment does not have fis­cal space to give a very large in­come on a monthly ba­sis. At the most it can be an al­lowance.

Work pro­vides an iden­tity, ego and even san­ity and in­come is the re­ward for work. If this re­la­tion­ship is bro­ken, as it was in MGNREGA, it would cre­ate chal­lenges for the so­ci­ety.

Ap­prox­i­mately 66 per cent of the to­tal pop­u­la­tion, es­ti­mated at 1.35 bil­lion in 2018 by UN, lives in the ru­ral ar­eas. This is more than 89 mil­lion and not all of them can be cov­ered un­der UBI as not all of them are poor, or un­der stress. What will be the amount and will it come from the Cen­tre, states or from the cen­tral gov­ern­ment bud­get?

Four­teen states in the coun­try pay old age pen­sion of less than Rs 500. The high­est bracket of the pen­sion is Rs 2,000 given by small states like Delhi, Goa and Ker­ala.

If the old age pen­sion (Rs 500-Rs 2,000) is taken as the base for this ru­ral al­lowance, then sim­ple cal­cu­la­tion shows an an­nual cost of Rs 2,13,600 crore to Rs 53,400 crore. The al­lowance is com­pa­ra­ble on the lower end with MGNREGA, but will Rs 500 be suf­fi­cient? It seems not. A farm labourer would take be­tween Rs 400 to Rs 600 per day, which works out to Rs 10,000 to Rs 16,000, as­sum­ing there are 25 man days. If the ex­pec­ta­tion of the al­lowance is not set right, this is what they will hope from the gov­ern­ment.

But if this bhar-pai al­lowance has to be given, it has to be an­nounced im­me­di­ately, maybe in the in­terim bud­get. More im­por­tantly, it has to reach the ru­ral pop­u­la­tion be­fore the elec­tion for the BJP to claim its ben­e­fit.

Most poverty al­le­vi­a­tion pro­grammes are for ru­ral ar­eas. Ur­ban poverty al­le­vi­a­tion pro­grammes are hous­ing re­lated.

K Yatish Ra­jawat

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