FinMin debating bad bank, basic income proposals: Jaitley
Finance minister Arun Jaitley on Sunday said the finance ministry is debating the two innovative suggestions made by the latest Economic Survey — Universal Basic Income (UBI) and creation of bad bank — to deal with the unacceptable levels of bad loans.
He, however, said the idea of UBI does not seem to be a feasible policy option at this point of time, given the “political limitations”.
The finance minister also urged policy makers to continuously upgrade their knowledge on different subjects.
“I think it’s equally meant for policy makers because they should also be acquainted with the facts for informed policy making.”
On innovative ideas of the Survey, he said the allocation of subsidies in a targeted manner remains a challenge.
“This year also it )Survey) initiated a very important idea as to how do we subsidise… substitute the entire set of subsidies...we want to replace it by a Universal Basic Income (to a defined section of poor) and that UBI expedites their pulling out of the present state of poverty that they live in.”
The Survey, prepared by chief economic adviser Arvind Subramanian, also strongly pushed for a bad bank in which all non-performing assets (NPAs) — loans that do not yield returns —of the banks are vested so that the rest of the banking system could carry on with its own activities, he said.
“I have been having debates with him on both his current suggestions. I’m fully supportive of his idea (UBI) but realising limitations of Indian politics, I have always expressed to him 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.”