Universal Basic Income is not feasible for India
Instead of a Universal Basic Income, what India needs is rationalization of subsidies, better targeting, and operational efficiency
The International Monetary Fund (IMF) has added its bit to the ongoing debate on Universal Basic Income in India. Universal Basic Income is seen by many as an alternative to the existing system of subsidies, which is often associated with systemic inefficiencies. The latest Fiscal Monitor of the IMF, in its analysis, used fiscal space equivalent to the cost of the public distribution system and energy subsidies in 2011-12. It showed that this can finance an annual Universal Basic Income of Rs2,600 per person, which is equivalent to about 20% of that year’s median per capita consumption, with the estimated cost at about 3% of the gross domestic product (GDP). The Fund did not account for the subsidy reforms of recent years.