Former chief economic adviser Arvind Subramanian devoted an entire chapter to the relevance of universal basic income in the 2016-17 Economic Survey. (Photo: Ramesh Pathania/Mint)
Former chief economic adviser Arvind Subramanian devoted an entire chapter to the relevance of universal basic income in the 2016-17 Economic Survey. (Photo: Ramesh Pathania/Mint)

How the idea of universal basic income gained currency in India's political discourse

  • Finance minister Arun Jaitley in June 2017 said while he is fully supportive of the idea of UBI proposed by Subramanian
  • In January, Congress party president Rahul Gandhi formally put the idea of UBI on the political agenda

NEW DELHI : The idea of guaranteeing a basic income to each individual has appeared and disappeared over the centuries. The earliest reference of the idea is found in the 16th Century novel Utopia (1516) by Thomas More in which the English lawyer and statesman advocated ensuring “some means of livelihood" for every individual to avoid the poor from “becoming, first a thief, and then a corpse".

In later centuries, American revolutionary Thomas Paine (1737 - 1809), American activist Martin Luther King Jr (1929 - 1968), economist Milton Friedman (1912-2006) and many other intellectuals have also supported one or the other form of the idea of basic income.

The idea gained currency in India after chief economic adviser in the finance ministry Arvind Subramanian in the 2016-17 Economic Survey devoted an entire chapter to the relevance of universal basic income (UBI) in the Indian context while maintaining that more debate should take place before embracing the idea.

However, finance minister Arun Jaitley in June 2017 said while he is fully supportive of the idea of UBI proposed by Subramanian, it may not be politically feasible in India.

“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 (advocate), let’s have the universal basic income, something that the budget will not be able to afford," he had said.

In October 2017, the International Monetary Fund (IMF) made a strong case for India adopting a fiscally neutral universal basic income by eliminating both food and fuel subsidies that could cost 3% of gross domestic product (GDP) or 5.6 trillion.

While IMF proposed transferring 2,600 per annum at 2011-12 prices to every person in India, it also highlighted the need for careful planning to overcome “political, social, and administrative challenges", especially because such subsidy reforms involve large price increases.

In January, Congress party president Rahul Gandhi formally put the idea of UBI on the political agenda, after he promised to implement it if the party was voted to power in the forthcoming general election, seeking to outsmart the Narendra Modi government ahead of the interim budget.

On the same day, Subramanian floated a fresh proposal—making out a case for direct cash transfers to 60-80% of the rural poor that would work as an effective cushion against rural distress.

The Modi government announced an income support scheme for marginal farmers named PM-Kisan in its budget presented on 1 February assuring 6,000 per annum to each of the 120 million farmer families in India who own less than two hectares of land.

The scheme, which came against the backdrop of a prolonged period of agrarian distress marked by droughts and nosediving crop prices was, however, considered a poor cousin of the Rythu Bandhu scheme of Telangana and Kalia scheme of Odisha for leaving out the tenant and landless farmers.

Just two weeks ahead of the Lok Sabha elections, the Congress on Monday gave more details about its quasi-UBI, by promising a minimum income guarantee of 6,000 per month to 50 million “poor" families if voted to power.

The proposed Nyay scheme aims to provide 72,000 annually to 20% of the poorest families.

The universal basic income is now firmly etched in India’s political discourse.

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