This article is written by Preeti Pallavi Jena, a student pursuing BSc.LLB (IPR Honors) from the school of law, KIIT University, Odisha. This article talks about the incoming UBI guidelines, its history and impact.
UBI (Universal Basic Income) is a process which will provide an average amount of income to each and every citizen of a country for reducing or decreasing the poverty in India and bringing equality among the people. UBI is a guaranteed minimum income (GMI) system. But it is argued that the guaranteed income will be too expensive and this is the basic reason for not yet implementing UBI. But Proponents believed that it might be expensive as a startup but it will be cheaper in terms of long-run & will be beneficial for the people afterwards, taking into account the concerns regarding the effects of poverty. It will make those people survive who are struggling to feed them and their children. There are 5 basic characteristics for basic income: periodic, cash payment, individual, universal & unconditional.
This concept of UBI is not a new concept. It has been thought from 1951 but still not implemented because of certain disagreements. Many improvements for solving poverty have been made by the government. In recent years Indian government thought of giving direct cash to the bank accounts of certain people by Aadhaar & biometric identification process. Many UBI supporters came from the political sector.
This concept of UBI will help in stabilizing the economy and the government would spend less on conducting awareness programs and more on traditional welfare. Countries like India, United States, Canada, Finland, Kenya, Scotland, Taiwan are thinking and are interested in having UBI for their welfare and development.
A glimpse at the history
70 years ago, Prime Minister Jawaharlal Nehru said that our independent India has to fight against the poverty of our country. India tried the best to do so and after that one in two Indians were approximately poor in the year 1951.
New Delhi took out around 130 million or more than that citizens out of poverty in between the years 1994 to 2012. But still the Indian population is starving out of poverty in today’s time also. India is still considered as home to much poorer than any other country.
To reduce poverty, India made our economic growth stronger, provided public services to people like healthcare, education, pensions etc. It is considered that the society will provide a basic standard income for the livelihood of those persons who are not being able to earn that for themselves.
Thomas Paine is an intellectual architect of America. He was shocked by seeing the way of living of the farmers & he made a lot of efforts to understand their language so that he can understand them much better. In 1795, he said that cultivation is the greatest natural improvement made by human invention. It will be a great help for society. He also mentioned that every person, may be rich or poor should be treated equally and must be awarded with some payments. After a century, Henry George, also an American economist, said no taxes to be paid and a pension must be given to everybody from public funds. He was very much influenced by Paine.
Huey Long, a populist senator proposed in 1934 for giving minimum income to people. In 1953 he used the phrase, “basic income” for the first time. In the 21st century again this concept of basic income came up and the government thought of bringing UBI for the welfare of the state, to remove inequality among people, and also to remove poverty.
Anatomy of UBI
It is a combination of 3 things: Universality, Conditionality and Transfer of modality.
Universality is about ‘everyone is covered’. It means that it should cover the whole society. In case of health problems, the motive is to provide insurance to everyone. Even when people will fall ill they will receive services. This principle has to be applied in unemployment sectors, pensions etc. people will be benefited by such insurance because they will get help whenever needed as promised. Social community refers to the programs made for children or elderly people. The eligibility of these programs requires nothing but only the age. This is not for all, the people who do not fall under these criteria are not included.
UBI represents an easy process achieving universality. Universality is a social protection that lies everywhere in the world. It needs to be more progressive & will ensure that everyone receives support when required.
Conditionality is not only about a child’s responsibility, it’s also for community service, training, job search requirements. All these public works are also considered as conditionality. Our society is set up with certain rules and regulations like pay taxes and receive services, work hard and care for others. These can be the conditions of social services regarding unconditional health, education or child care. These conditions can contribute to the acceptance of cash transfer by the general public. The conditional transfer needs an institution capable of further application.
The main criticism of UBI
- It is quite expensive;
- Would reduce or eliminate labor participation;
- There may not be an increased standard of living in future due to such distribution of money;
- This free income will give people an option of not working which will make them lazy and more confident of not working and getting money;
- There will be no difference between a hard working person and a non-working person.
Cash payments increase the welfare of recipients than transfer in kind of equal cash value, this has been found out in a survey of economists which is agreed by 84% people. It clearly says that cash is flexible in nature & it also gives people an opportunity to think and decide how to speed the amount.
The more demand for cash transfers tends to higher health costs since there is a limited supply of well-trained health providers.
In 2009-2010, a survey was made, in which there was a discussion regarding replacing the subsidies with food coupons or direct cash transfers. This idea is now implemented. This idea of basic income brought the attention of Prime Minister Narendra Modi on demonetizing the country’s high-value currency bills.
Choices of other Parameters
The 3 main choices that define a UBI which are universality, conditionality, and transfer modality. But there are also many other parameters available. Those are:
- The level & frequency of benefits;
- The inclusion of children;
- The inclusion of citizens;
- conducting the program for adults only.
These parameters are to be also considered with the other 3 factors. These factors will help to understand how a UBI would fare in a context.
Three Stylized narratives on UBI
There is a lot to deal with when it comes to social assurance in many years. The noteworthy social help programming and going with the effect of evaluation document the huge and assorted effects that all around planned and executed. There is a sensational development in the mechanics of usage and expanded aspiration for advancement with e-IDs, e-installments, and dynamic and broad social registries associating customers with numerous programs.
Regarding coverage, one beginning stage for investigation is the administrative design or on the other hand the rights plan. For example, under Sustainable Development Goal 1.3, signatories are resolved to “actualize broadly fitting social assurance frameworks and measures for all, including floors.” Similarly, the Social Protection Floor activity embraced by the UN Chief Executives Board in 2009 requires a coordinated arrangement of social strategies to turn out fundamental revenue security and access to basic social administrations for all, giving particular consideration to weak gatherings.
Universal social protection can be achieved by multiple pathways. A combination of contributory and noncontributory schemes could make a universal social protection system. Social assistance consists of a large number of individual programs. Our country has a multiplicity of social protection programs due to several reasons. They are poverty prevention, making income work smoothing, increasing the laborers income, forming human capital etc.
Automation and Labour market disruption
The labor market includes 3 main things: automation, stagnant and low wages. These are included for making the workers earn significant independent incomes. They hence focus on adults and not children. The labor market rationale for a UBI of central importance because jobs will help in reducing poverty and shaping deeper societal identities. Social insurance was made, assuming for a stable and full-time employment of workers.
Technology is a source of anxiety, mainly in western societies. These fears are recorded. The industrial revolution, workers have existed with the threat of an ever-growing machine in presence of service jobs, agriculture, and manufacturing. The corporate labor of employment also declined between 1975 to 2012, including 3 quarters of advanced economics and two-third of developing countries.
In Latin America and the Caribbean, such types of business have been for the most part stable in the course of the most recent twenty years, while less homogeneous in Eastern Europe and Central Asia. However, in various creating nations, the center test to the Bismarckian model isn’t really presented by the burdening of work markets and computerization, but by unavoidable things. In fact, 81 and 46 percent of laborers hold casual positions in low-and upper-class nations, individually.
In the given idea of the test and the moderate advancement against it, new insightful work contends that many people would be in an ideal situation with a social assurance framework that doesn’t rely upon their work circumstance.
A thread in UBI is called a dividend model which has analytical attention and practice including the national levels. In many cases, there is limited public awareness of the level of such revenues and their use. For addressing the dual problem of state-citizen accountability, inefficient subsidies. The policy has suggested redistributing the oil revenues to the whole country in the form of UBI and taxing it back to finance public goods. Taxation provides better service by the state.
Mongolia is perhaps the single country that had a full-fledged UBI, this program was started in 2010-2012. This distribution of natural resources is not necessary to be motivated by efficiency gains, but by social and environmental purposes.
- Social Approach: This is the technique for strengthening the social form with a common purpose. This is similar to Thomas Paine’s version.
- Environmental Approach: Several methods of a tax and dividend carbon policy are made. If a carbon tax is made to be implemented for climate benefits, then what will happen to revenue comes to mind. Where these carbon tax revenues are distributed on a per capita basis, there will be a redistribution of it. This provides a link between UBI and climate change.
UBI binds or creates a bond of understanding between the government and citizens of society. It brings social and economic justice. For the implementation of UBI, not only we need to plan but together think about it or else no such new process can take place in India. This UBI will strengthen our country & will also empower the citizens of India. This will reduce poverty and make workers’ livelihood easier. This will reduce the time period of work and each individual will get support from UBI and the state. This idea of minimum guaranteed income to everyone will help to develop our country and people will no more be homeless or will have to sleep without food. It can be a great turnover. This coronavirus pandemic brought more urgency for the implementation of UBI since many are unemployed & are struggling financially across the world.
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