Home » News

Is UBI the USP of this year's Economic Survey?
February 22, 2017

The idea of a Universal Basic Income has emerged in India’s Economic Survey 2016–17. Will UBI be the most significant economic outcome for the poor in recent times? 

 
Does the recently released Economic Survey evoke the jingling sound of falling coins in your ears? On the face of it, the flagship annual document of India’s Ministry of Finance, a serious analysis of the Indian economy over the last fiscal, is likely to have only a metaphorical connection, if any, with silver currency. But the analogy is not as far-fetched as it seems. The suggestion made in the Survey by the Chief Economic Adviser, Dr Arvind Subramanian, to introduce Universal Basic Income (UBI) in India actually takes one back to the momentous afternoon of 4 October 2013. On this day, members of the activist group Generation Grundeinkommen dumped 8 million 5-cent coins (representing each citizen of Switzerland) on the Bundesplatz, a public square in the Swiss capital, Bern. The episode was intended to draw attention to the widespread demand for incorporating the concept of an unconditional income guarantee for all adults in the Federal Constitution of Switzerland, compelling the Swiss Government to subsequently hold a referendum on the issue. Although the measure was eventually rejected in the referendum held in June 2016, with 76.9 per cent of the population voting against it, the idea of UBI has caught on across the world, most recently emerging in India’s Economic Survey 2016–17. 
 
Dr Subramanian argues, “UBI is a powerful idea whose time even if not ripe for implementation is ripe for serious discussion.”

Albeit, the concept of UBI is not a new one. The idea of a guaranteed minimum income in the form of public assistance can be traced as far back as sixteenth-century Europe, when it was raised by the political theorist Thomas Paine, and re-appeared intermittently throughout the nineteenth and twentieth centuries. Only now, however, does the idea appear to be entering the political mainstream in many parts of the world. Propounding it as a potential tool against poverty, Dr Subramanian argues in the Survey that “UBI is a powerful idea whose time even if not ripe for implementation is ripe for serious discussion.” He goes on to say that Mahatma Gandhi, as the embodiment of universal moral conscience, “would have seen the possibility of UBI in achieving the outcomes he so deeply cared about and fought for all his life…” as long as macroeconomic stability would not be jeopardised. 
 

Use of IHDS data  

The Survey uses data from the IHDS to evaluate the value of public subsidies and the possibility of curtailing them thro Download pdf