The Economic Survey 2016-17 has mooted the idea of introducing a universal basic income in India. There is one whole chapter devoted to the proposal. The idea encompasses an universal and unconditional income transfer to all citizens. This is seen as a way to address the twin problems of poverty and unemployment. The basic feature of universal basic income is that the state provides to all citizens without a means test and without a work requirement.
It is unconditional and not tied to work or employment and it is universal and not targeted.
The Economic Survey, however, gets it all wrong – in terms of purpose of the proposal, alternative welfare measures with the government and the redistributive intent.
In his book, Real Freedom for All, Philippe Van Parijs, the left-liberal political philosopher argues that the basis for universal basic income is the “fair distribution of real freedom to pursue the realization of one’s conception of the good life”.
Existing guaranteed incomes schemes are often linked to employment status and have a threshold level of income, that is, they are means-tested. A negative income tax is the alternative to universal basic income.
There are several distortions in Indian proposal in Economic Survey. It wants universal basic income to replace the existing social welfare and anti-poverty programmes, not supplement it. A crusade for a greater income security should not neglect the importance of quality basic health care and basic education. The Economic Survey’s statement that “universal basic income is not framed as a transfer payment from the rich to the poor.” is another wrong. The resources required would have to come through progressive taxation or consumption tax. Unless the government decides to increase tax resources, a universal basic income is just a diversion from social and economic problems in the country.