Universal Basic Income not necessary for India: CEA

New Delhi, Jun 10: Chief Economic Advisor V Anantha Nageswaran Friday said the concept of Universal Basic Income (UBI) was not necessary for India since natural economic growth would take care of the country’s many aspirations.

 

 

 

At an interaction organized by the Confederation of Indian Industry, he ruled out a UBI scheme and said it may create ground for “perverse incentives” and dissuade people from seeking income-generating opportunities.

 

 

 

“For our country, when natural economic growth should take care of many of the aspirations, it (universal basic income) may not be necessary. We may be creating the ground for perverse incentives for people to not make their effort in seeking such opportunities. So therefore, universal social security for India is not something that should be on the agenda in the near term,” the CEA said. Nageswaran said support should be confined to those who may not be able to participate in economic activities and bring them up to a point where they can meaningfully engage in the economy. India has not reached the stage where it is a moral or economic necessity to have universal social security, he said. For a developed country, which doesn’t have income-generating opportunities and employment-generating opportunities, the state may have to step in and provide the universal basic income kind of coverage. During the first term of the NDA government, Arvind Subramanian, who was the CEA then, had proposed the idea of universal basic income to citizens. In the Economic Survey 2016-17, he advocated UBI to cover every citizen’s basic needs, making it easier to administer compared with the many existing anti-poverty schemes. In the survey, Subramanian said the Central government alone ran 950 central sector and centrally sponsored sub-schemes which cost about 5 percent of GDP. Observing that there may be intrinsic limitations in the effective targeting of schemes, he argued that serious consideration be given to the idea of UBI, which may be an effective way of achieving Mahatma Gandhi’s objectives of “wiping every tear from every eye”.

 

Also Read: RBI keeps the repo rate unchanged at 6.5% 

 

Ahead of the 2019 Lok Sabha elections, Congress with Rahul Gandhi as its President then did promise a minimum income support program or Nyuntam Aay Yojana or NYAY under which Rs 72,000 will be transferred to the poorest 20 percent or 5 crore families in the country.