The Finance Minister of the northern Indian state Jammu and Kashmir (J&K) has endorsed what he calls a “universal basic income” — which would entail the replacement of existing subsidies with direct cash transfers — for all residents currently in poverty.
Haseeb A Drabu, CC BY-ND 2.0 worldsteel
Finance Minister Haseeb Drabu presented the J&K state budget in a speech on Wednesday, January 11. The budget proposals included what was called “universal basic income”, though Drabu also stated that this universal basic income would be distributed only to those living below the poverty line.
As the economist Himanshu (Jawaharlal Nehru University) noted in remarks to Mint, Drabu’s proposal is more properly designated a “targeted cash transfer” rather than “universal basic income” (which he called a “European concept”).
Although Drabu’s proposed reform is not universal, the use of direct and unconditional cash transfers in poverty relief would be a significant step in the direction of what is more traditionally called “basic income”. Further, like many economists and politicians who are attracted to the idea of a basic income for India, Drabu defended the policy by pointing to inefficiencies in the nation’s current systems of aid. He was reported in the Indian press as stating, “Not only will it [direct cash transfers] eliminate all the leakages, the cost of delivery will also be reduced dramatically.”
Drabu also said, however, that executing the plan for a cash transfer system would require “not only concurrence but help from the central government as well”.
This might not be an unrealistic hope. The national government of India has expressed murmurs of interest in universal basic income, which will be a theme of the Economic Survey released at the end of this month. In recent weeks, some misleading reports in the news media have suggested that India has already endorsed or is about to implement a basic income; most of these reports, however, were based on a misconstrual of remarks reported in an interview with economist and BIEN cofounder Guy Standing. Standing has since clarified his remarks in an editorial in The Financial Express and in a statement on Basic Income News.
References
Asit Ranjan Mishra, “Jammu and Kashmir commits to idea of Universal Basic Income,” Mint, January 12, 2017.
“Budget initiates radical restructuring, reforms,” Greater Kashmir, January 12, 2017.
Article reviewed by Danny Pearlberg.
Cover photo: Chatpal, Kashmir by sandeepachetan.com, CC BY-NC-ND 2.0