India’s Institute for Human Development (IHD), an independent nonprofit research organization, held a roundtable on universal basic income (UBI) on July 10 in New Delhi.
More than 80 politicians, academics, researchers, and other experts participated in the event, which featured keynote addresses from Pranab Bardhan (University of California Berkeley), Vijay Joshi (University of Oxford), Arvind Subramanian (Chief Economic Advisor of the Government of India), and Renana Jhabvala (Self Employed Women’s Association), as well as panel discussions and debates.
UBI has attracted serious attention in India in recent years, due to the success of pilot studies in Madhya Pradesh in the early 2010s, as well as a widespread view that India’s current system of targeted welfare benefits and price subsidies is wasteful and inefficient. Published in January, the 2017 Economic Survey, an annual document prepared by the Ministry of Finance, devoted an entire devoted an entire chapter to UBI, reviewing arguments for the idea, challenges of implementation, and strategies for introducing possible stepping stones to UBI in India. Finance Minister Arun Jaitley has recently stated that UBI is not feasible in the country due to “political limitations.”
The IHD roundtable event began with an inaugural address by Bibek Debroy of National Institution for Transforming India (NITI Aayog), a think tank of the Government of India.
This was followed by four technical sessions organized around the work of Bardhan, Joshi, Subramanian, and Jhabvala, respectively.
Pranab Bardhan, CC BY-NC 2.0 UNU-WIDER
Bardhan maintains that a UBI of about a thousand rupees (about 15.5 USD or 13.5 EUR) per month can be afforded by increases taxes on the rich and ending certain government subsidies that primarily benefit the better-off. He cautions, however, that the UBI should not replace all current welfare programs nor divert funding from public goods and services.
Three panelists–Abhijit Banerjee (Massachusetts Institute of Technology), Abhijit Sen (formerly of India’s Planning Commission), and Ajit Ghose (Visiting Professor at IHD)–discussed Bardhan’s proposal following his presentation.
Vijay Joshi, CC BY 2.0 Chatham House
In the second technical session, Joshi laid out the model of UBI developed in his recent book,India’s Long Road: The Search for Prosperity, which he calls a universal basic income supplement (UBIS). Joshi proposes a UBIS of 3500 rupees per person year (at 2014-15 prices) to replace most price subsidies and targeted welfare programs (“retain[ing] only those of proven worth”). According to his calculation, the UBIS would cost of 3.5 percent of India’s GDP.
Panelists who discussed Joshi’s ideas included Amarjeet Sinha (Secretary of the Ministry of Rural Development of the Government of India), Dilip Mookherjee (University of Boston), and Swaminathan Aiyer (author and columnist).
Arvind Subramanian CC BY-SA 2.0 PopTech
The third session focused on the proposals in the Economic Survey, written by Subramanian. (Subramanian himself was unable to participate in the event; however, an aide delivered a presentation on this behalf.) Whereas both Bardhan and Joshi argue in favor of universality, the Economic Survey’s proposal is written under the assumption that, in practice, no program can achieve full universality; thus, it ultimately focuses on a “de facto UBI” with a “quasi-universality rate” of 75 percent. In the document, Subramanian considers several methods by which to phase in a (de facto) UBI, such as introducing the program first only for women or members of other vulnerable groups, or only in urban areas, or allowing beneficiaries of current welfare programs to opt instead for unconditional cash transfers.
Panelists on the Economic Survey proposal included Ashwani Saith (Institute of Social Studies, The Hague), Rohini Somnathan (Delhi School of Economics), and Shekhar Shah (National Council of Applied Economic Research, New Delhi).
Renana Jhabvala, CC BY-NC-ND 2.0 ILO in Asia and the Pacific
Finally, Jhabvala presented “perspectives from the field,” reviewing the results of the UBI pilots conducted by SEWA in rural villages in the state of Madhya Pradesh. Contrary to worries that a UBI would lead to higher spending on temptation goods, the pilots revealed no increase in alcohol consumption. Furthermore, the short-term UBI was associated many positive effects, including better nutrition, a decrease in serious health problems, higher rates of school attendance, lower debt, and greater job opportunities, especially for women. A follow-up study conducted earlier in this revealed several lasting effects in the villages in the study, as compared to control villages; these included higher incomes, especially for women, and lower rates of alcohol consumption. Other effects, however, were seen to have ended quickly after the termination of the pilot program, such as increase enrollment of children in private schools.
Panelists on the SEWA pilot study were Jeemol Unni (Ahmedabad University, Institute for Rural Management Anand), S.M. Vijayanand (Former Secretary, Panchayati Raj, Government of India and Former Chief Secretary, Government of Kerala), and P.K. Joshi (International Food Policy Research Institute, New Delhi).
A closing session, chaired by MP Jay Panda, was held after the four technical sessions.
For more information, see the IHD website, which includes a press release summarizing the event, as well as a booklet containing a full schedule, speaker and panelist bios, and background reading for all keynote lectures.
India’s Finance Minister, Arun Jaitley, has commented on the nation’s most recent Economic Survey, tabled in Parliament on 31st January, 2017. He himself presented it, just before the day on which the Indian budget was presented, and its contents were discussed previously.
Universal basic income (UBI) has been gaining attention in India in the past few months, and the first Indian National Conference dedicated to UBI was held in March of this year. In his recent remarks, however, Jaitley expressed concern that UBI may not yet be feasible, due to “political limitations”. It’s unclear at the moment what might be causing this “political limitation”, although other leading Indian economists, such as Amartya Sen, have also expressed doubts about the implementation of UBI in India. In spite of this cautious declaration, Jaitley has also said, “I’m fully supportive of his idea (UBI) but realizing limitations of Indian politics”.
While some economists such as Sen and Jean Dreze have been skeptical about UBI as a possible social policy option for India, others such as Pranab Bardhan, Sudipto Mundle and Vijay Joshi have recently prescribed UBI for the country.
The Economic Survey, a document prepared by Chief Economic Advisor Arvind Subramanian and his team, holds that UBI is a powerful idea, although not ready for implementation. It also states that UBI can be “an alternative to a plethora of state subsidies for poverty alleviation”, and that it “would cost between 4% and 5% of GDP”. It also discusses some options to phase in a UBI in India. These key points about UBI in Economic Survey can be read in this short summary.
In an interview on March 27th with journalist Govindraj Ethiraj from BOOM, Baijayant “Jay” Panda, a member of Indian Parliament representing the Biju Janata Dal Party, explains his view about the potential benefits of an Indian Universal Basic Income (UBI).
“The 7.1% growth rate India has today does not create the number of jobs it used to ten or twenty years ago,” Panda explains. The global phenomenon of technological development has made UBI a hot topic in economics around the world for the last two or three years.
At the same time, the subsidiary system in India is very inefficient. Based on a planning commission’s study 5 years ago, Panda estimates that out of every rupee spent by the government, only 27 paisa reach the citizen. “That means that 73 paisa goes away in salaries, overhead, and corruption, and leakage. We have only seen tremendous success in for example the use of Aadhaar (an identification system based on biometric and demographic data) and converting the subsidy on LPG cooking gas and instead of giving cylinders, you give cash directly to beneficiaries and get it on the market. You can see the same kind of turn around in kerosene subsidy and other subsidies.”
Panda continues: “The argument that has been put out by many economists around the world, many of Indian origin, is that suppose you came up with something like a thousand rupees per month per citizen, maybe universal, maybe targeted, then you bring them above the basic poverty line and beyond that you focus on all the other aspirational things citizens have, such as getting jobs and education.”
But should this income be universal or targeted to a specific group? There are pros and cons on both sides, Panda argues.
“Why would somebody like you or somebody like me need to have a thousand rupees of basic income given by the government? The argument in favour of a UBI is that we waste too many resources and too much effort trying to target. You have armies of lower level government officials going around in the districts counting who has a house, who has electricity, who has a fan, who has a scooter, trying to decide who deserves a subsidy and who does not. If you make it universal, you save enormous effort. There is also enormous leakage in the system. People like you and I will most likely not take the thousand rupees per month, but those who need it, will take it.”
Panda is open to the idea of targeting as well, though, and states that with technology, like the use of Aadhaar, it is perhaps possible to target much better today then it was ten years ago. “We don’t have to go universal at one go. We should keep on extending the use of technology to target the most leaky, the most corrupt subsidy.” The kerosene subsidy is a perfect candidate for such a pilot, according to Panda.
He compares the Indian situation with the US and Europe and explains why the situation in India is different. “If you look at the US or Europe, they have large social service expenditures, which are relatively efficient. In our case, we have a lot of low hanging fruit of inefficiency so that it is a win-win scenario. A UBI in India can be funded from the savings of the current systems. The fiscal deficit is not going to get worse. In the US and Europe, they have to take something away from the citizens. Here in India we are not taking anything away because whatever subsidies we have, it is mostly being leaked so it is not reaching the citizens anyway.”
On March 29-30th 2017, the India Network for Basic Income (INBI) and Self-Employed Women’s Association (SEWA Bharat) held the first national conference on universal basic income (UBI) in India. During the conference a series of panel discussions and lectures were held, debating and exploring a range of issues concerning basic income in India. The two-day conference was held at the India International Center in New Delhi.
The conference comes as basic income proposals in India have increased in popularity. For example, this year India’s annual Economic Survey included an entire chapter on the prospects of a universal basic income in India. India’s finance Minister, Arun Jaitley, presented the survey which describes the state of the economy from the previous year, and its prospects for the future. The chapter on basic income was authored by Arvind Subramanian, the Chief Economic Advisor to the Government of India. To read more about the economic survey, see Basic Income News coverage here.
Below are a few of the lectures and discussions from the conference that were presented in English. To see the full range of lectures at the conference, see INBI’s YouTube channel here.
Subramanian is the Chief Economic Advisor at the Ministry of Finance. In this recorded speech, he delivered the inaugural address for the conference, in which he outlined the three most attractive features on UBI in his eyes: 1) Universality, 2) Unconditionality, and 3) Agency. He also argued that UBI in India could only be made affordable if it were to replace at least some existing welfare measures.
Drabu is the Finance Minister of Jammu and Kashmir regions in India. In this speech, he explored the ‘fundamental’ question: can India pool all of its social spending to create a basic income for people below the poverty line?
Standing is a Research Professor at SOAS, University at London and Co-founder of the Basic Income Earth Network (BIEN). According to him, these are the three major justifications for UBI:1) Social justice (reduction of inequality), 2) Enhancing republican freedom and 3) Increasing the economic security of recipients.
Cherian is the CEO of HelpAge India. He made a case in favor of UBI for senior citizens, by addressing the question of whether senior citizens should be the first to receive a basic income.
Gokarn is the Executive Director at the International Monetary Fund. Although he did not openly advocate a UBI, he did argue against categorically rejecting UBI.
Virmani is the former Chief Economic Advisor to the government of India. He argued that poverty alleviation has failed and what is needed is poverty elimination. He called for a UBI to replace the hundreds of poverty alleviation schemes at work in India.
Photo Credit: (AP Photo/Channi Anand)
India Network for Basic Income jointly with SEWA Bharat is organising a National Conference on “Basic Income in India” in New Delhi on March 29 and 30, 2017.
This National Conference comes against the backdrop of dramatic new developments in India with respect to Universal Basic Income. As you are all aware, on the 31st of January 2017, a day before the Federal Budget was announced, India’s Finance Minister, Arun Jaitley, presented the Economic Survey in the Parliament. This document is a perspective document presented every year by the Ministry of Finance, as it sees how the economy has fared the previous year, and also what the prospects are the coming year. This year, this document had a full chapter on Universal Basic Income, authored by Arvind Subramanian, the Chief Economic Advisor to the Government of India.
It is a 40-page document which painstakingly goes into a very balanced analysis of how the concept of UBI is relevant to the Indian context. It also lays out the challenges and dilemmas one faces when one applies it to a country as massive as India. The chapter hardly sounds like a government document. The author writes with a certain conviction that Universal Basic Income is a good idea, and that it should be seriously considered.
It is our common experience that when a proposal comes from the government it kicks off a much wider debate than when a citizen’s group like us raises it. And so much better when it is articulated so eloquently, unlike normal government documents. The media was abuzz with all sorts of voices.
Without going much into the contents of the innumerable articles that were written on this proposal, I would like to highlight one important aspect of this debate. Most of the commentators – economists, politicians, citizens’ groups – agree that, in principle, this is a good idea. Their disagreement them come after this point.
Here are some voices of those who oppose:
“It is in principle, a good idea, but…”
“India is not ready for it.”
“India cannot afford it.”
“UBI is a Trojan Horse to dismantle the existing welfare system.”
“This government is going to wash its hands off all its welfare responsibilities.”
“At a time, when a lot of effort is going into reforming the welfare delivery, and there is evidence of improvements across the country, introducing UBI would be ‘disruptive’.”
The arguments of the opponents are not very different from those that are being putforth elsewhere in the world. . Interestingly, these voices have not been very strong in India. Interestingly, all over the world UBI has support from both the Left and the Right. In the same breath, it also has opponents from both the camps. India is no exception.
In any case, the point is, within a short period, the idea has been gaining a great deal of traction in the country. As INBI Coordinator, increasingly I feel that there is now an urgent need for UBI literacy in the country. To tell people what it is about. What it implies for the citizen and for the government.
Given the mind-boggling numbers and fiscal implications, one thread of the UBI argument in India is: In order to make UBI meaningful, should we start with specific demographic groups rather than all citizens? And incrementally move towards “Universal”? If yes, then what should those vulnerable groups be? The tribal population (104 million and about 9% of the population)? Or all women(about 500 million about 48%of the population)? Or the elderly (about 100 million)? Or the Scheduled Caste population(about 200 million)? UBI purists might consider this a dilution of the concept of UBI and a sell out. Be that as it may, that is where the debate is now.
On International Women’s Day (2017) two associations, who otherwise make strange bedfellows, endorsed and appealed for ‘UBI for Women’. Self Employed Women’s association in Madhya Pradesh, and the oldest Industry body in India, The Associated Chamber of Commerce and Industry of India (ASSOCHAM).
Soon after the UBI proposal was presented in the Parliament, the Finance Minster of the northern-most state Jammu and Kashmir, Mr Haseeb Drabu, announced that the state is ready to implement a UBI. However, this readiness, he clarified, is contingent upon the federal government giving him a ‘go ahead’ because the federal grants form the substantial part of the state’s welfare budget.
It is a matter of time before more state chief ministers begin to see the economic, political and the moral dividends of the policy of Universal Basic Income. In India, the electoral heat and dust never settles. Between any two general elections, we have innumerable state elections or by-elections. People’s verdict is something that continually happens in India. UBI has not yet entered the electoral discourse. The first of its kind came during the recent Uttar Pradesh elections. Varun Gandhi,a two-time BJP Member of Parliament and the first cousin of Rahul Gandhi, wrote an elaborate article offering UBI as a solution to extreme poverty in the state.
Again, it is a matter of time before other politicians catch up.
Well, it is against this backdrop that our National Conference on Basic Income comes at the end of this month. We have tried to get as many voices as possible that endorse and affirm the idea. Along with the major political personalities who have come out in favour of UBI, we are also going to have economists who are engaged in serious calculations and trying to grapple with fiscal and political implications of UBI.
The challenge before INBI thus far has been to talk about the idea of UBI and foreground the evidence from the pilot study that UBI has positive and transformative effect on people’s lives. The challenge now is to work with all the groups and also with different state governments and the federal government to find ways of operationalising the idea. This is not an easy task. But then, that is the task before us now.
a, The Associated Chamber of Commerce and Industry of India (ASSOCHAM). 