Can Universal Basic Income make India a Developed Nation ?

As Farmer welfare till now is the important promise in every Electoral Manifesto and could be seen or heard during every election campaign, every candidate introduces his own versions of Farmer welfare scheme for example - MSP, Farm loan Waiver etc.

As all these mentions above are Price support schemes and no one focuses on Farmers income resulting ineffectiveness of all the schemes mentioned above and no change in Farmer's condition.

A most devastating disadvantage of Price support scheme is that it basically focuses on some crops only neglecting others and it breaks the credit culture.
Can Universal Basic Income make India a Developed Nation ?
Universal Basic Income and India

Recent Initiatives

Recently TRS(Telangana Rashtriya Samity ) came with its Income Support Scheme called Rythu Bandhu Scheme where a farmer would get a specific amount of money (₹4500) before sowing as to fulfill all its need.

As such type of Income support is needed not only for Farmers but also to all  Indian Citizen because as there are many areas which are more productive then Farming and it does not discriminate accuracy of targetting.

Universal Basic Income and India

In Western Countries, this concept tosses because of Increasing Automation but in India, this got currency because of chronic poverty and Government failure.

If we think of providing a Universal Basic Income to all not more then what is our poverty line i.e. ₹1180 per month it would cost India approximately 19 trillion (11.4% of  GDP or 50% more then center's total tax revenue).

But who is asking for ₹1180 per month a research survey by UNICEF and SEWA(Self Employed Women's Association) conducted in rural Madhya Pradesh produce that only ₹300 per month for each adult and ₹150 per month to each child can make a big difference in their living standards.

The Sikkim Government decided to make Sikkim India's first state to follow Universal Basic Income and decided to implement it before 2022.

Definition of Universal Basic Income

Universal Basic Income is an un-conditional income that is sufficient to meet a person's basic needs at or above the poverty line.
Universal Basic Income is periodic cash payment delivered to all on an Individual basis, without means test or work requirements.

Features of Universal Basic Income

  • Unconditional- Universal Basic Income is Un-conditional (except age)  i.e. anyone can avail it only with the virtue of Citizenship.
  • Automatic- It would be paid automatically to the recipient bank account after a stipulated time period.
  • Not Variable - as whatever the income be this basic income would not very
  • Individual - It would be paid on an Individual basis.
  • Right - All legal citizen of the country has the right to avail this.

History of Universal Basic Income

Its History Goes back to early 16th century in Sir Thomas More book Utopia where he argued about that every person should receive a guaranteed regular income.

The benefit of Universal Basic Income

  • Automation - Helps to fulfill the aspirations of automation because after this there would be no hindrance of job security and India could efficiently implement automation technology.
  • Transparency - This would maintain transparency because as all the money goes directly to the bank account so no middlemen which reduce corruption and the major problem in India as India ranks 79 in Corruption Perceptions Index.
  • Administrative In-efficiency- Universal Basic Income would help to reduce Administrative Inefficiency because very less administration is required.
  • Poverty Reduction - Universal Basic Income would help in reducing poverty because everyone would have a guaranteed income and 5% people living in India in extreme poverty according to World Poverty Clock would be better off.
  • Freedom - Universal Basic Income would provide Freedom to do whatever one might to, and reduce India's ranking from 130 in the Human Development Index.
  • Gender Equality - As there would be no discrimination on the basis of gender so reduce discrimination.
  • Economic Growth - As Universal Basic Income would increase the purchasing power of individuals resulting in more spending hence Economic Growth.
  • Insurance - Universal Basic Income acts as insurance in bad days 
  • Equitable distribution of Wealth - this would help equitable distribution of wealth because for this government would increase tax and provide that extra tax money to the needy  with the help of Universal Basic Income and helps India to increase its ranking from 12 most unequal country in the world because hare 1% population have 58% of wealth.
  • Increase Bargaining power- This would increase the Bargaining power of workers because of which they can weight for a better wage job.

The disadvantage of Universal Basic Income

  • Employment - As this would act as a guarantee for money because of which beneficiary becomes lazy and are not interested in doing work.
  • Fiscal Burden - Universal Basic Income would act as a major burden on government exchequer.
  • Inflation - If Universal Basic Income scheme is funded with the help of Increasing tax it would result in inflation 
  • Wrong Behaviour - Beneficiary could use this extra money for liquor of other bad habits.
  • Worker availability- this would reduce worker availability because no worker would be ready to work for less income marking a reduction in their availability.
  • Privatization - This would increase privatization because Nobel laureate Amartya Sen said that in a market driven economy the more money people get they will start investing it on private education and private healthcare 


As no program could directly target Universally so we should start from narrow they expand it wider, as this one scheme only could not make India developed but it could act as a step towards developed Economy.

Post a Comment