Financial viability of universal basic

Context: A case for targeted cash delivery schemes as opposed to Universal Basic Income (UBI) concept.

UBI and its proponents: UBI proposes that all people in the country will get some cash without any relation to the work. Its proponents are

• Nobel Laureate, Abhijit Banerjee: 

• He calls it Ultra Basic (UUBI) because “any universal income that governments of poor countries can afford will be ultra-basic”
• The best combination would be a UUBI (accessed by everyone according to needs) and a larger transfer to the very poor and linked to health and education.
• Prof. Pranab Bardhan: calculated a cash grant of Rs 20,000 to each family irrespective of rich or poor but cautioned about its practical measures to plutocrats.
• The Economic Survey 2017: proposed an annual transfer of Rs 7,620 to 75% of Indians.
• It took UBI as a measure for mitigating insecurity and abject poverty and not inequality.

A case against UBI: ICRIER working paper (June 2020) wants a targeted approach, not universal (E.g. targeting population who does not pay income tax i.e. below Rs 5 lakh net income per year)

• Inconclusive foreign UBI experiments: 

• An authentic inquiry shows that Canada does not have a UBI, rather it has targeted provincial programmes to the help the needy.

• No detailed financial solution available:

• Abolishing major welfare schemes and diverting money to a UBI scheme would essentially serve the same purpose.
• Putting fertilizer and food subsidies under it would neglect the fact that these measures damage agriculture (as suggested by the Economic survey)
• Institutional Drag: Unless these suggestions are discussed by both expenditure and revenue secretary, no solution is workable.