UBI scheme to have cut-off income limit
New Delhi, Feb 11: The Universal Basic Income (UBI) scheme, mooted in the government’s Economic Survey this year, should have a cut off income limit and those above it should be encouraged to give up the scheme up voluntarily, former Chief Economic Advisor Kaushik Basu has said.
“The Universal Basic Income scheme should give a cut off income; ask ones above it to voluntarily forego it. That’ll also be a civics lesson,” Basu, currently Professor of Economics at Cornell University in the US, said in a tweet.
The Economic Survey 2016-17, presented last month, advocated a UBI scheme as an alternative poverty reduction mechanism in place of various ongoing social welfare programmes.
The Survey, authored by Chief Economic Advisor Arvind Subramanian, pitched for a scheme to transfer a reasonable basic income to Indians below the poverty line.
“A UBI that reduces poverty to 0.5 per cent would cost between 4-5 per cent of GDP, assuming that those in the top 25 per cent income bracket do not participate,” the Survey said.
Elaborating on the scheme, which has no precedents globally, Subramanian has earlier said that it would entail making an unconditional cash transfer of about Rs 10,000-Rs 15,000 a year to every citizen, and could replace more than 1,000 schemes the government runs for poverty elimination.
Meanwhile, Niti Aayog Vice Chairman Arvind Panagariya has stated in a recent interview that India lacks the fiscal resources for a UBI benchmarked to the poverty line.
The Tendulkar Committee on the urban poverty line has placed this at Rs 1,000 per person per month at 2011-12 prices.