[Editorial Analysis] Basic income works and works well

Mains Paper 2: Governance

Prelims level: Basic income

Mains level: Welfare schemes for vulnerable sections of the population by the Centre and States

Context

• The outcomes exceeded expectations, partly because everybody in the community, and not just select people, received their own individual transfer.

• Nutrition improved, sanitation improved, health and health care improved, school attendance and performance improved, women’s status and well-being improved,

• The position of the disabled and vulnerable groups improved by more than others. And the amount and quality of work improved.

Background

• Critics said it would be a waste of money, but they were proved wrong. Above all, the basic incomes improved the community spirit and were emancipatory.

• Those who do not trust people wish to retain paternalistic policies despite decades of evidence that they are woefully inefficient, ineffective, inequitable and open to ridiculously extensive corruption.

• The tendency of elites to want to have common people grateful to their discretionary benevolence has blocked sensible economic reform.

• As commentators know, in the 2017 Economic Report tabled by the government there is a chapter on how a basic income could be rolled out across India, and is affordable.

• This should not be an issue to divide the left and right in politics, and it would be wonderful if the main political parties and personalities could come together on it. That is too much to hope.

• But in this wonderful country, now is a moment of transformative potential.

A ripe idea

• The international debate on basic income has advanced considerably in the past five years.

• Experiments have been launched in countries of different levels of per capita income, which include Canada, Finland, Kenya, Namibia, the Netherlands, Spain and the U.S., with plans being drawn up in England, Scotland, South Korea and elsewhere. India could take the lead.

• It has the technological capacity, the financial resources and, above all, the need for a simple, transparent scheme to liberate the energies of the masses now mired in economic insecurity, deprivation and degradation.

• What administrators often do not appreciate enough is that money is fungible.

• If money is given only to women, men will demand a share; some women will give in, some will resist; it will be divisive.

• We found in the pilots that if men and women all have an equal individual amount, it promotes better and more equal gender relations.

• Moreover, giving to all in the community fosters solidarity within households and the wider community, apart from enabling multiplier effects in the local economy.

Farm loan waivers

• The contrast is bound to be made with the Congress’s promise of farm loan waivers.

• It will be popular, but will not alter structures and is bad economics. Suppose the principle were generalised.

• In the long term, financial institutions would be less likely to extend loans to small-scale farmers.

• If the loans were made on fair rules, it would be better to enable the debtors to pay them back less onerously.

• That is why a basic income would be a more equitable and economically rational way of addressing what is undoubtedly an unfolding rural tragedy.

Conclusion

• The beauty of moving towards a modest basic income would be that all groups would gain.

• That would not preclude special additional support for those with special needs, nor be any threat to a progressive welfare state in the longterm.

• It would merely be an anchor of a 21st century income distribution system.

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Prelims Questions:

Q.1) Consider the following statements in the context of sovereign blue bond:

A. Recently, Republic of Seychelles launched the world’s first sovereign blue bond.

B. The Bond and the programs of marine activities have been developed by the support of World Bank and Global Environment Facility.
Choose the correct option:

A. A only

B. B only

C. Both A and B

D. Neither A nor B

Correct Answer: C

Mains Questions:

Q.1) Will the politicians show the will to implement the UBS scheme? Give your arguments in regard of this question.

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