A compelling call for a Universal Basic Income

No nation is free from the clutches of poverty, it is a global malady and no matter our efforts to prevent its vicious cycle, we always seem to fall short, either of political will or of consciousness. Poverty is simply the highest form of economic inequality. Income inequality in the world has been on the rise from the early 19th century, and since the 1980s, it has only risen faster and at an increasing rate. India alone faces a large part of this challenge, with an overflowing population of 1.3 billion, and the number of poor has steadily risen since Independence despite public efforts to eradicate poverty. The World Bank put this in more alarming numbers when it said, “One in five Indians are below the poverty line”. However, the common man is unbothered because only a fifth of that statistic is visible to him in the form of slums or beggars. The rest are tucked away and forgotten in rural areas.

At the time of Independence, we took note that the backwardness of any section of society is not due to their inherent failure but rather due to systematic oppression and denial of access to opportunities. In our failed mission to establish equality, we have instead adopted capitalism and chosen to blindly ignore our responsibility to achieve collective prosperity. In the opening debate of the Constituent Assembly, Jawaharlal Nehru said, “The first task of this Assembly is to free India through a new constitution, to feed the starving people, and to clothe the naked masses, and to give every Indian the fullest opportunity to develop himself according to his capacity.” The idea was inserted into the Preamble and is a salient feature of the Indian Constitution: to establish a welfare state. And as a welfare state, India has launched several welfare schemes and programmes to remove her citizens from the grasp of poverty, but none have truly been successful.

This is largely because our public programmes are in need of an overhaul, guided by thoughtful reform. The need for an alternative solution to remove poverty is long overdue, and we must move away from the tried and tested ways of the past.

With Covid-19 in the backdrop, an individual’s right to a Universal Basic Income (UBI) makes an interesting case for itself. The outbreak has compelled us to take notice of the severe poverty in India and ignore it no longer. With a sharp decrease in levels of employment and labour participation, nearly 78% of Indians are unsalaried individuals today. The economic consequences of the virus will remain for several months ahead as businesses struggle to pay their employees, but the poor and employees of the unorganised sector will be the worst affected. History teaches us that during any economic recession, the vulnerable sections of society are the ones often cheated out of social welfare programmes and left worse off in poverty.

An accepted definition of UBI is ‘a periodic cash payment unconditionally delivered to all on an individual basis, without a means-test or work requirement’. It attempts to restore equality partially by giving all citizens the same amount of money regardless of their rank in the social hierarchy. This will ensure that irrespective of each one’s earning potential, every citizen is guaranteed a minimum standard of living, sustenance and access to healthcare.

India’s present social welfare schemes are based on means-testing, i.e., people must prove their need for financial aid. They are asked to jump through hoops to receive simple government assistance by fitting themselves into categories such as ration cardholders, below poverty line, physically/mentally disabled, backward class, unmarried, etc.

Such tedious paperwork and bureaucratic procedures merely make the poor feel more dislodged in an already complex system. The UBI, on the other hand, can be claimed as a natural right, and will be free of bureaucracy. Moreover, as the UBI will be paid to each individual and not a household, it promotes freedom of choice and dignity. Unlike welfare schemes that hand out food coupons and service vouchers, a periodic cash payment will allow individuals to decide what they wish to spend it on and endorse agency.

Opponents of the UBI may perhaps argue that monetary allocation to the rich is a wasted resource as the government has other missions besides poverty. They fear that giving a basic income to the rich dilutes and undermines the agenda of poverty reduction. One might fail to see sense in giving a UBI to Mukesh Ambani, however the larger principle is at play while giving the same amount of money to all. They may also fear that the UBI comes with a silent trade-off, such as a rise in taxes on the rich and the middle class.

While there are several valid questions to be answered on who will bear the fiscal burden, the UBI must be seen as the government’s long-term investment in eradicating poverty. Finland introduced its version of the UBI in 2017 as a social-welfare experiment for the unemployed section of society. It provided the beneficiaries with roughly $600 every month as financial aid. Persons interviewed from this programme have repeatedly said that the money helps them achieve their dreams and provide care for their dependents. The Guardian reported that in several cases, this money has “removed the fear of utter destitution, freeing them to do work they find meaningful.”

Social welfare measures as we know them today in India are simply not effective enough to hit the nail on the head and alleviate poverty. Simply handing over money to the poor is the next best alternative. Ensuring financial security to all Indians will result in a more robust and thriving workforce and local economy in the long run. To quote Oscar Wilde, “There is one thing stronger than all the armies in the world, and that is an idea whose time has come.”

(The writer is a lawyer at Samvad Partners)