Universal basic income: A vile idea

Some ideas, wrote George Orwell, are so stupid that only intellectuals believe them. Another group can be added to that—that of politicians. The so-called universal basic income (UBI) is one such idea.

UBI pertains to the transfer of ₹10,000-₹15,000 a year to every citizen. This is in sync with Robin Hood politics that Prime Minister Narendra Modi has embraced in the recent past. Having failed to deliver on his promises of achhe din and ‘maximum governance, minimum government,’ he has started moving towards socialism—the last resort of every incompetent leader. So, he is borrowing not only Indira Gandhi’s politics and policies but also her phraseology. Rewording the Indira’s famous quote on poverty, he said on January 3 something to the effect, “I say remove corruption, the Opposition says remove Modi.”

The dharma of economic advisors is to offer sane counsel to their political masters, not to exacerbate their base instincts. Therefore, Chief Economic Advisor Arvind Subramanian should have been advising the Prime Minister to take the reforms route instead of indulging in mindless populism, but he is doing the opposite. Subramanian has been promoting it since July last year; worse, he is likely to incorporate in the Economic Survey that is tabled in Parliament prior to the Union Budget.

The UBI idea is preposterous both from moral and practical perspectives. The impossibility of UBI has been underlined by Niti Aayog Vice-Chairman Arvind Panagariya. In an interview to The Indian Express (January 25), he said, “At the current level of income and our needs for investment in health, education, infrastructure and defence, we simply do not have the necessary fiscal resources to transfer a reasonable basic income to 130 crore Indians.”

Panagariya has ruled out the universality of the proposed scheme, for handing over even ₹1,000 per month, which is below the poverty level, to all Indians would cost ₹15.6 lakh crore to the exchequer, an amount in the region of the country’s annual tax revenue. “We simply do not have this magnitude of fiscal resources,” Panagariya said.

Another practical problem was flagged by Niti Aayog CEO Amitabh Kant last week at the World Economic Forum in Davos. “In the Indian context, a universal basic income has to be examined in the context of the fact that you already have a rural employment guarantee scheme, which is being implemented but has huge leakages. There is public distribution system being implemented, but again is riddled with corruption,” Kant had told CNBC TV18 in Davos.

It is depressing to note that nobody in the government is bothered about the moral and philosophical aspects of UBI or any of its variants; all of them underline practical difficulties. UBI is premised on the belief that the people of India are incapable of earning their livelihood and, concomitantly, look askance at the great redeemer—the Indian state—to keep their body and soul together. The belief is deeply flawed on two counts: first, people (in our country and elsewhere) themselves earn their livelihood, often in spite of the depredations of the officers of the state; and, second, the state is thoroughly incompetent and corrupt, incapable of carrying out its such basic duties as administration, law and order, and national defence, what to speak of the welfarist functions that it has mandated for itself.

At the heart of the problem is Modi’s ideological confusion. Though widely seen as a Rightwing leader, the political philosophy he and his parent body, the RSS, believe in is socialism (see There is no Rightwing in India, http://www.thehinduchronicle.com/2016/12/no-rightwing-india/). They can’t think beyond dirigisme. This is the reason that his government keeps toying with the policies the Congress formulated, in the hope that he would be able to implement them more efficiently. Worse, he also entertains the ideas the Left would have been proud of, like that of UBI. Even the stupidest ideas.

  • Charles Markman

    I agree. There is no way UBI makes any sense from a moral or economic standpoint. You provided good support. Thank you for writing the article.

    Co-Founder of Galaxy Media Co.