In January 2019, the Congress party put the idea of the universal basic income on the political agenda after they promised to implement the ‘NYAY’ scheme if the party came to power in the general election. The move was called brave and unprecedented by political pundits; however, this wasn’t the first time the UBI was being talked about in the Indian scenario. Earlier, Arvind Subramanian, the Chief Economic Advisor to the Ministry of Finance had recommended the UBI in his Economic Survey for 2016-2017.
In October 2017, the International Monetary Fund (IMF) had made a case for India having a fiscally neutral UBI by eliminating subsidies of food and fuel that cost up to ₹5.6 trillion. Even earlier in 2011-2012, the IMF had proposed transferring ₹2,600 to every person in India. The organization although, was critical of the political, social, and administrative challenges in order to do so. This was especially the case because doing away with such subsidies would significantly increase the prices.
The supporters of the UBI claim that this no-strings-attached payments will prove to be an effective antidote to India’s underperforming antipoverty programmes and subsidies that are distortionary. The critics worry that they will undermine the social security architecture that is already fragile, cause workers to drop out of the labour force, and also encourage wasteful spending.
It can be agreed by everyone that the UBI is a radical solution, which could provide a right to basic income to everyone. It usually consists of three steps. The first is that the UBI for all. Second is unconditionally, which means it is a basic income without any conditions or expectation from the beneficiaries. Third is agency, meaning it can make a citizen move away from being a subject of government welfare programme to agents of its own change and they might choose how to spend their money.
Critics of UBI in India have also argued that even if all subsidies are done away with, the amount allocated per family would be close to ₹6000 which is simply not sufficient. Further, due to the vast amount of Indian economy being informal, it will be difficult to identify which part of the population deserve the UBI if we have a selective UBI scheme like that of Congress’.
Even the Congress party during the elections failed to answer where the money for the NYAY scheme would come from which resulted in the BJP often criticising them for not having a plan in mind. Although the UBI whenever tested in India has - contrary to popular beliefs – not been misused by the poor, the execution and implementation is what keeps the masses sceptical.
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