Universal Basic Income: Now India?
We have previously commented on proposals by economists and political scientists that would substitute universal income policies as credible alternatives to existing social programs such as unemployment insurance. (see blogs dated 2015-12-17, 2016-11-22 and 2018-05-02,)
The idea is straightforward: Provide citizens with a minimum allowance, without means-testing, that would give everyone the wherewithal to live with a basic level of dignity. This is an idea that has been around for decades and several, generally small, countries have experimented with it. Now we have India, one of the two most populous countries in the world, with approximately 1.4 billion people, accounting for some 18% of the world’s population, proposing some of the major elements of a universal income strategy.
India’s budget, for the year starting April, contemplates doubling the income at which people have to pay taxes while promising payments to small farmers. It should be noted that India is expected to hold elections, starting in May, which could trigger a bidding war for support at the ballot box.
The leader of India’s main opposition party, Rahul Ghandi, recently tweeted about a new income support program that would be part of his party’s platform. He tweeted “we cannot build a new India while millions of our brothers and sisters suffer the scourge of poverty. If voted to power in 2019, the Congress is committed to a minimum income guarantee for every poor person, to help eradicate poverty & hunger.”
It now appears clear that some form of universal basic income will be the signature issue for India’s 2019 general election campaign.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA