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  Business   Economy  31 Jan 2017  UBI to replace social welfare schemes: Survey

UBI to replace social welfare schemes: Survey

PTI
Published : Jan 31, 2017, 2:59 pm IST
Updated : Jan 31, 2017, 6:36 pm IST

Survey estimated that a UBI that reduces poverty to 0.5 per cent would cost 4-5 per cent of GDP.

(Representational image)
 (Representational image)

New Delhi: Positioning Universal Basic Income as an alternative to various social welfare schemes in a bid to reduce poverty, the Economic Survey today said UBI is a "powerful idea" whose time has come for serious discussion.

"The UBI is a powerful idea whose time even if not ripe for implementation is ripe for serious discussion," said the Economic Survey for 2016-17, which was tabled in Parliament by Finance Minister Arun Jaitley.

Stating that the Mahatma would have anxieties about UBI as being just another add-on government programme, but on balance may have given the go-ahead, the Survey pointed out that the two pre-requisites for its success are functional JAM (Jan Dhan, Aadhar and Mobile) system and Centre-state negotiations on cost sharing for the programme.

The Survey estimated that a UBI that reduces poverty to 0.5 per cent would cost 4-5 per cent of GDP, assuming that those in the top 25 per cent income bracket are not part of it.

"On the other hand, the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 per cent of GDP," it noted. Observing that UBI, based on principles of universality, unconditionality and agency, is a conceptually appealing idea, the Survey spoke also of implementation challenges.

Citing a survey on mis-allocation of resources for the six largest central sectors and centrally sponsored sub-schemes (except PDS and fertiliser subsidy) across districts, the Economic Survey pointed out that the districts with most requirements are precisely the ones where state capacity is the weakest.

"This suggests that a more efficient way to help the poor would be to provide them resources directly through UBI," it said.

Tags: universal basic income, ubi, economic survey 2017, union budget 2017
Location: India, Delhi, New Delhi