Ahead of the General Elections 2019, Congress is batting for the implementation of the minimum guarantee scheme, theoretically known as the Universal Basic Income (UBI) scheme.
The UBI — the unconditional cash transfer system — requires the economy to be financially strong to fund the programme, making it the key reason for developed countries to have an upper hand in implementing the scheme.
The UBI is one of the most debated topics, not only in India but across the globe. Some developed countries, including the Scandinavian countries, are running pilots and may eventually make it a social welfare norm.
For developed countries, the scheme is simply to fix the hurdles which are blocking the economy to achieve optimal growth. But when it comes to implementing UBI in a developing country, like India, it's a different ballgame altogether.
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According to Jayati Ghosh, an Economics Professor at Jawaharlal Nehru University, there are three key problems in implementing UBI in developing countries.
Firstly, "the policies in developing countries are weak," according to Ghosh. She explained how developing countries have to strengthen their fiscal policies and make it more people-friendly so that when the scheme is implemented, people are able to bear the fruits.
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Secondly, in most developing countries, the "reach of the government is not much." Here, she explains that, because of the vast population and the existing social class divide, it will be difficult for the government to cater to the needs of the people efficiently.
Lastly, the lack of funds. The Economic Survey, an annual report on the state of India’s economy, shows that there are only 7 taxpayers for every 100 voters in the country.
The lack of funds is one of the major hindrances coming in the way of a developing country like India to implement UBI. This is one of the main reasons why the government has said that if the UBI is implemented in India, the existing social welfare schemes will be done away with.
First Published: IST