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LATEST NEWS UPDATES | Universal basic income can't come at the cost of existing welfare schemes: report -Sayantan Bera and Elizabeth Roche

Universal basic income can't come at the cost of existing welfare schemes: report -Sayantan Bera and Elizabeth Roche

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published Published on Feb 21, 2018   modified Modified on Feb 21, 2018
-Livemint.com

Universal basic income (UBI) cannot come at the cost of existing welfare schemes and exclusive reliance on Aadhaar-linked cash transfers can prove to be short-sighted, says Carnegie India report

New Delhi:
A universal basic income (UBI) for Indian citizens cannot come at the cost of withdrawing existing welfare schemes and an exclusive reliance on Aadhaar-linked welfare payments for cash transfers can prove to be short-sighted, says new research.

The central design features proposed in the Economic Survey 2016-17 offers a weak foundation and implementing such a UBI scheme without deeper analysis or large scale experimental evaluations can produce underwhelming results, said the report, titled “India’s Universal Basic Income: Bedeviled by the Details”, by Carnegie India.

Authored by research analyst Saksham Khosla, the report observed that the proposed transfer is more of an income supplement and “the (economic) survey’s calculations incorporate neither the loss of consumption from withdrawing major existing welfare programs to finance a UBI, nor the transaction and transition costs of moving to a welfare system dominated by cash transfers”.

“Taking these factors into account is likely to result in an upward revision of the transfer amount and associated fiscal burden,” the report said.

Critiquing the Economic Survey’s proposal to present India’s largest welfare schemes as candidates for replacement, the report said that “several such programs are intended to achieve long-term development goals and cannot be simply substituted by cash transfers”.

“India’s national food distribution and public works programs, which the survey singles out for their high levels of misallocation and leakage, have improved significantly over the past decade in terms of their coverage and targeting efficiency,” it added.

Instead of an exclusive reliance on the survey’s proposed methods for financing, targeting, and distributing a UBI, the report suggested to the government to run one or several large-scale experimental evaluations as done in countries like Canada and Finland.

“By determining the impact on both the government (state and fiscal capacity) and citizens (economic and social outcomes), such trials can generate new empirical evidence to inform the growing UBI debate and reveal the most effective role for unconditional transfers in India’s welfare architecture,” the report said.

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Livemint.com, 20 February, 2018, http://www.livemint.com/Politics/FOwh9ZaH6PcRPYFNiB14mM/Universal-basic-income-cant-come-at-the-cost-of-existing-we.html


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