The PM Panel features a local government employment guarantee system Basic Income.

PM Panel features a local government employment guarantee system, Basic Income.

After years of adjusting to this idea, perhaps before 2024, it’s finally time for India’s basic income. The Prime Minister’s Monetary Advisory Board suggested that India should spend more on the social sector to build a safety net for the poor in the city so as not to shock the labor market. In the pandemic and uncertain war in Ukraine, economists seem to be warmed up by UBI’s ideas.

As the Prime Minister’s Monetary Advisory Board condemns India’s income inequality and urban unemployment, major changes in the labor market may be imminent. The PM Panel proposes safety nets such as the local government employment guarantee system, minimum wage, and basic income (UBI) modeled on MGNREGA. A report entitled “India’s Inequality”, produced by the Gurgaon-based Institute for Competitiveness, was released  Wednesday by EACH President Vibeck Debroy.

The report states: “Most importantly, governments need to allocate a larger proportion of their spending to social welfare and the social sector to make the most vulnerable people tolerate sudden shocks and stop their lineage into poverty.”

The report insists on economic reforms amid pandemics and war-related shocks. Some of these reforms, such as UBI, have split economists, but with caution, we have found that the number of hires is increasing as the experiments on the ideas prove to be successful.

The potential of  UBI was also introduced in 2016 Economic Survey 17 by Arvind Subramanian, then Chief Economic Adviser of the Government of India. The author of the study added a chapter on UBI, stating that it was “a powerful idea that was not yet proficient in action at that time, but proficient in serious debate.”

Is it finally the right time for UBI, along with other benefits for the working class?

2016- 17  Economic Survey

Subramania-led 2016 Economic Survey 17 proposed a quasi-basic income of Rs 7,260 per year for 75% of India’s population. Subramanian has set UBI’s economic cost at 4.9% of GDP.

The late Arun Jaitley, the then finance minister, supported the idea, but said it might not be politically feasible in India.”Current” requires a subsidy and beyond (UBI). ”


With the pandemic driving many people into unemployment and the Ukrainian war pinching their pockets, is it possible to shift the paradigm ahead of the next election?

Remember that before the 2019 Lok Sabha election, then-Chairman Rahul Gandhi promoted basic income and sparked a  debate about the risks and benefits of such guarantees.

 Is UBI useful for India?

India has various welfare systems for people below certain income levels, but the Public Distribution System (PDS), which provides subsidized food, fuel, and fertilizer to citizens, remains a gap. It’s full of leaks. In many cases,  subsidies (especially grains) are of poor quality and are not intended for consumers who cannot reach the beneficiaries and can afford the benefits. The system is also full of corruption. However, it is undeniable that PDS has helped save Indians from poverty and improve their calorie deficiency over time.

 The direct transfer of profits

As advertised as the first step toward UBI, the Government of India began experimenting with Direct Benefit Transfers (DBT) in 2017. This idea was also proposed by economists under the United Progressive Alliance Government. The three union areas of Chandigarh, Pondicherry, Dadra, and Haveli were part of the pilot and sent cash directly to the beneficiary’s account instead of subsidies. Success was limited because not all beneficiaries have banking privileges. However, it was thought that improved banking infrastructure could consolidate such DBTs into a single remittance to households, paving the way for UBI.  The center currently operates a minimum income system for farmers under PM Kisan. Before this, a national program was held, for example in Telangana.

Spending the money

Strictly universal UBI includes all Indians regardless of income level. However, quasi-BGE will be the selected path in India. UBI is also a non-obligatory remittance. In other words, beneficiaries are free to spend their money as they please.

UBI, on the other hand, reveals some annoying problems that have divided economists. Opponents say  UBI can reduce the incentives to work. In Finland, in 2017, Europe’s first state-sponsored basic income experiment was conducted18. Results released in 2020 during a pandemic showed that stable income improved mental well-being and life satisfaction, and, unlike controls, employed a small percentage of beneficiaries.

Some economists claim that basic income diverts resources from public schools, hospitals, and even basic rural infrastructure. But so far, while there may be debate over which subsidies should be continued and which should be phased out, none of UBI’s proposals suggest a reduction in public spending.

In a 2015 experiment conducted by the  New Delhi and Madhya Pradesh Self-employed Women’s Association (SEWA) in collaboration with UN agencies, households receiving basic income spent it on food and wealth accumulation and several livelihoods. It was shown that it worked better.

Many skeptics now seem to be warmed up by UBI’s idea as a tool for social and economic justice. Concerns are about implementation, not theory. If India introduces UBI and the program is successful, it could become a model for low- and middle-income countries.