India will endorse a scheme to provide free income to its citizens in the upcoming economic survey on January 31, says Prof Guy Standing- a proponent of the scheme.
The Universal Basic Income scheme being trialled by Finland from January 1, 2017, provides a basic income regardless of the employment status of the recipient. This single payment replaces all other social security payments.
In Finland, the advocates of the scheme believe it will incentivise unemployed people to take up jobs which they would otherwise be disinclined to do due to fear of losing their welfare payment. It is also expected to reduce the burden on the ballooning welfare budget.
Prof Standing told Business Insider that the Indian government will say the idea is feasible and is the way forward.
The system is designed to provide a vital safety net for all citizens, replacing the so-called inefficient welfare systems currently in place.
Chief Economic Advisor to the government of India, Arvind Subramanian last year said the 2017 Economic survey would contain the pros and cons of the UBI.
However, Prof Standing said India may not be able to roll it out for all of its population due to its size.
"I don't expect them to go the full way, because it's such a dramatic conversion,” he said.
India currently provides a range of subsidies on various products and services to reduce the burden on the weaker sections of the society. However, many of these subsidies are thought to be inefficient and often not well targeted.
Live Mint reports that the economic survey will contain a chapter on UBI but the scheme is unlikely to be implemented.
“This may not be the opportune time to provide generalised income support. The Government needs to focus on the deprived section or people below poverty line and provide targeted income support,” said DK Srivastava, chief policy adviser.
However, critics of the scheme say a free income will remove the incentive for finding work and could prove very costly.
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