You will get Rs 2600 in your bank account



Washington, Oct 12: Citing an Indian case study, the IMF has said that universal basic income "looks good" when it substitutes inequitable and inefficient public spending. With several countries discussing the option of universal basic income (UBI) for their unemployed population, the International Monetary Fund carried out a simulation exercise of various subsidy schemes with UBI. A UBI is equal cash transfer to all individuals in a country

The IMF used the schemes that were in place in India at around 2011 and the schemes that it considered were aimed at ensuring access to necessities by the Indian population and also schemes of fuel subsidies

"And what we show in that example which is very telling is that given our estimate of the impact of the 2011 programme UBI would actually benefit the poor more for the same budgetary cost," said Vitor Gaspar, Director of the Fiscal Affairs Department at IMF

The IMF estimated that Indian government can provide a universal basic income (UBI) of Rs 2,600 per year to all Indians if the government  eliminates food and energy subsidies. However, the calculations need to be adjusted as they are based on 2011-12 data since when the subsidies have come down.

In countries where targeted schemes benefit relatively more, Gasper said in such cases UBI looks like a very attractive alternative

"The point that I tried to make in general when I said that UPI looks good when it substitutes for inequitable and inefficient public spending," the IMF official said

However, now it turns out that the situation in India has changed a lot

Energy subsidies have been deeply reformed during the period since 2011, he said

"India is engaging in very ambitious programmes in terms of fiscal policy and public finance. More generally, India is engaged in a fascinating process of economic development and transformation. In that context India may want to ponder a UPI or it may opt in a completely different direction," he said

That depends on the politicians and policymakers assessment of the facts of the situation, depends on social and political preferences in India, Gasper said

According to Gasper, the idea of UBI is not new and it has been widely debated by economists in the past

"It has received growing attention in recent years, partly in response to the perception of the possible effects of artificial intelligence and automation on jobs in the future," he said

Because of its universality, a UBI has the potential of having a significant impact on inequality and poverty

But since it is universal, it can be fiscally costly, he cautioned

Therefore, the discussion of a UBI cannot be disentangled from a discussion of its financing

A UBI could be an option as a replacement for inefficient and inequitable social spending

On the other hand, a UBI would not be advisable in the context of low tax capacity or if it were to compete for resources with high priority spending on investment, health and education, for example, Gasper said.

PTI/News24Bureau

Don’t Miss

RaGa tears into NaMo..Why is chowkidar saheb silent on mama bhanja loot
PM Modi's GIFT..a Palace Queen Humsafar Express..Know train details
40 'Mama-Bhanja' locations raided for Rs 114000000000-scam
Why nervous Twitter officials came to meet Amitabh Bachchan?
Furious Salman refuses to forgive this singer!
Shocking! Big B applies for JOB...here's the proof
'India's most dangerous filmmaker' says he wants to shock, disturb people with his work
This is how Priya Varrier defeated Sunny Leone with a wink
Apply for police inspector job, salary Rs 35 thousand
Congress MLA's son has surrendered allegedly for thrashing a man
Sensex slips below 34k level, down 131 points in early trade
Goa assembly session to be cut short due to Parrikar's illness
This former top cricketer-turned-politician marries for the third time
Army foils infiltration bid, kills militant
4 killed in Russia church shooting
Both CPI-M, BJP confident of Tripura election victory
South Africa to bowl against India in 1st T20I
Another banking fraud out in the open, bring out white paper on banking system, says Congress
Successful NDA alliance due to roots of democracy in BJP: PM Modi
Trump slams FBI over Florida school shooting
Job seekers protest at Bihar railway stations
Moderate polling in Tripura Assembly elections
Iran plane crash: 66 people killed
Big B's interesting job application to work with Deepika, Katrina
BIG news: Maha to launch CHEAP sanitary pad scheme
Now, this company offering more DATA on postpaid plans
PNB case: Will take appropriate supervisory action, says RBI
This mobile company registered HUGE 217% growth in India
White House continues to deny Russia collusion
Florida school shooting survivors call for tougher gun laws

Most Popular