Wednesday, February 12, 2014

Universal Basic Income - your living is your birthright, no one should force you to earn it

Thanks to Shiv Hastawala for sharing this in some emails...

This short video shows the Unconditional Basic Income experiments done in India (Delhi and Madhya Pradesh) and interviews the recipients of the cash transfers.

The interviewees reveal positive effects on health, labor supply (quality), financial stability, improved environment, resource access, equity, investments, debt reductions and most of all, EDUCATION!!

This is a game changer. It clearly debunks most of the arguments against taking care of the basic needs of the human population. Even though these experiments were done on a small scale with significantly small amounts of cash transfers, they are a good start for the Indian community (and even the world).


I just came across this idea of Unconditional Basic Income. This is an amount of money that is paid to every individual (of the nation pertaining to this so-called law) every month as a means to meeting basic human needs regardless of their participation in the labor market. The European arm of this organisation has already gained around 280000 signatures for this petition and the bill will most likely be presented to the European Union soon. Why it caught my attention was because this could be a real step in the transition towards a NLRBE since meeting the needs of all people is one of the major aims of this model.

However, what I found most intriguing was that experiments on this subject are already being carried out in India but most of us are not aware of it. I am quoting the text from in italics below. Hope you find it interesting:
Although barely reported in the media, two basic income pilot projects are have been underway in India since January 2011. One pilot is being conducted in part of Delhi and the other in eight small rural villages in Madhya Pradesh. The Self Employed Women’s Association (SEWA) began planning and raising money for the rural project in 2008. The Delhi government eventually joined in, working with SEWA to organize an urban pilot project in Delhi.

Publicity about the project has been deliberately kept low because opponents have been using scare tactics to disrupt and to discourage participation in the project. They have spread rumors that the pilot would lead to the reduction or elimination of existing government support for the poor.

Families participating in the urban project receive 1000 Rupees per month (about US$22). Some participants have reduced access to other government transfers; some participants receive the grant all with full access to other government transfers. In the rural project, adult receive 200 Rupees a month (about US$4.40) and each child under the age of 14 receives 100 Rupees a month (about US$2.20). The project organizers will study the consumption, expenditure, and nutrition of the different groups of participations to a “control” group receiving no additional transfers to determine the impact of cash transfers.

These projects are similar to the Namibian basic income pilot project and to the U.S. and Canadian governments’ Negative Income Tax experiments conducted in the 1960s and 1970s, but the rural project adds an important new innovation to the method: the project is being conducted on the village, rather than on the individual, level. All residents of eight Indian villages will receive the basic income, and their behavior will be compared with residents of twelve “control” villages. This method will allow project designers to study village-wide effects of the transfer.

Guy Standing, professor of economic security at Bath University (UK) and an honorary co-president of the Basic Income Earth Network, helped to conceive and organize the project. He argues that it needs to be conducted with scientific dispassion. But he’s hopeful of the outcome. Asked about the results of the Namibian pilot project—which he was also a part of—Standing said that organizers documented many positive effects: “Child school attendance went up dramatically, use of medical clinics went up. Those with HIV/ AIDS started to take ARTs (Antiretroviral Therapy drugs) because they’d been able to buy the right sort of food with the cash. Women’s economic status improved, and the economic crime rate went down. Income distribution improved.”

For more about the projects see an interview with Guy Standing in The Times of India:

Universal basic income (UBI)—the unconditional provision of an amount of money to every citizen—is an idea that has gained ground in several Western countries. Switzerland is planning a referendum on the subject; and a vigorous debate is on in the US and European countries on the feasibility of UBI. There have been instances in individual cities in the US and Canada where UBI has been tried out, with a degree of success, in the past.

There are good reasons to pursue the idea in India, the primary one being equity. There is a strong case to provide UBI to all Indians, a significant number of whom do not have a regular source of income. The second reason, which is equally important, is the damage that a bloated government is inflicting on the Indian economy. A vast number of “welfare schemes”, “flagship programmes” and the like eat into a huge amount of government revenue. In fact, the reason why India is in such dire fiscal straits is the explosion of such programmes and the money that has to be borrowed to keep them running. The macroeconomic consequences have been devastating. If a lump-sum is handed out to every Indian family, this flab can be cut easily.

It is not a utopian idea. One way to fund UBI is to dramatically reduce expenditure on subsidized goods and services such as food, healthcare and education. The freed up money can then be used to provide UBI. The numbers are simple. If, to pick an arbitrary number, every Indian family is handed out Rs5,000 every year, then for a population of 1.2 billion, the expenditure works out to Rs1,20,000 crore every year. This is not a big, unrealistic, sum. By comparison, the budgeted amount for total subsidies alone in 2013-14 is Rs2,31,000 crore—almost double of what is required to provide UBI of Rs5,000 to every Indian family. The entire non-Plan expenditure stands at Rs1,10,9975 crore, more than nine times what is needed for UBI. Now shaving off non-Plan expenditure in toto is not feasible, but surely if providing UBI is a political priority, the sum required can be easily found.

Financial affordability is one thing, political feasibility is another. But even on that count UBI can be a winner. Take a careful look at all the major welfare schemes being run currently—including the gargantuan Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). In the end, they serve as ways of transferring some money to the poor. This is seen to be a vote-spinner for any party in power. UBI can be a far more attractive idea politically. Giving regular income to the poor, far in excess of what they can earn through the MGNREGS or any other scheme, is more promising.

These issues apart, UBI promises to be a humane idea: It can end the uncertainty that so deeply afflicts the poor in this country. MGNREGS promised to be a good idea. But as it stands currently, it is a corruption- and inefficiency-ridden scheme. The poor may want work but may not get it. And even if they work, chances are they will not get the money due to them.
There are, of course, design issues that need to be confronted head on. What is the amount that must be provided as UBI? What should be the principles on which this sum is decided? Will establishing UBI make India a country of layabouts who refuse to work because they have a guaranteed income? These are contentious issues that need to be debated. But the logic of introducing UBI remains strong.

The reasons for providing UBI in Western countries are different: stagnant wages, an effective demand collapse and associated sociological problems. In India, these issues are different but the background remains the same: helping the poor and ensuring that government intervention in the economy—devastating in recent years—is minimized.

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