Universal Basic Income in Developing Countries: Issues, Options, and Illustration for India

Abstract

This paper discusses two common arguments for the adoption of a UBI: that it can be a more effective way of supporting low-income households when existing safety net programs are inefficient, and that it can generate broad support for structural reforms. Using India as an illustration, the paper discusses the trade-offs that need to be recognized in adopting a UBI in these contexts. It shows that replacing the 2011 Public Distribution System (PDS) with a UBI results in welfare losses for many low-income households, although much of this can be reduced by returning the PDS operational losses and the fiscal savings from excluding the highest-income groups to households as higher UBI transfers. In contrast, replacing inefficient energy subsidiesraising energy prices to efficient-could simultaneously deliver unambiguous distributional gains, help address fiscal pressures, and improve energy efficiency with associated environmental and health gains. Realizing such reforms would, of course, require careful communication and implementation to address political and social barriers to reform.

Robotization and Welfare Trends in Future

“…At the automatic level, the decision would rely upon the announcement of the issue that UBI is planned to address-for instance, regardless of whether innovative advances will in the long run bring about gigantic net occupation misfortunes-and how well frameworks or a specific program are neutralizing that objective in a given setting [77]. Evaluating the propriety and practicality of UBI requires understanding and working; however, the exchange offs that any program or set of projects face as far as inclusion, progressivity, sufficiency, motivators, costs, financing choices, political economy, and conveyance.…”

Locally Universal: Universal Basic Income Policies in the Post-Pandemic World-Order

“…As a final example within this list, we could mention the polarized debate that took place in the 2019 Indian elections. The now opposition party, the Congress and its president Rahul Gandhi proposed the biggest UBI project in the globe to date, targeting no less than 20 per cent of the entire country's population (Coady, Prady 2018;Davala et al 2015;Ortiz et al 2018). Curiously, the situation party, the Bharatiya Janata Party (BJP) also proposed a variation of UBI focusing, by its turn, on rural communities.…”

Finance & Development, December 2018

“…In principle, simple universal basic income programs could save administrative costs and increase the transparency of transfer systems, making them less subject to administrative discretion and corruption. Advocates also tout its usefulness as a strategic instrument to support structural reforms such as removal of inefficient programs like energy subsidies (Coady and Prady 2018). Universal basic income programs can improve efficiency by avoiding sharp withdrawal of benefits as earned income increases, a common problem in many means-tested programs, which tends to discourage labor market participation.…”