KOCHI: Universal Basic Income (UBI) will be a better option than welfare schemes rolled out by Union and state governments, said Arvind Subramanian, chief economic adviser to the Government of India. He was delivering the 15th Federal Bank KP Hormis Commemorative Lecture on the topic Surprises of the Indian Economy here on Monday.
UBI is a form of social security in which all citizens or residents of a country regularly receive an unconditional allowance from the government.
“The Union Government alone has 950 such programmes and the states also have launched their own welfare schemes. While evaluating these programmes we found UBI will be more effective. There are different schemes in the country with similar objectives.
These can be replaced. But the UBI will not replace the basic responsibilities of the government such as providing healthcare facilities and education. As the country moves towards digitisation it is easier to spot beneficiaries,” he said.
The resources for Universal Basic Income (UBI) advocated by the Economic Survey can be mobilised from the buoyant tax collection under GST regime, said Subramanian. The proposal is to provide `5,000 to `6,000 per family per year which will be four to five per cent of GDP.
“India can only afford this much. In principle it will be Universal Basic Income. But the target will be the poor and the deserving, excluding the obvious undeserving ones,” he said.
While lauding Kerala for its unusual model based on international migration and remittance inflow, he said the state’s economy had been growing for the past two decades.
“The social indicators here are good. The outflow from the state and inflow are almost similar. But in the changing scenario, the remittance flow may slow down. Hence it is pertinent that Kerala should find a slightly different model of development,” he said.
Subramanian revealed that his department has recently collected satellite data of built-up area in Bengaluru and Jaipur. “We have found the property tax collection was just five per cent of what it ought to be. Kerala has lot of buildings in the state. But I am sure the property tax collection in Kochi will be only one or two per cent of what the actual collection should be,” he said.
According to Arvind Subramanian demographically there exist two India. “States like Kerala, Karnataka, Tamil Nadu and West Bengal are aging. But the hinterland India is really very young especially in states like UP, Uttarakhand, Bihar and Jharkhand. So migration happens from this ‘young’ India to the ‘older’ India,’’ he said.
Federal Bank Chairman K M Chandrasekharan, managing director and CEO Shyam Srinivasan spoke.