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Is it time for Universal Basic Income in India?

This emergent question needs a quick response as India sees rising number of COVID-19 positive cases

Sabrangindia 20 Mar 2020

universal basic income

A petition has been submitted to the UK Parliament for consideration for implementing Universal Basic Income to give home and food security through Covid-19. Ever since the World Health Organisation declared the Covid-19 to be a pandemic, the debate on provision of medical and food security specially for the underprivileged has begun.

The petition states, “The government should implement an immediate Universal Basic Income trial for all UK residents to ensure home and food security through the coronavirus Covid-19 crisis, to support the needs of those that need to self-isolate as well as the public health at large, and the wider economy.”

Since the people have been asked to isolate themselves, several small businesses have taken a hit and for people who live a hand to mouth existence, this pandemic has hit them right in the stomach. Hence, in such times, emergency measures like providing food and social security becomes one of the primary prerogatives of the government, apart from ensuring good public health care. The petition further says that “Universal Basic Income for all residents would give home and food security, allowing people to make the right decisions for their families and wider society, whilst also keeping money flowing through the economy.” This online petition has so far received about 56,000 signatures and the UK Parliament has a system where petitions with more than 1 lakh signatures find place for a debate in the Parliament.

While this is the story of UK, where 104 people (until now) have died of COVID-19, there are other countries who are also considering such a social security move or have citizens demanding it. The question remains as to when is the right time to start the implementation of such a measure? Does the situation have to get worse? With over 200 positive cases and 5 deaths in India, is it the right time to implement a social security scheme like this?

In an unprecedented situation like this, any country could lead by example and the situation need not be dire for the same as that would lead to desperate measures and faulty implementation. Before the storm takes over, life jackets need to be handed out in preparation for the worst. That’s what this social security measure is.

Reportedly, the Central government in India has already started considering the option of cash transfer scheme to mitigate the impact of the economic fallout caused by the pandemic, as per some government officials.

The government will have to overlook the fiscal slippage such a scheme could cause, since the Covid-19 impact is likely to be unprecedented and vast. “India needs a well coordinated fiscal and monetary response to counter the coronavirus-induced disruption to our economy. This is not a time to worry about fiscal slippage," said Shamika Ravi, director, research, Brookings India.

In fact, the Uttar Pradesh government has already set up a committee to suggest ways to implement the scheme to compensate daily wage earners and the poor in the state. The fiscal impact, however, can only be estimated once the expanse of the scheme is decided. This means deciding to whom the scheme should be extended.

Some developed countries have announced deep cuts in interest rates to ease borrowing and have also implemented extension of tax payment deadlines. While these measures will not benefit the poor and the daily wage earners, they will only help businesses to sustain. Cash transfers is the social security measure one needs in such times of crisis.

Japan has gone a step ahead in its plans by announcing a payout of about USD 80 per person per day to businesses as income compensation for parents taking leave from work in response to temporary school closures It’ll also offer stipend in cases where employees care for people suspected of having been infected with the virus. This is something India should look at since many companies in India have started giving pay without leave to its employees which puts a lot of pressure on family income and who is to say if the situation only worsens and people are forced to stay at home for an extended period of time, there could be utter chaos on the financial front with people struggling to make ends meet. At this point there is an urgent need to estimate the number of people who are going to be affected or who are already affected across the many sectors including the unorganised sectors before people’s savings dry out.

 

Related:

"Does the Coronavirus ignore wedding parties, and attack only peaceful protests?"

Congress MP Manish Tewari on Jammu and Kashmir's economic collapse since the abrogation of Article 370

MHA on CAA petition: Whole expanse of Article 21 cannot be made available to illegal migrants

 

Is it time for Universal Basic Income in India?

This emergent question needs a quick response as India sees rising number of COVID-19 positive cases

universal basic income

A petition has been submitted to the UK Parliament for consideration for implementing Universal Basic Income to give home and food security through Covid-19. Ever since the World Health Organisation declared the Covid-19 to be a pandemic, the debate on provision of medical and food security specially for the underprivileged has begun.

The petition states, “The government should implement an immediate Universal Basic Income trial for all UK residents to ensure home and food security through the coronavirus Covid-19 crisis, to support the needs of those that need to self-isolate as well as the public health at large, and the wider economy.”

Since the people have been asked to isolate themselves, several small businesses have taken a hit and for people who live a hand to mouth existence, this pandemic has hit them right in the stomach. Hence, in such times, emergency measures like providing food and social security becomes one of the primary prerogatives of the government, apart from ensuring good public health care. The petition further says that “Universal Basic Income for all residents would give home and food security, allowing people to make the right decisions for their families and wider society, whilst also keeping money flowing through the economy.” This online petition has so far received about 56,000 signatures and the UK Parliament has a system where petitions with more than 1 lakh signatures find place for a debate in the Parliament.

While this is the story of UK, where 104 people (until now) have died of COVID-19, there are other countries who are also considering such a social security move or have citizens demanding it. The question remains as to when is the right time to start the implementation of such a measure? Does the situation have to get worse? With over 200 positive cases and 5 deaths in India, is it the right time to implement a social security scheme like this?

In an unprecedented situation like this, any country could lead by example and the situation need not be dire for the same as that would lead to desperate measures and faulty implementation. Before the storm takes over, life jackets need to be handed out in preparation for the worst. That’s what this social security measure is.

Reportedly, the Central government in India has already started considering the option of cash transfer scheme to mitigate the impact of the economic fallout caused by the pandemic, as per some government officials.

The government will have to overlook the fiscal slippage such a scheme could cause, since the Covid-19 impact is likely to be unprecedented and vast. “India needs a well coordinated fiscal and monetary response to counter the coronavirus-induced disruption to our economy. This is not a time to worry about fiscal slippage," said Shamika Ravi, director, research, Brookings India.

In fact, the Uttar Pradesh government has already set up a committee to suggest ways to implement the scheme to compensate daily wage earners and the poor in the state. The fiscal impact, however, can only be estimated once the expanse of the scheme is decided. This means deciding to whom the scheme should be extended.

Some developed countries have announced deep cuts in interest rates to ease borrowing and have also implemented extension of tax payment deadlines. While these measures will not benefit the poor and the daily wage earners, they will only help businesses to sustain. Cash transfers is the social security measure one needs in such times of crisis.

Japan has gone a step ahead in its plans by announcing a payout of about USD 80 per person per day to businesses as income compensation for parents taking leave from work in response to temporary school closures It’ll also offer stipend in cases where employees care for people suspected of having been infected with the virus. This is something India should look at since many companies in India have started giving pay without leave to its employees which puts a lot of pressure on family income and who is to say if the situation only worsens and people are forced to stay at home for an extended period of time, there could be utter chaos on the financial front with people struggling to make ends meet. At this point there is an urgent need to estimate the number of people who are going to be affected or who are already affected across the many sectors including the unorganised sectors before people’s savings dry out.

 

Related:

"Does the Coronavirus ignore wedding parties, and attack only peaceful protests?"

Congress MP Manish Tewari on Jammu and Kashmir's economic collapse since the abrogation of Article 370

MHA on CAA petition: Whole expanse of Article 21 cannot be made available to illegal migrants

 

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