Why India should take the lead on universal basic income


Why India should take the lead on universal basic income

Last year, India suddenly became a hotspot for the most radical economic idea of the 21st century. In its annual Economic Survey — a document in which it reflects on the state of the economy and sounds out future policy — India’s Finance Ministry devoted an entire chapter to the feasibility of introducing universal basic income. 
Around the world, the conceptual appeal of basic income — a modest income regularly and unconditionally given by the state to each citizen — is growing, as is empirical examination. Switzerland had a prolonged debate and a national referendum on it in 2016 (it was rejected). Four months ago in Kenya, the charity GiveDirectly inaugurated the largest basic income pilot project ever attempted. It will study an experimental group of about 6,000 villagers who will receive a monthly basic income for 12 years. 
How could India join the vanguard of the basic income revolution? And should it? The Indian Economic Survey sounds a note of noncommittal optimism on the subject. Universal basic income, it says, would be too costly to implement immediately, but it is worthy of “serious public deliberation.” It could be trialled in a graduated way to begin with; perhaps by targeting only the poorest Indians, or only women, or only in one state. 
It’s clear that the time is not yet ripe for basic income to be brought to the legislative table in India, but a start has been made. Here are some reasons why I believe basic income is of particular importance to India today.
First, if there is any country in the world where a basic income would have immediate emancipatory effects on a substantial amount of the population, it is India. Despite having lifted a sizeable amount of people out of poverty, India has 270 million people living below the international poverty line of $1.90 a day — a full third of those living in extreme poverty around the world. 
The self-perpetuating cycle of poverty, illiteracy and malnutrition means that one in five Indians are struggling to be citizens in any meaningful sense. This is a negative status quo of enormous tenacity. But even a modest, unconditional, regular cash grant of $150 to $200 a year (the figure mooted by a number of Indian economists, including Abhijit Banerjee and Pranab Bardhan, as a realistic one for basic income) would immediately give a measure of invaluable economic security to one in five Indians.

Radical scheme could reanimate the buried promise of the democratic social contract by giving everyone in society — the rich, the middle-class and the poor — the same small sum of money.

Chandrahas Choudhury

Extreme poverty could be brought to an end almost overnight. Until fairly recently, the idea would have run into logistical complications, but recent advances in technology and financial coverage (including the Narendra Modi government’s large-scale banking access program for the poor) mean that the money could — in the near future if not immediately — be transferred directly into the bank accounts of the poor, without the last-mile delivery issues that bedevil other poverty reduction schemes.
Critics of basic income say it is too expensive to be feasible. Certainly, the financial demands of the scheme are great (somewhere between 5 and 10 percent of GDP, depending on who receives basic income, and how much). But, given that existing studies show that the emancipatory effect of basic income to the very poor is several times its real value, surely the more legitimate question to be asked of basic income in India is not why, but how?
But I don’t mean to suggest an Indian version of basic income should only be a targeted cash transfer for the very poor. If anything, this would be to negate the truly radical potential of basic income, as some of its supporters have inadvertently done (on the left, by treating it as merely a tool of poverty alleviation; on the right, by seeing it as a one-step substitute for big government and the welfare state). 
A better way to think about basic income, according to Guy Standing in his recent book “Basic Income: And How We Can Make It Happen,” is to see it as an instrument of democratization, for the realization in society at large of the principles of universal freedom and personal agency on which democracy is founded. And this is where India enters the picture.
Seven decades ago, India’s founding fathers broke with precedent when, at independence, they immediately instituted a system of universal adult suffrage among a population that was still overwhelmingly poor and illiterate (England, the colonial power that ruled it, had only recently given women the vote). 
India, then, began as a radical democracy. But, 70 years later, Indian democracy (like the major democracies of the West) has grown a bit stale in the face of rising inequality and creeping xenophobia. And for democracies to be nouns, they must first be verbs, able to adapt and innovate in response to new challenges. Universal basic income would be a way of reanimating the buried promise of the democratic social contract in India by giving everyone in society — the rich, the middle-class and the poor — the same small sum of money.
In the past, targeted poverty alleviation schemes and reservations for stigmatized social groups have been policy tools devised by Indian democracy to fashion a more just society. But they also have their biases, limits, loopholes, and dead ends. It is time to think of a new material platform for democracy. India should commit to the experimental examination of universal basic income as a way of putting its own democratic project on a more stable course for present and future generations.
  • Chandrahas Choudhury is a writer based in New Delhi, and the author most recently of the novel Clouds (Simon & Schuster, 2018)
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