Government is thinking about shifting the delivery of public welfare services. The new idea is for providing Universal Basic Income to the poor people so that they can obtain the public goods.
The Economic Survey, presented in the Parliament makes an exhaustive analysis about the feasibility of launching Universal Basic Income in India.
UBI is an old welfare idea aimed at providing basic income to all citizens. Finland has launched a UBI for their citizens. Several other small countries are thinking about its launch. According to the Wall Street Journal, Switzerland voters have rejected the programme.
Advantage of UBI in the present context is that once the UBI is provided, government can withdraw from most of the existing welfare programme. Supporting the UBI, the Survey says that welfare schemes have failed duet to inefficient targeting, leakages. On the other hand, once the JAM trinity is prepared in full force, UBI can be implemented better.
“…the case for UBI has been enhanced because of the weakness of existing welfare schemes which are riddled with misallocation, leakages and exclusion of the poor.”
At the same time, the survey brings a merit-demerit analysis of the UBI, highlighting that free money may discourage people to work or the so called moral hazard problem.
If a part of the subsidies given to the middle class is withdrawn, the UBI can financed according to the Survey.