Answer Writing Practice for UPSC IAS Mains Exam: Paper - III (General Studies – II) - 07 March 2019


Answer Writing Practice for UPSC IAS Mains Exam


UPSC Syllabus:

  • Paper-III: General Studies -II (Governance, Constitution, Polity, Social Justice and International relations)

Q. What is the concept of ‘Universal basic income’? Will it help to deliver a guaranteed minimum standard of living for every poor Indian? Analyze. (250 words)

Model Answer:

Universal Basic Income is a periodic, unconditional cash transfer to every citizen in the country. Here, social or economic positions of the individual are not taken into consideration.

The concept of universal basic income has three main features. They are as following:

  1. UBI is universal in nature. It means UBI is not targeted.
  2. The second feature of UBI is cash transfer instead of in-kind transfer.
  3. The third feature is that UBI is unconditional. That means one need not prove his or her unemployment status or socio-economic identity to be eligible for UBI.

The international debate on basic income has advanced considerably in the past five years. Experiments have been launched in countries of different levels of per capita income, which include Canada, Finland, Kenya, Namibia, the Netherlands, Spain and the U.S., with plans being drawn up in England, Scotland, South Korea and elsewhere.

  • India could take the lead since it has the technological capacity, the financial resourcesand, above all, the need for a simple, transparent scheme to liberate the energies of the masses now mired in economic insecurity, deprivation and degradation.
  • In the 2017 Economic Report tabled by the government there is a chapter on how a basic income could be rolled out across India, and is affordable.
  • Its main author, former Chief Economic Adviser Arvind Subramanian, and others such as Professor Pranab Bardhan have proposed ways of paying for it — primarily by rolling back existing wasteful, distortionary, and mostly regressive subsidies.

Positive aspects: Based on studies

  • Earlier pilot practise: In 2010-2013, three basic income pilotsin West Delhi and Madhya Pradesh, in which over 6,000 men, women and children were provided with modest basic incomes, paid in cash, monthly, without conditions. The pilots involved the Self-Employed Women’s Association (SEWA) and financial assistance from UNICEF and the UNDP.
  • Outcome of pilot studies:The outcomes exceeded expectations, because everybody in the community, and not just select people, received their own individual transfer.
  • Nutrition improved sanitation, health and health care improved, school attendance and performance improved.
  • Further, women’s status and well-being improved, the position of the disabled and vulnerable groups improved by more than others. Also the amount and quality of work improved.
  • Above all, the basic incomes improved the community spiritand were emancipatory. Those who do not trust people wish to retain paternalistic policies despite decades of evidence that they are woefully inefficient, ineffective, inequitable and open to ridiculously extensive corruption. The tendency of elites to want to have common people grateful to their discretionary benevolence has blocked sensible economic reform.

 Related Challenges:

  • Planning the phased implementation of basic incomewill be a serious but manageable challenge. It will require goodwill, integrity, knowledge and humility about what will be inevitable mistakes.
  • If properly planned, it is possible to introduce a comprehensive scheme even in rural or urban low-income communities, without too much cost.
  • But it is essential to obtain local cooperation and awareness at the outset, and the backing of key local institutions.

 Recommendations

  • It is strongly recommended that if the government is to go ahead, it should phase in the scheme gradually, rolling it out from low-income to higher-income communities, after local officials have been trained and prepared.
  • It is also recommended that the authorities should not select particular types of individualsand give it only to them.
  • It is tempting to say it should go only to women, low-income farmers, or vulnerable social groups.That would be wrong. It would involve expensive and corruptible procedures, and risk evoking resentment in those arbitrarily excluded, who would probably be equally in need, perhaps more so.
  • What administrators often do not appreciate enough is that money is fungible. If money is given only to women, men will demand a sharesome women will give in, some will resist; it will be divisive.
  • In the pilots it was found that if men and women all have an equal individual amount,it promotes better and more equal gender relations. Moreover, giving to all in the community fosters solidarity within households and the wider community, apart from enabling multiplier effects in the local economy.

Conclusion

  • In the long term, financial institutionswould be less likely to extend loans to small-scale farmers. That is not the aim. If the loans were made on fair rules, it would be better to enable the debtors to pay them back less onerously.
  • That is why a basic income would be a more equitable and economically rational way of addressing what is undoubtedly an unfolding rural tragedy.
  • The beauty of moving towards a modest basic incomewould be that all groups would gain.
  • That would not preclude special additional supportfor those with special needs, nor be any threat to a progressive welfare state in the long term.
  • It would merely be an anchor of a 21st century income distribution system.The politicians must show the will to implement it.

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