Introduction to Universal Basic Income (UBI) in India
India, a nation with a rapidly growing population and a diverse economy, faces numerous challenges, including income inequality, the rise in cost of living, and the rapid implementation of automation and productivity tools. These factors contribute to significant economic struggles, particularly for individuals and families. In this context, Universal Basic Income (UBI) emerges as a potential solution to address these pressing issues. This article explores the necessity of implementing UBI in India and outlines how it can help alleviate the financial hardships faced by many citizens.
The Impact of Automation and Productivity Tools
Over the past several decades, the application of automation and productivity tools has drastically increased. According to data from 1975 to 2010, the productivity of tasks has risen by more than 200, or an average of 5.71% per year. Despite this substantial increase in efficiency, wages have not seen a commensurate rise. In fact, from 1964 to 2018, after adjusting for inflation, wages have only increased by a paltry 2.2% per year. This wage stagnation is a significant contributor to the 49% of Americans living paycheck to paycheck, a statistic that likely holds true for a substantial portion of the Indian population as well. This scenario is further exacerbated by the rising cost of living.
Economic Challenges in India
The cost of living in India is experiencing significant inflationary pressures. Across various sectors such as food, housing, energy, apparel, gasoline, services, medical care, and dining out, the cost has risen sharply. For instance, while food prices increased by 245% in the CPI from 1983 to 2013 (accounting for an 8.16% annual increase), housing costs rose by 1.29% per year. Similarly, the cost of medical care rose by 450% in the CPI (15% annually) from 1983 to 2013.
Education and Employment
Trying to address these issues through education is another avenue, yet it faces significant hurdles. A college education does not guarantee a well-paying job, as only 33% of students successfully graduate from college, and of those, about 47% land jobs that require a college degree. The burden of student debt adds another layer of financial strain. Therefore, a small, immediate UBI can provide financial stability during challenging periods and ensure individuals can survive and thrive despite these economic obstacles.
The Need for a Multi-Faceted Approach
While education and job training can help, they alone are not sufficient. A range of factors contribute to the current economic struggles, including automation, weakened unions, overseas labor, corporate lobbying, and stagnant minimum wage. Addressing some of these factors might exacerbate others, particularly the acceleration of automation, which could outpace the creation of new jobs.
Addressing the Criticisms of UBI
One of the common criticisms of UBI is that it is a form of taking from the rich to give to the poor. To counter this, it is essential to explain the broader benefits of UBI. For example, if UBI is implemented, it could lead to a reduction in rent in small towns, as 27% of the population might choose to move there for better quality of life. Additionally, UBI could revitalize smaller towns by creating local jobs, thereby offsetting the potential increase in rent in more populated areas.
Implementing UBI in India
To finance UBI, several measures can be taken. For instance, eliminating corporate welfare and implementing a value-added tax (VAT) of around 20% on non-basic goods can ensure more affluent individuals contribute more through their voluntary choice. This tax would be passed on to consumers, allowing those with greater financial means to fund UBI. Furthermore, replacing means-tested welfare programs with a uniform UBI can reduce administrative costs and streamline the distribution of financial assistance.
Conclusion
Universal Basic Income presents a compelling solution to the multifaceted economic challenges facing India. By providing a safety net and addressing the rising cost of living, UBI can empower individuals to maintain their jobs and lifestyle while navigating the complexities of modern economic conditions. It is an immediate and necessary step that, if implemented thoughtfully, can significantly enhance the well-being of India's citizens.