 "Arvind Subramanian")
Chief Economic Advisor Arvind Subramanian on Friday said Universal Basic Income (UBI), as proposed in the recent Economic Survey, can be put in place only after withdrawal of the existing welfare projects.
“The cost of this programme (UBI) is so huge that it cannot be an add-on to the existing programmes (welfare schemes) as the government cannot afford it and the government’s finances will go bust,” Subramanian said while addressing students of the Indian Institute of Management-Ahmedabad (IIM-A).
“In India, UBI scheme is about upliftment of the poor... The government spends a lot of money in social welfare schemes, but they do not reach the targeted audience,” he said.
“Advantage of UBI is a very interesting way of overcoming the problem of governmental targeted spending,” Subramanian, also an alumnus of IIM-A, said.
But he sounded a note of caution as “it is very easy to introduce new programmes in the country, but it is very difficult to withdraw the existing ones".
"Though this idea has been appreciated as a good one to alleviate poverty and provide basic level of income to people, it should be implemented in a way that is sustainable," the chief economic advisor suggested. People will make a hue and cry if something given to them is withdrawn, he said. Subramanian's UBI proposal in the Economic Survey had led to speculation on whether the government will implement it in the country.
Avoiding making any comments on the note ban process undertaken by the Centre, he said the focus should now be on arresting the flow of black money. “Black money has two dimensions including money made from prohibited activities and that made legally but not disclosed. There is a stock and flow of black money. Now that demonetisation is done, we should focus on flow of black money and it is going to need sticks and carrots."
