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Financial viability of universal basic income

One argument that is cited against UBI is that it may generate laziness. The experiment is Kenya, quoted by Abhijit Banerjee and Bardhan, shows that it does not

Universal basic income | Raghuram Rajan

Sukumar Mukhopadhyay 

Sukumar Mukhopadhyay

(UBI) is an elegant model for economists. It has now been attracting a lot of attention all over the world, including the rich countries. The scheme is that all people in the country will get some cash without any relation to the work. Abhijit Banerjee, the Nobel laureate, in his book Good Economics for Hard Times, has made an elaborate case for . He calls it ultra basic (UUBI) because "any universal income that governments of poor countries can afford will be ultra basic”. Hence UUBI (page295). He further adds: "Given all this, the best combination may be a UUBI everyone can access when they need it, and larger transfers targeted to the very poor and linked to preventive care and children's education." Professor Pranab Bardhan suggested in his articles in Business Standard (on June 9,10, and 11, 2020), a cash grant of Rs 20,000 to each family irrespective of rich or poor but has finally conceded that it need not be given as a practical measure to plutocrats. Raghuraman Rajan has talked only about the poor, "We have seen over time that giving money directly to the people is often a way of empowering them. They can use that money for the services they need." The of India proposed something like this in 2017. It estimated that an annual transfer of Rs 7,620 to 75 per cent of India’s population would push all but the absolute poorest above the 2011-12 poverty line. UBI is for mitigating insecurity and abject poverty and not inequality.



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First Published: Sun, July 05 2020. 18:09 IST