Will Modi okay UBI for J&K?

The Jammu and Kashmir government, along with Chief Economic Advisor Arvind Subramanian, is preparing a detailed presentation for the Prime Minister’s Office on implementing universal basic income (UBI) in the strife-torn state.

This will envisage eliminating all other forms of subsidies and replacing these with an equivalent amount of cash in the bank accounts of beneficiaries.

A final decision on whether to implement the programme in J&K rests with Prime Minister Narendra Modi.

The presentation, being made by J&K Finance Minister Haseeb Drabu and Subramanian’s teams, might be submitted to the PMO by the end of this month.

“There have been discussions on implementing UBI in J&K -- not just as a pilot in some districts, but in the entire state, according to Drabu’s proposal in the state’s Budget,” said an official. “Finance Minister Arun Jaitley is also supportive of the idea. A presentation will now be made at the PMO.”

Though the concept of UBI has been around for some time, Subramanian spoke at length about it in his 2016-17 Economic Survey.

“Universal basic income is a radical and compelling paradigm shift in thinking about both social justice and a productive economy. It could be to the twenty-first century what civil and political rights were to the twentieth,” Subramanian had said.

He had argued that UBI would eliminate misallocation in subsidy schemes. But there have been doubts on the feasibility of such a programme, as it could first involve getting rid of massive and popular schemes such as the National Food Security Scheme.

Jaitley has said while he was in favour of cash payments to poor in lieu of subsidies, something as ambitious as UBI cannot exist alongside other schemes. It has to replace those schemes, the finance minister had said.

Drabu had in the 2017-18 Kashmir Budget, presented in January, proposed a social security fund to provide UBI to all those living below the poverty line through a direct benefit transfer system. Drabu had also made a presentation to Jaitley on UBI.

“At the moment, we are spending around Rs 2,000 crore on social welfare through a plethora of schemes…. Not only will it (UBI) eliminate all the leakages, the cost of delivery will also be reduced dramatically,” Drabu had said.

Photograph: Mridula Dwivedi.