Universal Basic Income & Social Security

For the uninitiated, UBI is a radical solution, which could provide a right to basic income to everyone. Generally, it consists of three elements. The first is universality; that is UBI for all. Second is unconditionally, meaning basic income without any conditions. Third is agency, which means it can make a citizen move away from being a subject of government welfare programme to agents of its own change.

Recent Developments

Equal Society in the World and India

  • The Scandinavian countries prove that an equitable society is not only the oretically plausible but also practically feasible as demonstrated by their Gini coefficients relative to the BRICS nations. The Nordic model, however, cannot be implemented in India, owing to population levels and per-capita income.
  • The Gini coefficient is a quantitative measure of inequality, presented in the range of 0 to 1, with 1 being complete inequality and 0 for complete equality.

Social Progress Index 2018 (India)

  • The Social Progress Index (SPI) measures the extent to which countries provide for the social and environmental needs of their citizens. Fifty-four indicators in the areas of basic human needs, foundations of well-being, and opportunity to progress show the relative performance of nations. The index is published by the non-profit Social Progress Imperative, and is based on the writings of Amartya Sen, Douglass North, and Joseph Stiglitz.
  • The SPI measures the well-being of a society by observing social and environmental outcomes directly rather than the economic factors. The social and environmental factors include wellness (including health, shelter and sanitation), equality, inclusion, sustainability and personal freedom and safety.

The index combines three dimensions

  • Basic human needs
  • Foundations of Well-being
  • Opportunity

Highlights

  • The study released by Institute for Competitiveness, India in collaboration with Social Progress Imperative is the first edition of a district level Social Progress Index for India.
  • It covers 637 districts from 33 states and Union Territories. The framework includes 50 distinct indicators, and it is the first ever effort to holistically and comprehensively assess the quality of life of India’s citizens on this level of granularity.
  • Overall, India’s districts achieve an average score of 56.66 on the Social Progress Index.
  • The Social Progress score of Indian districts lies between 28.67 and 76.80 on a scale of 0-100. These results highlight the immense scope for improvement for even the best performing districts. A closer analysis reveals significant challenges in the Central and Eastern region of the country comprising of Madhya Pradesh, Chhattisgarh, West Bengal, and Odisha.
  • India’s districts’ scores range from a high of 76.8 to a low of 28.67. The results show that there are considerable differences between districts, and there are clearly some underperforming outliers.Given the range of scores, there is immense scope for improvement for even the best-performing districts.

Top 10 Districts

Bottom 10 Districts

Mahe

Shahdol

Bangalore

Dumka

Chennai

Simdega

Dakshina Kannada

Alirajpur

Dehradun

Dhubri

Coimbatore

Malkangiri

Puducherry

Nabarangapur

Jalandhar

Jhabua

Ludhiana

Pakur

Rangareddy

Dindori

The districts are grouped into the following four tiers- Very High Social Progress, High Social Progress, Middle Social Progress and Low Social Progress.

Performance of Tiers

Category

Social Progress Index

Basic Human Needs

Foundations of Wellbeing

Opportunity

Very High Social Progress

65

68

63

64

High Social Progress

58

61

58

56

Middle Social Progress

50

53

50

48

Low Social Progress

41

43

41

40

Social Progress Index

  • The report released by the Social Progress Imperative analyses the social progress performance of 146 countries across five years (2014-2018).
  • Overall the world is getting better, with 133 of the 146 countries seeing overall improvements in social progress, with the greatest gains being recorded in parts of Asia and Sub-Saharan Africa.
  • The highest improvements are registered in the shelter, access to information and communications, and access to advanced education, all of which improved by three or more points in the past five years.
  • Norway tops the 2018 Social Progress Index ranking scoring 90.26/100, boasting strong performance across all the components of the index.
  • India has improved its performance by 2.29 points since 2014 and is now ranked at 100th position.
  • The results show that poorer countries are improving faster than the richer countries. All of the 30 highest ranked countries on the Social Progress Index are high income, but just two of them, Luxembourg and South Korea, experienced significant improvement since 2014. In contrast, the countries that have improved the most over the past five years are low and lower –middle income: Nepal, Ethiopia, Ghana and Pakistan.

Universal Basic Income & Social Security

Universal Basic Income is a radical and compelling paradigm shift in thinking about both social justice and a productive economy. A universal basic income is, like many rights, unconditional and universal: it requires that every person should have a right to a basic income to cover their needs, just by virtue of being citizens.

Why India Needs Universal Basic Income?

Despite making remarkable progress in bringing down poverty from about 70% at independence to about 22% in 2011-12 (Tendulkar Committee), it can safely be said that “wiping every tear from every eye” is about a lot more than being able to imbibe a few calories. And the Mahatma understood that better, deeper, and earlier than all the Marxists, market messiahs, materialists and behaviouralists. He intuited that it is also about dignity, invulnerability, self-control and freedom, and mental and psychological unburdening. From that perspective, Nehru’s exhortation that “so long as there are tears and suffering, so long our work will not be over” is very much true nearly 70 years after independence.

Arguments in Favour and Against UBI

For

  • Poverty and vulnerability reduction: Poverty and vulnerability will be reduced in one fell swoop.
  • Better targeting of poor: As all individuals are targeted, exclusion error (poor being left out) is zero though inclusion error (rich gaining access to the scheme) is 60%.
  • Insurance against shocks: This income floor will provide a safety net against health, income and other shocks.
  • Improvement in financial inclusion: Payment – transfers will encourage greater usage of bank accounts, leading to higher profits for banking correspondents (BC) and an endogenous improvement in financial inclusion. Credit – increased income will release the constraints on access to credit for those with low income levels.
  • Psychological benefits: A guaranteed income will reduce the pressures of finding a basic living on a daily basis.
  • Administrative efficiency: A UBI in place of a plethora of separate government schemes will reduce the administrative burden on the state.

Against

  • Conspicuous spending: Households, especially male members, may spend this additional income on wasteful activities.
  • Moral hazard (reduction in labour supply): A minimum guaranteed income might make people lazy and opt out of the labour market.
  • Gender disparity induced by cash: Gender norms may regulate the sharing of UBI within a household – men are likely to exercise control over spending of the UBI. This may not always be the case with other in-kind transfers.
  • Implementation: Given the current status of financial access among the poor, a UBI may put too much stress on the banking system.
  • Fiscal cost given political economy of exit: Once introduced, it may become difficult for the government to wind up a UBI in case of failure.
  • Political economy of universality – ideas for self-exclusion: Opposition may arise from the provision of the transfer to rich individuals as it might seem to trump the idea of equity and state welfare for the poor.
  • Exposure to market risks (cash vs. food): Unlike food subsidies that are not subject to fluctuating market prices, a cash transfer’s purchasing power may severely be curtailed by market fluctuations.

National Social Assistance Programme (NSAP)

NSAP comprises of five sub-schemes namely Indira Gandhi National Old Age Pension Scheme (IGNOAPS), Indira Gandhi National Widow Pension Scheme (IGNWPS), Indira Gandhi National Disability Pension Scheme (IGNDPS), National Family Benefit Scheme (NFBS) and Annapurna Scheme. The schemes of NSAP are implemented both in urban and rural areas, by the Social Welfare Department in the States.

  • The National Social Assistance Programme covers 3.20 crore beneficiaries include about 2.40 crore old age pensioners, 70.43 lakh widow pensioners and 10.32 lakh pensioners with disability.
  • NSAP has been included under Direct Benefit Transfer (DBT) scheme and in the current year State of Gujarat and UT of Lakshadweep are using 100% transfer through DBT mechanism.DBT has been partially implemented in the States of Jharkhand, Haryana, Maharashtra and Chhattisgarh.
  • For preventing leakages of funds to unintended beneficiaries 100% records have been digitized. •74.08% of Aadhar of beneficiaries have been seeded in the Bank A/Cs
  • There is proposal to revamp the National Social Assistance Programme (NSAP) as Pradhan Mantri Samajik Suraksha Yojana (PMSaSY) admissible to 5.07 crore beneficiaries.

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