Free Money? Seriously?

Universal basic income, an idea from medieval European philosophy, is offered as the mother of all welfare schemes. Money for nothing, which unburdens your mind to a degree, has its downsides and needs some homework before implementation. It’s an idea Modi is bound to be enthused by and he may be expected to give it full consideration. After demonetisation, this could be his next big thing.

- Ashish Mehta

From Mahatma Gandhi’s Sabarmati ashram to corporate talk shop Davos, it’s creating a buzz everywhere. If nothing is stronger than an idea whose time has come, then people in more and more countries are likely to start getting free pay cheques every month from governments. It’s called universal basic income (UBI) – an old notion of state welfare that has been rediscovered in the increasingly anxious West to counter joblessness and automation. After a failed start with a Swiss referendum last year (result: no), several European counties are starting pilot projects to deliver to all citizens a nominal amount of money not tied to any conditions or any health or pension scheme. Just plain free money.

In India too, for different reasons, the idea has arrived. Arvind Subramanian, a reputed economist and chief economic advisor to the finance ministry, has promised to devote a chapter to UBI in the economic Survey this year. Subramanian is enthusiastic about UBI. At the Gandhi Jayanti celebrations at the ashram last year, he held an imaginary dialogue with the Mahatma. “What would Gandhiji have said to this idea of UBI?” he asked, listing out at least four objections he would have – charity to able-bodied persons, cost to the government, market forces ranged against the poor, and men misusing the money on vices. Subramanian then went on to answer Gandhiji. “Today there are at least 1,000 schemes that the central government runs for the poor… It is not clear that the money actually reaches the poor. So the question is whether the UBI is a more effective way of reaching the poor,” the Indian Express quotes him as saying.