NEW REVISION CLASSES PRE'17 History+ Environment+Govt Schemes

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Why Universal Basic Income as supplementary to all subsidies(incl. in kind) etc is bad idea?

In article published in hindu author presents the criticism of model of UBI as envisaged in the Economic survey. Arguing that it should be complementary to the in kind subsidies as originally propounded by the European author.
http://www.thehindu.com/opinion/lead/getting-the-basics-wrong/article17383649.ece
Why there is need to continue 'other subsidies' when govt is providing the lumpsum amount to augment the individual ability to do so in the first place?
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Comments

  • Because
    1. UbI would cost a major share of GDP , all the current subsidies cost less that how much Ubi would cost.

    2. Ubi doesn't take into account future inflationary risks. Current PDS takes care of that.

    3. It will be just another burden on the honest taxpayer, who will pay his own Ubi n those of others too.

    I have failed upsc mains a couple of times.
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  • Can cash-transfer be the solution to all woes plaguing the downtrodden? Why there is not much of opposition from the industry at UBI when they opposed tooth and tail at the Centre's calculation of min wage pegged at ~ Rs. 9000?

    As @buddhu has stated, UBI costs more to GDP (>10%) than the traditional welfare schemes which cost around 4-5% of the GDP. The gap can be met by either additional tax revenues (none would like to be taxed), shrinking the scope of coverage or shrinking the money being doled out. Thus, the substance of UBI generates more curiosity for other reasons than for the tasks it is designed for.

    UBI is ostensibly being forwarded to free the Govt from PDS, MGNREGA and other welfare measures meant for the poor.

    Tendulkar Committee draws the poverty line at Rs.33/day. In a month, it comes at around ~ Rs. 1000. Even if the amount is credited to 'universal' population, it amounts to around 10% of the GDP, which the Govt will never be able to commit itself with.

    But accepted that govt will dole out Rs. 1000/month/head, will this money be sufficient enough to live? At any market, cost of consumable rice is Rs. 22/kg or more. Edible oil per liter hovers anywhere between Rs 80 - Rs. 100. Etc. The talk so far is only about kitchen, Can this paltry sum meet up the needs of a poor family? What about housing, health, sanitation, employment, education etc? Rs 1000 can never be equal to the traditional welfare schemes currently put in practice. Present welfare schemes + direct benefit transfers, despite criticisms, have more add-on values than an irresponsible and disrespectful sum of money.


    Industry bigwigs (foreign mainly) have always hated Indian subsidy regime. By trying to eliminate the current schemes, we are succumbing to their pressure tactics (Read WTO debate).


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  • Thanks.
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  • Wakaao said:

    Can cash-transfer be the solution to all woes plaguing the downtrodden? Why there is not much of opposition from the industry at UBI when they opposed tooth and tail at the Centre's calculation of min wage pegged at ~ Rs. 9000?

    As @buddhu has stated, UBI costs more to GDP (>10%) than the traditional welfare schemes which cost around 4-5% of the GDP. The gap can be met by either additional tax revenues (none would like to be taxed), shrinking the scope of coverage or shrinking the money being doled out. Thus, the substance of UBI generates more curiosity for other reasons than for the tasks it is designed for.

    UBI is ostensibly being forwarded to free the Govt from PDS, MGNREGA and other welfare measures meant for the poor.

    Tendulkar Committee draws the poverty line at Rs.33/day. In a month, it comes at around ~ Rs. 1000. Even if the amount is credited to 'universal' population, it amounts to around 10% of the GDP, which the Govt will never be able to commit itself with.

    But accepted that govt will dole out Rs. 1000/month/head, will this money be sufficient enough to live? At any market, cost of consumable rice is Rs. 22/kg or more. Edible oil per liter hovers anywhere between Rs 80 - Rs. 100. Etc. The talk so far is only about kitchen, Can this paltry sum meet up the needs of a poor family? What about housing, health, sanitation, employment, education etc? Rs 1000 can never be equal to the traditional welfare schemes currently put in practice. Present welfare schemes + direct benefit transfers, despite criticisms, have more add-on values than an irresponsible and disrespectful sum of money.


    Industry bigwigs (foreign mainly) have always hated Indian subsidy regime. By trying to eliminate the current schemes, we are succumbing to their pressure tactics (Read WTO debate).


    Thanks:)
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  • in addition to what is said above.
    ubi envisaged in economic survey is less of ubi and is more of modified DBT(freeing govt. from logistics of targeting.)
    ES says that ubi should not be an add on but a replacement of current subsidy regime. now this becomes a sliprry slope. what if tomorrow govt. decide to shut down colleges, school and hospital by paying citizens a particular amount for education and health. it is duty of a government to ensure not only the availabity of basic needs but also the quality of these needs.with govt. institution there is always a scope of improving these facilites.
    ES also state that ubi should not pe part of wealth transfer scheme. than the question arises how are we going to fund the ubi, will there be another cess for it? with rising wealth inequality, it is right and just that ubi should be part of wealth transfer mechenism.
    in european nation the idea of ubi is being used to tackle the problem of unemployment and help citizen live a dignified life but ES complety missed this point.
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