I fear this budget. I fear that Finance Minister Arun Jaitley might announce an idea that I have liked and advocated: The idea of a Universal Basic Income. I fear it because Jaitley may use this label to justify something quite the opposite. In the process, he might ruin a good idea.
Straws in the wind indicate that he might try something to this effect. Demonetisation was part of a grand political design of Garibi Hatao, version 2.0. The idea was to give a nicely wrapped gift to all the poor and engineer an enduring realignment of poor voters towards Modi. Now that most of currency is back in the banks, there is no money to buy that gift. Plan A has failed. The PM is desperately working out Plan B.
The Budget speech would be the last occasion before pains of demonetisation begin to weigh too heavily. It may also be an opportune moment to influence the outcome of Punjab and UP elections, now that the Election Commission has agreed to be a mute spectator to this unusual timing of the Union Budget. There is both pressure and temptation to announce something big, radical and populist. Some economists close to the government are hinting that this big measure could be Universal Basic Income.
Universal Basic Income is a very simple idea: Every citizen receives a fixed amount of income from the government on a regular basis. There are many versions of this idea but some features are common to most of the versions. One, its coverage is universal and includes every citizen without any distinction. Two, it is unconditional. Three, the income so transferred is enough to cover basic needs. Four, the transfer is in cash, not in kind.
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