Linking from the Chicago Policy Review.
The idea of Universal Basic Income (UBI) has gained traction over the past decade. While the idea of a basic income has existed since the American and French Revolutions, it has never been implemented on a country-wide level. Myriad questions remain on its execution: should it replace most or all existing welfare programs? Is it fiscally feasible, and how can it be funded? Would it be the best way to provide people what they need?
In high-income countries, UBI advocates have focused on concerns around increasing automation of jobs. In low- and middle-income countries the discussion is driven around whether a UBI would be able to provide services more effectively and fairly than existing government programs. This seems possible: cash transfers are proven to reduce poverty, encourage savings, and promote women’s empowerment, and a universally distributed cash transfer would ensure no one who needed it was excluded. While the reasons for wanting to implement a UBI might vary between countries, the first country-wide experiment with it could revolutionize benefits programs around the world.
For these reasons, Maitreesh Ghatak and Karthik Muralidharan’s “An Inclusive Growth Dividend: Reframing the Role of Income Transfers in India’s Anti-Poverty Strategy” argues for India’s adoption of an “Inclusive Growth Dividend” (IGD) for all citizens as part of a portfolio of programs for fighting poverty. The IGD differs from traditional UBIs in some key ways. The total value of the IGD is pegged at 1% of GDP, so while not providing a living wage, it is a politically and fiscally viable policy that would make a difference for poor households in India. 1% of GDP is far more affordable than providing a living wage for everyone, but its value will automatically adjust over time alongside economic growth and “would thus be a powerful practical and symbolic commitment to universally shared prosperity.”