Just days ahead of the budget, former Chief Economic Advisor Arvind Subramanian said that the Central government and the states should launch the basic income scheme to tackle the ongoing farm crisis. However, the funds for the scheme should not be extracted out of the RBI reserves but through replacement of existing farm and fertiliser subsidies, he also said in a research article.
Terming the scheme as quasi universal basic rural scheme or QUBRI, Subramanian, currently a visiting lecturer at Harvard University, noted that it should be launched in such a way that it covers all except the well-off people in the rural areas.
“The transfer would not be to all rural households but all except the demonstrably well-off. This would make it not universal but quasi-universal,” he said in the article written with three co-authors Josh Felman, Boban Paul and M R Sharan.
Basic Income Scheme
It is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.
Adding, he said the governments should aim at making it better than the Telangana’s Rythu Bandhu initiative and Odisha’s Kalia scheme.
Through an illustration, he explained that an annual transfer of about Rs 18,000 or Rs 1,500 per month per household would cover 75 per cent of the rural population at a total fiscal cost of about 1.3 percent of Gross Domestic Product or Rs 2.64 lakh crore in 2019-20 prices, he said.
On Monday, Congress President Rahul Gandhi had announced that the party would introduce Minimum Income Guarantee for every poor person if voted to power.