Arvind Subramanian bats for basic income scheme to tackle farm distress; here’s how funds could be arranged

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.

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.

Also read: Share Market Live: Sensex down 120 points, Nifty below 10,650; Yes Bank, Bajaj Auto among top losers

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.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.