Jammu and Kashmir may become India’s first state to roll out universal basic income plan; Haseeb Drabu makes presentation to FM Arun Jaitley

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New Delhi | March 25, 2017 6:11 AM

Jammu and Kashmir may become India's first state to implement the universal basic income (UBI) plan that chief economic adviser Arvind Subramanian outlined in this year's Economic Survey.

 

Jaitley said that while he was in favour of a cash payment to the poor in lieu of existing subsidies, he didn’t want a situation where UBI was given in addition to the existing subsidies. (Reuters)

Jammu and Kashmir may become India’s first state to implement the universal basic income (UBI) plan that chief economic adviser Arvind Subramanian outlined in this year’s Economic Survey. Confirming this, J&K finance minister Haseeb Drabu said, “We had spoken about it in our budget and I have made a presentation on UBI for the state’s poor people to Union finance minister Arun Jaitley.” In an interview to CNCB-TV18, Jaitley said that even before Subramanian had floated the idea in the Economic Survey, “it got marginally reflected in the budget speech of one of the state budgets — Jammu and Kashmir”. Jaitley said that while he was in favour of a cash payment to the poor in lieu of existing subsidies, he didn’t want a situation where UBI was given in addition to the existing subsidies. “Indian politics is capable of coming to a conclusion, let the existing subsidies continue and let UBI be over and above that.”

While the central government gives J&K R4,000-5,000 crore each year in various programmes like MGNREGS, scholarships and mid-day meals, the J&K government has asked the Centre to give it enough flexibility to use the funds as it deems fit. Given the leakages associated with most government schemes, J&K wants to just give a flat amount of cash to each member of a poor family.

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In addition to what the Centre gives, the state government spends around R4,000 crore each year on various other subsidies which can be added to the pool. If J&K gives each poor person R5,000 per month, given its poor population of 20 lakh, that’s a monthly outgo of R1,000 crore. In which case, the UBI amount could be reduced initially or a cap could be put per family — one of the suggestions doing the rounds is to use a family cap of R1.5 lakh per year.

Though no decision has been taken on this as yet either, the Shanta Kumar committee had, two years ago, recommended moving away from the Food Corporation of India-driven procurement system for crops like wheat and rice which just benefited a small number of farmers in a handful of states and, instead, go in for a flat amount to farmers in their JanDhan accounts.

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