Ahead of the Union Budget for FY24, a member of the official think-tank Niti Aayog, Ramesh Chand, has backed the provision of a quasi-universal basic rural income scheme through a more inclusive version of the Pradhan Mantri Kisan Samman Yojana, which provides Rs 6,000 to 110 million small and marginal farmers. This scheme should also include agricultural labourers, construction and non-farm workers who are in very sizeable numbers. Chand told this newspaper that “everybody who satisfies some criteria such as people exempt from income tax or total income up to a threshold level of should be given the support”. The proposal certainly has merit considering the narrative of distress in the countryside. During the pre-Budget rounds of consultation, farmer representatives even asked for higher PM Kisan income support in view of the input cost escalation. During the last eight years, the average annual growth of 5% per annum in daily wages for agricultural labourers has also been eroded by inflation, according to RBI’s latest Handbook of Statistics on States. It merits mention that even former chief economic advisor Arvind Subramanian—who floated the idea of a truly universal basic income scheme as a “conceptually appealing idea” in the Economic Survey for 2016-17—suggested not so long ago a quasi-UBRI scheme for 60-80% of the rural poor.
The big question pertains to the affordability and feasibility of a quasi-UBRI scheme. Chand, for his part, does not give any numbers beyond the conversion of PM Kisan, adding that other subsidies could be subsumed at a later stage. Prima facie, spreading the existing amount over a larger number of beneficiaries in the countryside is unlikely to benefit either the farmers or agricultural labourers. Over three years, financial support of more than Rs 2 trillion has been provided to small and marginal farmers. which came in handy particularly during the nationwide lockdown to battle Covid-19 in 2020. These numbers have to be scaled up if there is political will to extend assistance to the bottom of the rural pyramid by scrapping subsidies or even taxing agricultural incomes, as has been suggested by a former revenue secretary, Tarun Bajaj. Quasi-UBRIs, or UBIs, have considerable appeal among economic reformers who prefer a minimalist State as it represents a possible alternative to various social welfare programmes that are not effective in bringing down rural poverty. It is far better instead to scrap these programmes and subsidies, and provide a direct cash transfer to the beneficiaries.
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As for feasibility, rolling out a quasi-UBRI per se ought not to pose problems as there is already a critical mass of similar schemes that have been implemented in the various states without fiscal stress and can be scaled up like Rythu Bandhu of Telangana or Krushak Assistance for Livelihood and Income Augmentation (KALIA) of Odisha, that is more inclusive in providing financial assistance to all cultivators and tenants who do not have titles to their land and landless agricultural labourers. Leveraging these best practices can definitely help PM Kisan become a quasi-UBRI.
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Research has shown that income support from this scheme constituted 6-7% of the annual income of farmers at an all-India level in FY19, which was higher for poorer states. Including agricultural and non-farm labour towards a nationwide quasi-UBRI is certainly an appealing idea whose time has come.