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article imageIndian state to embark on universal basic income experiment

By Tim Sandle     Jan 18, 2019 in Business
Gangtok - A small state in India is to embark on an economic experiment by introducing universal basic income. While the state of Sikkim is small, the concept is attracting global interest.
Located in the upper reaches of the Himalayas, Sikkim is one of the smallest states in India. However, its tiny geographical reach and relatively small population have not proved a hindrance to the state declaring it will experiment with a universal basis income project. This will apply, The Washington Post reports, to each of the state's 610,577 citizens.
Sikkim borders Tibet in the north and northeast, Bhutan in the east, Nepal in the west, and West Bengal in the south. The party in power is the Sikkim Democratic Front, a center-left organization which has a relatively progressive track record in terms of welfare and environment.
What is universal basic income?
A universal basic income refers to a periodic cash payment delivered to all on an individual basis, without means test or work requirement. This functions as an alternative to welfare payments. There are different variants of the theory, in terms of whether the income is full or partial, and whether it is conditional or unconditional. In essence the sum, once received, would be sufficient to meet a person's basic needs (at or above the poverty line.
One of the earliest champions of universal basic income was the U.S. Marxist academic Erik Olin Wright, who makes the case for eroding capitalism by forming and expanding non-capitalist spaces within it and sees a an 'unconditional' universal income as one of the tools to achieve this.
The problem of universal basic income
While universal basic income sounds plausible on paper, the attempts to pilot it have not been wholly successful. For example, as Paul Wallis reported for Digital Journal, in Switzerland the idea was rejected by a referendum. Furthermore, a pilot run in Finland was abandoned (the scheme gave citizens €560 ($624) every month for two years), despite initial reports of success in terms of improving health and welfare.
Arguments against universal basic income include the idea that it reduces the incentive to work; another is the opposition to income being detached from work; and a third issue posed is about reciprocity: should income be unconditional, with no regard to people’s contribution to society?
Despite such false starts, a 2016 poll showed that 58 percent of the European people are aware of basic income and 65 percent would vote in favor of the idea.
The advantages of universal basic income
In his Digital Journal piece, Wallis presents the benefits of universal basic income (UBI), which include:
Realistic life choices most people don’t really have now, and definitely won’t have in a UBI-less future.
Some level of actual economic capacity to improve oneself.
Reinforcement for basics like power, phone, internet and other bills.
Cash for health and pharmaceuticals.
An end to poverty, humanity’s oldest and worst self-inflicted enemy.
An end to the tyranny of the modern workplace, that DIY insane asylum which pays you far less than the stress is worth.
From this perspective, universal basic income - as a form of social credit - can address the problems of welfare payments and rising unemployment.
Sikkim pilot
The pilot in the Indian state is being championed by its member of parliament, P.D. Rai, as a means to address inequality. The aim is to implement the scheme by 2022. Speaking to The Indian Express, Rai said: “Our party and Chief Minister Pawan Chamling, who is the longest serving Chief Minister, are committed to bringing in Universal Basic Income. This, we will do three years of coming back to power in the state.”
The model is to introduce a form of universal basic income comprised of three components: universality, unconditionality, and agency (by providing support in the form of cash transfers to respect, not dictate, recipients’ choices). The philosophy underlying this is based on both social justice and with building a productive economy.
For financing the basic income scheme, state officials are planning to use surplus energy generation revenue (from hydropower) and redirecting costs from welfare programs which cease to be relevant.
For adherents of universal basic income, all eyes will be on the Sikkim experiment: it could provide the catalyst for change.
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