[India has a large existing social security apparatus: The central government alone spends 5 percent of GDP on 950 programs. These range from free rice, an allowance to build houses and even guaranteed employment for some residents of rural areas. But inefficient implementation and diversion of funds because of corruption have long plagued the system, leading many to propose a universal basic income as a possible solution. India’s Economic Survey for 2017 highlighted the concept as a “powerful idea” that should be debated.]
By
Niha Masih
Buddhist
prayer flags in Sikkim, India, on April 11. (Annie
Gowen/The Post)
|
NEW
DELHI — High in the
Himalayas, Sikkim is one of the tiniest states in India. But it is about to
embark on an experiment of global interest.
Sikkim’s ruling party has announced an
ambitious plan to implement a universal basic income for every one of its
610,577 citizens.
If successful, the scheme would represent the
largest trial run anywhere in the world of a concept that supporters such as
Facebook’s Mark Zuckerberg say could provide a safety net, help alleviate
poverty and address the challenge of job automation. Detractors, meanwhile, say
it would reduce the incentive to work and would come at a huge expense.
A universal basic income is a regular,
guaranteed income paid by the government, universally and unconditionally, to
all citizens. It is a cash payment that aims to replace the often confusing
array of assistance that states offer to citizens and place spending decisions
in the hands of recipients.
“If there is one chance of it happening
anywhere, it is Sikkim,” said P.D. Rai, the sole member of India’s Parliament
from the state. Sikkim already has a progressive track record: In 1998, it was
one of the first Indian states to ban plastic bags — a ban that it has
implemented successfully, unlike many other states. It also provided housing
for all its citizens. Most recently, it became the country’s first organic
state, eliminating the use of pesticides and fertilizers.
Its social indexes also stand out from the
rest of the country, with a literacy rate of 98 percent, and it has reduced the
percentage of people living below the poverty line to about 8 percent —
compared with nearly 30 percent nationally. Sikkim’s small geographic area and
low population density have been responsible, in part, for its success.
Rai acknowledged that there will be
challenges. “It’s a matter of political will ultimately,” he said. “With the
rise of global inequality, we want to ensure that we bridge the gap.” Rai
declined to reveal how much the program, which was announced ahead of upcoming
elections this spring, would potentially cost the state.
The tourism and power sectors will be tapped
to raise the resources. Tourism is a major source of revenue, with more than
2.5 million visitors annually. As a surplus power generating state, Sikkim
sells 90 percent of its hydropower. For now, he said, the government is holding
meetings with experts and stakeholders and expects to roll out the scheme by
2022.
India has a large existing social security
apparatus: The central government alone spends 5 percent of GDP on 950
programs. These range from free rice, an allowance to build houses and even
guaranteed employment for some residents of rural areas. But inefficient
implementation and diversion of funds because of corruption have long plagued
the system, leading many to propose a universal basic income as a possible
solution. India’s Economic Survey for 2017 highlighted the concept as a
“powerful idea” that should be debated.
Elsewhere in the world, there have been
several small-scale experiments with implementing a universal basic income, but
they have met with limited success. In April 2017, the government of Ontario in
Canada announced a pilot project involving 4,000 people that would have cost
150 million Canadian dollars ($113 million). The project ended abruptly after a
year when the local government changed and the new administration described the
program as expensive and unsustainable.
In Finland, an experiment with universal
basic income similarly ended last year before its completion. The trial
included a $630 monthly payment to 2,000 unemployed citizens.
In the United States, meanwhile, the concept
has been floated in Stockton, Calif., by its young mayor. Last year, it
announced that 100 residents would receive $500 a month for 18 months.
The notion of a universal basic income has
found backers in Silicon Valley, with tech moguls such as Zuckerberg and Elon
Musk endorsing it. In his Harvard commencement address in 2017, Zuckerberg
spoke of the need for a “new social contract,” with ideas like a basic income
to provide a “cushion” for everyone. Musk has described it as a “necessary”
step as automation takes over human jobs.
But economists have pointed to various
possible pitfalls. Some question whether giving cash instead of something like
a food subsidy would lead to spending on wasteful items. Plus as prices rise, a
cash handout would buy fewer goods. Others say a basic income would
disincentivize work, raising the possibility of a shrinking labor force.
Hailing Sikkim’s initiative, Pranab Bardhan,
an economist at the University of California at Berkeley, said the rationale behind
a universal basic income in a place such as Sikkim is very different from a
place like Stockton.
“In developed countries, the main purpose is
to restructure or economize the existing welfare schemes, like unemployment
benefits,” Bardhan said. “In low- or mid-income countries, like India, the
rationale will be to address the minimum economic insecurity of a larger
section of the population, not just the poorest, without touching the existing
anti-poverty measures.”