Simplifying the Direct Tax Vivad Se Vishwas Act – The Amnesty Scheme of 2020
June 26, 2020
Supreme Court’s Refusal to Exercise the Jurisdiction under Article 32: The Peculiar Case of Foundation for Media Professionals v. UoI
June 26, 2020

TACKLING THE LONG-TERM EFFECTS OF COVID19: RESURFACED DISCUSSION UPON BASIC INCOME

“The global economy is now in a recession thanks to COVID-19. We’ve never seen the world economy standing still. Now we do.”International Monetary Fund chief Kristalina Georgieva’s response to the global lockdown adequately explains the graveness of the issue that the whole world is facing at the present time. From the richest to the poorest countries, all are forced towards a complete lockdown fearing the pandemic’s grave impact upon the lives of people. The biggest threat besides the loss of life is its permanent effect upon the livelihood of the poor. Meanwhile, people with a contractual job have less to worry about the cash crunch, the real affected population comprises of those who are left with no source of stable income. These include landless farmers, informal non-agricultural workforce and the migrant workers being the most vulnerable population. In the case of India, the vulnerable population adds up to 308.3 million which is an alarming figure.In the given circumstances, the efforts to fight the pandemic are twofold, first being the healthcare arrangement which is draining the global wealth at a high rate and the other is the effort to keep the vulnerable population upstanding. Some of the states have come forward with schemes such as targeted cash transfers and utilities distribution service. All the steps that the government has taken or has considered to implement are just temporary provisions which have a very little to contribute to the long term effects upon the poor section of the country. These long term effects include increase in poverty, wider class gap between rich and poor and social insecurity among the vulnerable population. The World Bank has estimated that Covid-19 could push about forty nine million people towards extreme poverty and the same is going to increase if strong measures are not taken.Ergo, it is evident that a policy for solving the long term effects of the pandemic is an urgent need. The present article suggests that a provision for basic income will not only solve the contemporary problem but will also safeguard from any such problem in the future.
BASIC INCOME AS AN ECONOMIC TOOL
Basic income is an economical instrument that ensures a minimum earning to every person as a reliable source to provide them with the basic needs that are necessary to sustain and lead a life with dignity. In other words, it is a minimum income ensured to every person in order to cover their access to basic goods. The idea of basic income emerged in the west and has been a subject for discussion in the recent past. It has also become the prime agenda of the campaign for revolutionary politicians like Jeremy Corbyn of Britain, Bernie Sanders of US and Benoît Hamon of France, basic income is under consideration in the western countries. The western countries have considered the idea of basic income to overcome the fear of automation destroying jobs. Alongside, India has also stepped in to consider basic income although for a totally different purpose. The purpose of discussing basic income as an economic tool in Indian contexture is to eradicate poverty. Economic Survey 2016- 2017 which was published by Finance Ministry has discussed Universal Basic Income [Hereinafter “UBI”] in length conceptualizing it from a third world country’s perspective. It defined UBI as “a radical and compelling paradigm shift in thinking about both social justice and a productive economy”. The survey suggested implementation of UBI for the reasons that are threefold: social justice, poverty reduction and agency.
In regards to social justice, it is argued that in toto every theory of justice accounts for a decent minimum income for all individuals.A Basic Income opens the path for a society which treats its people as free and equals. It promotes liberty because it makes the spending habit of the labour class more flexible. When people have secured basic income, it has a positive psychological effect upon them as they can think of issues beyond the source of two cross meals. Knowing this, UBI appears as a feasible path for the government to reduce poverty as a comparatively low level of income transfers can yield high results, this is because a large segment of Indian population are rural households.
UBI also treats citizens as an agency rather than subjects which can be a more effective way of policy implementation. To understand, all the schemes that are run by the government at present time are based on some presupposition of needs of the poor, be it gas subsidy or agricultural subsidy. But what if the reason for distress among some poor household is not gas and something beyond the knowledge of the government. By giving a basic income to households, it will provide them with liberty to solve the cause of their distress. Thus, treating people as agency will yield comparatively more effective results. Subsequently, it can be inferred that all the benefits of the basic income are also the solution to the long term effects of the present pandemic upon the vulnerable class.
Similar to UBI, Congress Chief Rahul Gandhi pitched Minimum Income Guarantee [Hereinafter “MIG”] during his campaign for the 2019 Lok Sabha election. MIG is another postulate of a basic income. Under MIG, the congress politician promised that five crore families belonging to the poorest of the poor category will receive Rs.72,000 per annum. In his words, this is “final assault” to eradicate poverty. The basic difference between UBI and MIG is that MIG is a cash transfer directed only towards the vulnerable population where the classification of the targeted group is upon the discretion of the government. On the other hand, UBI as the name itself suggests is a universal cash transfer in which every citizen of the country will receive the cash transfer regardless of the income group that they belong.
RIGHT TO BASIC INCOME:LEGAL RIGHT APPROACH
More than just an economic tool, the focus of the present article is to highlight the importance of a stable income as a vital part of human life. Although, the economic approach suggests the requirement of legislation in order to implement a basic income, it does not have a sense of commitment on behalf of the government. The legal rights approach on the other hand will provide priority status to basic income over social policies writ large.It is argued that alike any other right which is fundamental to lead a life with dignity, income is an equal part. Moreover, it is a catalyst to meet the ulterior motive of human rights that is to cater fundamental freedom to all individuals. Article 3 of Universal Declaration of Human Rights, 1948 enshrines right to life as a human right, Article 22 enshrines right to social security, Article 23 enshrines right to work and Article 25 enshrines Right to an adequate standard of living. Even in the Indian Constitution, Right to life and livelihood have been included as a fundamental right under Article 21.None of these rights that have been enshrined in the sacred documents of human and fundamental rights are attainable without the presence of a stable income. Despite its importance as a right and an economic tool, basic income has faced criticism alike any other concept which is new and at an evolving stage. The criticism of the basic income are primarily twofold. First, that basic income will demotivate people to work and second, that it is not economically practical. Both of these have been discussed in the following paragraphs.
DISASSOCIATION OF INCOME AND WORK
While it is indeed true that help should be given to those who are worthy of it but the critics of basic income have confused it to mean that a person who has not worked hard to earn is unworthy of a basic income and thus creating an unbreakable link between work and income. Nevertheless, this is not always the case. The same can be understood from two instances. The first is the newly arising automation issue which has come out of the silicon valley and spread all over the west. It basically means that so much work is being done by the artificial intelligence, it is taking over the manual labour. The same is only at its origin and is expected to increase exponentially. In the given circumstance, there will be a surge increase in unemployment with the sole cause of automation. The second instance is all around the air at the present time. The present pandemic has forced most of the economies towards a complete lockdown for an indefinite period. In the given case, all the world leaders are requesting population worldwide to stop working. Thus, losing hands from a stable income. It can be observed that a human is not always required to work, nevertheless it requires a stable income throughout. These examples demonstrate the failure of link between work and income. While a high income should only be of those who deserve it, a basic income is a right of every person.
It is not completely within the purview of the present article to illustrate the practicability of basic income as it is a long discussion in itself with various references to micro and macro-economics, but it is completely practicable, as explained by the renowned economist Guy Standing in his book Basic Income- And How We Can Make It Happen.It has also been illustrated by the Economic Survey of India which analysed data to conclude that implementation of UBI or a likewise scheme will cost 4.9 percent of India’s GDP. In this case, there will be no requirement for other centre run schemes for poor like gas subsidy and others. The present expenditure of the centre upon all 950 sub-sponsored scheme aggregate to 5.2 per cent of the present GDP. If the present schemes are replaced with a UBI, there will be a surplus of 0.3 per cent of GDP. Therefore, implementation of UBI is economically practicable and the argument otherwise is principally defunct. 
CONCLUSION
It is needless to highlight the role that income plays in every person’s endeavour for a dignified life.At the same time it is also the duty of a welfare state to provide its citizens with the means to attain a life with dignity. In India, a big portion of the population still lives below the poverty line and there are more who will soon slip into this line because of the months lasting economic shutdown. This leaves the government with no other option than to roll in a support system for the vulnerable class. Although, there have be;en discussions to consider a basic income on previous occasions, the present pandemic has posed it as a solution to the unprecedented obstacle.

ABOUT THE AUTHOR(S)

 

Onam Jain is a third year law student at National Law University Odisha.

 

 

 

 

 

 

 Farhana Akhtar is a third year law student at National Law University Odisha.

 

 

 

In-content picture credits: forbes.com

Leave a Reply

Your email address will not be published. Required fields are marked *