The Indian state of Sikkim has announced a plan to provide a universal basic income (UBI) for each of its 610,577 citizens. If successfully implemented, it will be the world’s biggest experiment on these lines.
The ruling party, the Sikkim Democratic Front, has announced that it will implement the plan by 2022, provided that it is voted back to power in the elections to be held this year. Interestingly, the incumbent Chief Minister of the state, Pawan Kumar Chamling is also the longest-serving Chief Minister in the history of independent India. He has been in power since 1994.
What is Universal Basic Income?
The idea is based on the premise that each citizen, irrespective of any social or economic factors, must have right to a basic income that covers his needs. So, the UBI is a universal, guaranteed, and unconditional income that the government pays to all its citizens.
This is different from other pension programs or benefits disbursed by the government as it is not specific to a limited group of people nor do the beneficiaries need to fulfil any conditions to obtain the benefit.
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Pros and cons of UBI
UBI is widely seen as a means to reduce poverty, provide equal opportunity, and foster social justice. Proponents also claim that it increases creative pursuits – that the youth can take up careers that they want to, without worrying about the financial returns. It also eliminates corruption and increases transparency of transfer systems.
However, its opponents argue against its sustainability and inefficiency. They claim that it reduces the incentive for citizens to work and search for employment opportunities, diminishing the workforce. It is also argued that the program will cost the government a lot of resources and hence, might not be sustainable in the long run.
How does the Sikkim government plan to generate resources for UBI?
The Sikkim government has considered the economic feasibility of this program. Firstly, the state produces a surplus power due to the successful implementation of hydropower projects. It sells away around 90 percent of its hydropower to power trading companies, which could help in generating resources required for such a project. Moreover, the tourism industry in Sikkim is lucrative as this tiny state in the midst of the Himalayas sees a huge number of travellers each year. Also, the government intends to do away with subsidies, allowances, and other social welfare programs to fund this program.
UBI in other countries across the world
Other nations across the world have also experimented with the UBI with limited success.
For instance, Finland started its two-year pilot program in January 2017, in which a random sample of 2,000 citizens aged 25 to 58 was paid a monthly remuneration of 560 euros. However, the government decided to end this scheme by 2019.
Further, in April 2017, the Canadian government announced a pilot program involving a sum of 150 million Canadian dollars and 4,000 citizens. But, this project also ended suddenly when there was a change in the local government. The new government cancelled the program saying that it was not a sustainable one.
Similar programs have also been undertaken in the other states of India, Netherlands, Kenya, and the United States.
What do you think about the Universal Basic Income scheme? Do let us know.
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