Mr Subramanian said Universal Basic Income will bring the people out of poverty, if implemented.
In his first ever interaction with the public through Facebook Live, Arvind Subramanian, the chief economic advisor to the Finance Ministry, discussed the idea of Universal Basic Income (UBI) again and said it will bring the people out of poverty, if implemented. The idea of UBI was recently proposed in the Economic Survey for 2016-17 presented ahead of the Union Budget.
The Survey described UBI, a form of social security in which everyone is allotted a basic allowance, as "a powerful idea" but one that's "not ready for implementation".
"The amount that is given (under UBI) will be enough to guarantee a certain basic standard of living to allow you (people) to go above poverty line," said Mr Subramanian, responding to a question during his live Q&A session on the social networking site.
Mr Subramanian further noted that for the UBI to be implemented, the government will have to do away with all the "wasteful subsidies". He also said that subsidies to the middle class amounted 1.5-2 per cent of the GDP.
"In principal it (UBI) is universal but in practise we can try and exclude certain people and encourage some people to exclude themselves," said Mr Subramanian.
Under the Survey's calculation, a UBI that cuts the poverty rate to 0.5 per cent of the population would cost 4 to 5 per cent of GDP. The calculation presumes that the richest quarter of Indians does not get the income, because it says any programme cannot in practice strive for strict universality.
As per estimates given by the Rangarajan committee, 29.5 per cent of India's population was below poverty line in 2011-12.
On the issue of digitalising the Indian economy post-demonetisation, Mr Subramanian said there were "about 35 crore people who do not have phones. For this category of people, we have to make it easier for them to access digital... But at the same time, we need to remember that cash will remain important for this category of people," said Mr Subramanian.
Talking about India's comparison with China in terms of trade with the world, Mr Subramanian said: "India's trade-to-GDP ratio is at 54 per cent, which is better than China's."
The Survey described UBI, a form of social security in which everyone is allotted a basic allowance, as "a powerful idea" but one that's "not ready for implementation".
"The amount that is given (under UBI) will be enough to guarantee a certain basic standard of living to allow you (people) to go above poverty line," said Mr Subramanian, responding to a question during his live Q&A session on the social networking site.
Mr Subramanian further noted that for the UBI to be implemented, the government will have to do away with all the "wasteful subsidies". He also said that subsidies to the middle class amounted 1.5-2 per cent of the GDP.
"In principal it (UBI) is universal but in practise we can try and exclude certain people and encourage some people to exclude themselves," said Mr Subramanian.
Under the Survey's calculation, a UBI that cuts the poverty rate to 0.5 per cent of the population would cost 4 to 5 per cent of GDP. The calculation presumes that the richest quarter of Indians does not get the income, because it says any programme cannot in practice strive for strict universality.
As per estimates given by the Rangarajan committee, 29.5 per cent of India's population was below poverty line in 2011-12.
On the issue of digitalising the Indian economy post-demonetisation, Mr Subramanian said there were "about 35 crore people who do not have phones. For this category of people, we have to make it easier for them to access digital... But at the same time, we need to remember that cash will remain important for this category of people," said Mr Subramanian.
Talking about India's comparison with China in terms of trade with the world, Mr Subramanian said: "India's trade-to-GDP ratio is at 54 per cent, which is better than China's."
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
