Posts

Universal Basic Income in India
Universal Basic Income (UBI) is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement. This practically means that everyone gets the same amount of cash, regardless of their social or economic status. 

Universal Basic Income in India might soon become a reality. If India implements this program, it would be the first state-administered basic income program in the developing world. In a country with over a billion people, it would be a large-scale endeavor, but one that could improve the existing welfare system.

Pros and Cons for Universal Basic Income in India

In January 2018, Chief Economic Advisor of India Arvind Subramanian said in an interview with the India Times that he sees one or two states implementing Universal Basic Income in the next one to two years. UBI will allow the population to receive compensation to fulfill their basic needs and Subramanian argues that it will be an improvement over the current anti-poverty schemes in that are in place because the program would be easier to administer.

Supporters of this program also claim that a UBI would be an improvement over anti-poverty interventions and inefficient subsidies that have seemingly been largely consumed by the affluent and damage the country’s overall financial stability. Opponents of a UBI program claim that incentivize work, and that the government should focus more on funneling funds into education and health care.

Subramanian is not the only supporter of UBI, as the International Monetary Fund (IMF) also believes this program could be successful. The IMF estimates that the government could provide $35 a year to every citizen if the country eliminates food and energy subsidies.

Consequences of Universal Basic Income

Implementing a UBI and getting rid of energy subsidies would result in a sharp increase in energy prices. It is estimated that if the government implemented such a program, the cost of gasoline would increase by 67 percent, the price of diesel would increase by 69 percent, kerosene by 10 percent and coal by 455 percent.

India has been in a state of premature deindustrialization in recent years, meaning that the country is either partially industrializing or not industrializing at all. This is due to structural transformations due to changes in technology, making it hard for developing countries to become manufacturing powerhouses.

United Progressive Alliance Reform

India has already had progress in cash transfer programs, as in 2012, the United Progressive Alliance (a coalition of political parties) began reforming the government’s subsidy structure by making payments directly into beneficiaries’ bank accounts. This program was instilled to cut down the corruption, reduce leakages, eliminate middlemen, better target beneficiaries and speed up the transfer of benefits to eligible recipients. This program has been deemed overall as successful, but it remains a small part of India’s welfare infrastructure.

Since no country has implemented a long-term national UBI, India does not have a practical framework to make a comparison of whether the program will be beneficial for the country or not. So far, there are only theoretical ideas of this program. Developing a UBI program requires a high initial investment and may also require the country to scrap existing welfare programs. Countries implementing UBI pilots such as Finland will give India more data to draw comparisons with.

Universal Basic Income in India is a program that is gaining traction in the country. This can be attributed to complaints with the existing welfare programs, as well as the fact that the program is being supported by the Chief Economic Advisor of India and IMF.

Since there are no real-life examples of this program, one can only hope that its implementation would be beneficial for India and the country’s goal of eradicating poverty.

– Casey Geier
Photo: Flick

danish_politicsOn June 18, Denmark’s center-left government, the Social Democrats, were ousted out of the political limelight as the country moved dramatically to the far right in favor of the ring-wing, populist and anti-immigrant Danish People’s Party (D.P.P). The Danish People’s Party is often regarded with stigma both at home and abroad and is on the outskirts of Danish politics since its founding in 1996.

However, in the most recent elections, the D.P.P. came in second place with 21.1% of the votes, only 5.2% less than the number of votes received by the leading Social Democrats. According to preliminary results published by the DR.DK, Denmark’s national broadcaster, the center-right bloc that includes the D.P.P now holds a majority of 90 seats in Parliament, which, for the first time, has elevated the D.P.P. into the centerfold of Danish politics. The results of this election come on the heels of growing unrest within Denmark over issues related to immigration and the security of the Danish welfare state. Denmark, a socialist and uber-liberal country which was voted “happiest country in the world” last year, is one of the highest-functioning welfare state programs in the world. The thanks is owed to the Danish citizens paying the highest income taxes in the world, at 60.2%.

The Danish welfare state was created in 1933 following the Social Reform Act, which sought to redirect Denmark’s attention inwards following the loss of the last remnants of the former Danish Empire, which once included Southern Sweden, Northern Germany, Iceland and Norway (and continues to include Greenland and the Faroe Islands). A “Denmark for the people” mentality was adopted, which subsequently iterated outwards into a Scandinavian-socialist ethos which has traditionally regarded foreign aid as an obvious centerpiece of Danish foreign policy. Providing welfare services “from the cradle to the grave” for citizens at home, such as free childcare, education through university and healthcare, and providing international aid to citizens abroad was regarded as two sides of the Danish-socialist-mentality coin.

The recent elections reflect the ways in which some Danes have begun to adjust their thinking about the welfare state and its relationship to those outside the “Danish family.” Similar to the recent wave of anti-immigrant parties which have popped up throughout Europe, such as the Finns Party in Finland, the Progress Party in Norway, the Sweden Democrats in Sweden and UKIP in the United Kingdom, the D.P.P. frames itself as the voice of “Old Danes” who regard the growing influx of immigrants within Denmark as a threat to the Danish welfare state and the Danish way of life.

The presence of immigrants in Denmark, who make up around nine percent of the population country-wide, in conjunction with the recent surge of 14,000 mostly Muslim asylum seekers and the Copenhagen shootings of February 14 by the 22-year-old son of Palestinian immigrants, has produced a backlash of growing nationalist sentiment in Denmark. As a result, supporters of the D.P.P. have begun to implicitly redefine how “Denmark for the people” is understood. A motto that traditionally went unchallenged, given the historically monocultural and monoethnic nature of the Danish population, is now being reformulated by the D.P.P. to function more as “Denmark for the Danes;” as the D.P.P. has proposed slashing welfare entitlements for newly arrived immigrants and refugees into the country.

Increasing exclusivity regarding Danish welfare state benefits is being matched in Parliament by talk among the D.P.P and the Liberal Party that Denmark should cut back on foreign aid in order to channel more money into welfare entitlements for native Danish citizens, especially the elderly. In 1970, the world’s richest developed countries agreed to give point seven percent of their Gross National Income (GNI) annually to international development aid.

Historically, Denmark, along with Norway, Sweden, Luxembourg and the Netherlands, has been one of the few developed countries to actually commit to reaching this target. Proposals or talks of cutting foreign aid thus represent a dramatic break from Denmark’s historically extraordinary commitment to reaching the point seven percent goal. A survey conducted for the Ministry of Foreign Affairs has also found that right-wing political opinion about foreign aid is being matched in public opinion, as support among Danes for foreign aid has fallen by 15% in the last five years. The recent shift to the right in Denmark now leaves Sweden as the only country in Scandinavia in which the center-left continues to hold the majority of political power. The Swedish equivalent to the D.P.P. – the Swedish Democrats – also continue to be regarded as political pariahs in mainstream Swedish society.

Despite Denmark’s sudden swing to the conservative anti-immigrant right, the country currently continues not only to meet but to exceed the annual point seven percent foreign development aid target.

– Ana Powell

Sources: BBC, CNN Money DR, The Guardian New York Times 1, New York Times 2 OECD
Photo: Dagens

United Kingdom’s Hidden Poor
The United Kingdom is one of the wealthiest countries in the world. It boasts Europe’s second biggest economy after Germany. It also has a $2.313 trillion dollar GDP according to the CIA’s 2012 World Fact book website estimations. Given these statistics, the recent announcement that the U.K. suffers from almost untold amounts of deprivation in its society due to both financial and economic insecurities comes as a surprise.

The University of Bristol recently published a report which paints an extremely dark picture of life in the United Kingdom. According to the study, over half of the U.K.’s population is suffering from some type of financial trouble. The study also reported that about 5.5 million adults in the U.K. go without some types of essential clothing; in addition, four million children and adults are not fed properly by today’s standards.

The Trussell Trust, which is the largest provider of food banks in Great Britain, issued a report in which they said more than 350,000 people went to their various food banks for help in the past year, which, according to their figures, is almost triple the number of people that required food aid in 2012.

The Guardian published a report by a charity in the U.K. known as 4Children, which reported more than half of Britain’s poor children reside in homes that are cold or not heated. Also, more than 55 percent of the children surveyed stated that they felt embarrassment over the fact that their family was not well off, and 14 percent had experienced some sort of bullying as a result.

These types of numbers are indeed surprising from one of the richest and most well off countries in the world. The study by the University of Bristol also found that living conditions for the U.K.’s hidden poor have indeed slid backwards. The study showed that one-third of British households could not afford to adequately heat their homes in the winter of 2012 and that the number of homes that could not afford to adequately heat the living areas of their homes is at a record high of nine percent.

There was also an extreme lack of adequate food for children noted in the study. The study noted that over half a million children live in homes that cannot adequately feed them. The Guardian also reported that the “squeezed-middle” families with two children need to earn over $37,000 pounds per year in order to meet what the public deems as the lowest ordinary acceptable living standards.

Great Britain is one of the most wealthy, powerful, and influential countries in the world, but if it does not begin to seriously examine those families who fall through the cracks in the welfare system, the U.K. will begin to suffer the effects. These families are the ones who work but still are unable to make end meet at the end of the month. They are hidden because they do not fall into a definable category and thus get left behind by the welfare state.

 – Arthur Fuller

Sources: Bristol university, The Guardian Society Section, CIA, The Huffington Post, The Guardian, The Mirror