In this article, we will discuss UBI in India (Cons). So, let’s get started.
UBI in India (Cons)
- Higher Government Expenditure: If UBI is universal, which means all citizens, regardless of their financial capacity, are by default beneficiaries will widen the existing rich-poor gap in India.
- Adopting a universal approach in India would result in higher government expenditure as it will have to ensure that no citizens are excluded.
- Once introduced, it may become difficult for the government to wind up a UBI in case of failure.
- Conspicuous Spending: UBI is not tied to the recipients’ behaviour, and they are free to spend the money as they wish. Households with lack of awareness about fiscal management may spend on wasteful activities.
- There is no guarantee that the given cash will be spent on productive activities, health & education, etc. It may be spent on tobacco, alcohol, drugs, and other luxury goods etc.
- Reduction in Labour Force: A minimum guaranteed income might make people lazy and opt out of the labour market.
- In the absence of any reciprocal exchange, UBI in India may easily turn into a scheme that renders the working age adults as supplicants and without any real purpose or direction in their lives.
- Increase the Rate of Inflation: Replacing things like food programmes with UBI might expose the population to more market risks and inflation.
- Price fluctuation will affect the purchasing power of the consumers.
- Lack of Connectivity Channel Between Government and Beneficiary: In India, the poorest live in mostly remote areas and lack recourse to banking and often mobile phones is a major concern.
- Not all habitations have been covered by the banks and a lot of time and energy is spent in accessing banking services physically.
- Economic survey also points to JAM (Jan Dhan, Aadhar and Mobile) system as a prerequisite for a successful UBI implementation.
- Federal Challenge: Centre-State negotiations on cost sharing for the programme could delay its implementation.
- Since Indian states are at different levels of development, maintaining a uniform financial transfer will be challenging.