Sikkim has been over the news recently in the context of potentially being the first state to introduce Universal Basic Income (UBI) in India. All around the world there has been a growing fascination with the concept of UBI in the recent years. This reflects the rising sentiment shared by many who feel that the current economic and social policies are contributing to inequalities and creating societal injustices. UBI can be a way to scale these inequalities.
Basic income can be defined as a modest amount of money paid unconditionally to all individuals on a regular basis (for example, monthly). It is popularly known as Universal Basic Income (UBI) because it is intended to pay all individuals regardless of income, with no spending conditions and no behavioural requirements. This non-withdrawable and non-repayable income is to provide basic income security to all, especially to the most insecure groups in society.
The biggest claim in favour of basic income is that it would help in reducing poverty, simply because it would be the most direct and transparent way to transfer funds with low administrative costs. Moreover, since it is a universal income given unconditionally, there is no ‘means testing’ done to identify beneficiaries; therefore, it doesn’t stigmatise the recipients. Numerous studies have shown that due to the stigma attached to means-tested targeted welfare, people do not apply for assistance due to pride, fear or ignorance.The other claim is that UBI brings about equality in the work place since power relations between workers and employers become less unequal as workers have the option to exit. Furthermore, direct cash transfers are a more efficient way to ensure that the benefits are going directly to the people and bypassing bureaucracy. The universal character of UBI ensures that the benefits are received by all; hence, there is no wastage of resources in identifying beneficiaries. Targeting is generally quite inefficient as it produces huge scope for corruption.
Sikkim is on track to become the first state to introduce state-wide UBI in India. The Sikkim Democratic Front (SDF) is in talks to implement the scheme within the first three years after the party comes back to power in 2019 elections, i.e. by 2022. A basic income will be given on a monthly basis. Given that poverty in Sikkim is almost negligible, UBI will help in bringing about equity among the people. The government will however have to ensure that enough funds are gathered from various sources. So far, the identified sectors are the revenue from the hydropower sector and the tourism sector. Further research will have to be conducted to see if UBI is tenable for the state.
Sikkim has been a state of many firsts in India and UBI may be another step in the right direction for the state.