Sikkim will be the first state to roll out Universal Basic Income (UBI) and has started the process to introduce the unconditional direct cash transfer scheme. Sikkim’s ruling party, the Sikkim Democratic Front (SDF), has decided to include UBI in its manifesto ahead of the Assembly election in 2019 and aims to implement the scheme by 2022.
The 2017 Economic Survey had flagged the UBI scheme as “a conceptually appealing idea” and a possible alternative to social welfare programmes targeted at reducing poverty.
Speaking to Media, Prem Das Rai, SDF MP in the Lok Sabha, said: “Our party and Chief Minister Pawan Chamling, who is the longest serving Chief Minister, are committed to bringing in Universal Basic Income. This, we will do three years of coming back to power in the state.”
“UBI is a scheme that a number of economists have talked about and it works well in developing countries. It has been tested even in India, debated within the Finance Ministry as early as 2017,” he said.
“It has been tried in Gujarat, Madhya Pradesh and tribal belts with fairly large samples and it has shown it works. Basically, its an income given to families irrespective what do they do. In Sikkim, it will be for everyone and every household.”
The SDF government has already considered the “affordability” of the scheme. The successful implementation of the hydropower projects by the state has made it a surplus power generating state. “The state produces 2200 MW and it will go up to 3000 MW in the next few years. The state’s requirement is only 200-300 MW and the rest goes to power trading firms. When this money comes in, we as SDF feels its people’s money and it should be utilized for them.”
“The process has already started in Sikkim,” he said. The idea is to subsume other subsidies and allowances in order to provide a particular amount every month to people. Rai said it would “work well for the youngsters” because “it would give freedom to choose their work, it will be more futuristic and it will serve as a future production tool. Young people can look into the future without worrying too much about income,” he said adding that UBI should not be looked at as a “sop”.
“It’s, in a way, trusting your people to do the best in a responsible manner,” he said. “This kind of measure could iron out some of the social evils we are seeing in our society today.”
Sikkim has a literacy rate of 98 per cent and its monthly per capita expenditure in rural areas is Rs 1,444.06 and it is Rs Rs 2,538.11 for urban areas. The BPL percentage has come down from 41.43% in 1994 to 8.19% in 2011-12.
Admitting that there could be some “misusing” Rai said studies in many countries and in India have proved that it will work. He said the state has improved drastically and its development indicators and the state government wanted to share the prosperity with its citizens.
“We are sure other states will follow us,” he said. “As far as I remember even Prime Minister Narendra Modi also talked about Universal Basic Income. Anyway, its an idea whose time has come,” he said.
The state will also restructure some social schemes and the “skewed” tax structure to find more resources. With tourism being another source of revenue for the state – the state gets around 2.5 million tourists a year – there could be some cess in future to generate additional resource to implement the scheme.