India’s Basic Income Plan Could Be the Largest in History
India could roll out the world’s largest basic income ever soon. Rahul Gandhi, leader of the opposition Indian National Congress party, announced last week that his government would introduce a minimum income guarantee if elected in the spring. Details of the plan are unclear, including who will receive the funds, but it could herald the start of the most ambitious rollout yet.
Gandhi, who is challenging incumbent Narendra Modi for the office of prime minister, declared in the city of Raiput during a campaign speech that “we cannot build a new India while millions of our brothers and sisters suffer the scourge of poverty.” The Business Standard reports that the guarantee would be means tested, perhaps comparing the household income with the minimum wage and providing the shortfall, but the final details will be included in the manifesto coming up to the election. The idea is not new in India, with Modi advisor Arvind Subramanian noting in a 2017 report that spending two percent of gross domestic product, around 200 rupees ($2.79) per person per month, would cut extreme poverty 15 percentage points down to just seven percent.
With a population of over 1.3 billion, the second-largest country, a basic income in India would likely prove the largest in the world today. Other countries have performed smaller trials: Finland started paying €560 ($641) to 200 unemployed people in 2017. The council of Fife in Scotland looked into whether to run a similar experiment in the area. Startup incubator Y Combinator also announced plans to trial the idea with 3,000 people.
Gandhi’s proposal is likely to fall short of full universal basic income, which grants everyone money without means testing, but it could make a major difference. One idea suggested by Subramanian would transfer 18,000 rupees, or $250, per year to most except the richest 25 percent. This would cost 1.3 percent of gross domestic product, but it’s predicated on cutting rural subsidies. Many proponents suggest that basic income should replace other benefits, but the idea is less popular in practice.
The election is scheduled to be held sometime in April or May. Opinion polling suggests the current governing coalition may fall short of an overall majority, but ahead of the Congress-led coalition.
If Gandhi pulls ahead, it could be a major moment for basic income advocates.