Delink universal basic income from response to pandemic: Exp Secy

So I would like to delink the universal basic income from response to pandemic," Somanathan stated. With regards to the question of amount being provided to deal with the pandemic is inadequate, he said no funds would be adequate for the kinds of trauma people have gone through.

The concept of universal basic income (UBI) should be delinked from the response to coronavirus pandemic, as even with the UBI in place, the government would have to do something more, Expenditure Secretary T V Somanathan said on Wednesday. "In a pandemic governments are expected to respond by giving something more than what you already have. So the limited point I am making is, the case for universal basic income must stand or fall on its own without a linkage to special calamities or incidents like the pandemic because that is not going to be an answer for these incidents," the Secretary said at the NCAER's India Policy Forum 2020.

He added that even countries with a very strong social security system and with a substantial universal basic income in place, would have had to do something more. His comments have come against the background of experts calling for using instruments like UBI to ensure a minimum income to the poor hit by the COVID-19 crisis.

Nobel prize winner Abhijit Banerjee opined that although Universal Basic Income would not solve the problem of COVID-19 crisis directly, it is important to open channels to have a way to send money. "If you have to do something more, the higher the starting point is, in terms of fiscal cost, the less room you will have in a pandemic. So I would like to delink the universal basic income from response to pandemic," Somanathan stated.

With regards to the question of amount being provided to deal with the pandemic is inadequate, he said no funds would be adequate for the kinds of trauma people have gone through. "But the question that we face in public finance is do you make your decisions in one big announcements in the beginning without knowing how long or how much you would need to spend or you wait and keep releasing instalments of public funds as the situation evolves and we have definitely chosen the later course and not the former.

"That is why we initially announced three months of free ration which we extended it, so it is now 8 months of ration," he said. Further he said that it would be a mistake to re-orient entire welfare system based on the short run experience of this one pandemic, especialy in the healthcare space.

"To decide healthcare priorities based on this four months would be wrong. Hospital and ICU beds are our short term priorities, but they surely not our long term priorities," he said. The Government had in May announced a about Rs 21 lakh crore economic package to deal with the impact of COVID.