India is mulling a new way to help lower the poverty rate in the country — giving everyone free money.
According to a report by The Wall Street Journal, the Ministry of Finance released its annual survey of the economy, and it looks at ways the country can swap out welfare programs with a universal basic income or offer a stipend paid to each adult and child in the country, regardless of their economic status. The survey said giving citizens enough money to cover the basic necessities would “promote social justice … and empower the poor to make their own economic choices.” It would also be easier to run than the current programs, which, WSJ noted, have a lot of waste, corruption and abuse attached to them. Arvind Subramanian, the ministry’s chief economic adviser and lead author of the economic survey, told reporters the idea is “ripe for further deliberation and discussion and not necessarily for immediate implementation.”
In India, the idea is appealing to many because the welfare programs are weak and take the form of subsidies paid to sellers of grain, fuel, fertilizer and other essentials, noted WSJ. By giving money to everyone and paying directly into bank accounts, it would enable India to get rid of a big administrative machinery that’s needed to give the poor discounts and to employ them for road building, noted the report. WSJ pointed to one estimate that found that one-third of the grain that is put aside for the food welfare program in India never reached the beneficiaries in 2012. Meanwhile, the paper said payments under India’s rural work program are often delayed.