Universal Basic Income. Really?

When I chose to study economics after my intermediate exams, I used to ask few questions repeatedly to every economics student I came across. However, after a year or two, everyone was asking me the same questions. One of the constantly asked questions was, “Why doesn’t government directly transfer money in the accounts of below poverty line people and end poverty in their countries?” I had little to answer in the same way the finance minister of the de-facto government* of Indian controlled Kashmir has.

Like Mr Drabu’s earlier designation of “Political Sufi” about his Patron, Late Mufti Muhammad Syed, was misplaced, his big fat economic phrase, “Universal Basic Income” (The European Concept) is evenly placed to emphasize upon his supposedly unconventional thinking.

The problem with the “Political Sufi” phrase is that it suggests as if something new has happened in the Sufi order, as if every Sufi was apolitical, or for that matter Tasswuf and politics are poles apart and only Shakespearean Finance minister could discern it. Just because somebody is a Syed doesn’t make him/her a sufi of any order, let alone the Qubravi Syeds of Kashmir whose legitimacy was time and again questioned throughout the history. Tassawuf believes in inclusive justice and among the early founders of Tassawuf was Abrahim Ibn Adham (D 165 AH), who left his kingship of Balkh and pursued Tassawuf in order to give everyone justice. He was martyred in the battle field near Byzantine border not in a hospital or his Hujra. His teacher,Hasan al Basri (D 80 AH), opposed the inherited khilafah of Ummayads. In the revolt led by Ibn al- Ash’ath, he actively participated and joined his camp.

The other comment that he made in his budget speech is nothing but an appropriate phrase to suit an administrative trend. The speech highlighted, “At the moment we are spending around Rs. 2,000 crore on social welfare through a plethora of schemes. I would want to create a 27 social security fund and provide a “Universal Basic Income” to all those living “Below the Poverty Line” through a direct beneficiary transfer system. Not only will it eliminate all the leakages, the cost of delivery will also be reduced dramatically.”

The second part of the sentence in which the “Universal Basic Income” is mentioned refutes the “universality” of the first part as it counts only those “living below poverty line”. In universal basic income (UBI) system, all of the population is considered as “below poverty line” while only 21.63 per cent of the Kashmiris live, as per Indian designed 2007-08 survey, below poverty line index. Moreover, the problem with the UBI is that it scrapes all the subsidies particularly on health and education and encourages direct cash transfers to the masses, resulting in significant cost rise and thus less purchasing power to the poor.

Already, the average inflation in J&K from April to December 2014-15 [CPI-IW] was registered at 7.9 per cent, well above India’s 6.2 per cent inflation during the review period. Moreover, unemployment was recorded 4.9 per cent during the period July, 2009 to June, 2012 i.e. (66th & 68th Round of NSS respectively) which is still higher than the unemployment rate of the occupier, 2.7 per cent. Perhaps, Drabu still believes in the obsolete economics that says that the relationship between inflation (that only talks about less than 4-5 per cent inflation in a developing economy) and unemployment is inverse. The theory was extensively criticized before it was finally laid to rest with the empirical evidence showing opposite results. Drabu is informed, he just doesn’t care as long as he can manage an out of the box phrase out of it.He won’t care about the inequality that follows because he is not going to do anything at all in the first place. This all fuss is a word game and an attempt to polish his intellectual credentials.

What Drabu, however, proposes is a targeted cash transfer and not Universal Basic Income in the bank accounts of Below Poverty Line people. UBI promises a minimum income guarantee to everybody over and above the social sector benefits. With the cash transfers, bankers will get more power to subjugate the BPLs, earlier it was other employees of Control, and, yes, delivery costs will be reduced. But these transfers will be on the expense of the subsidies the poor used to get earlier.

The Kashmiri metaphor for all this chaos is Tilwaen Daand, a bull who is blindfolded and tied to a pole in the middle of the ground. Underneath his feet, lie dry mustard which he crushes for the whole day. Bull thinks that he has come across the whole earth during the day. But, to his disguise, at the end of the day, he is at the same place he was in the morning. Mustard goes to the master, though.

*) As per the UN resolution passed in April 1951, elections would be held to Govern the people of the disputed territory which would act as a de facto government till the plebiscite.