Plan to roll out universal basic income in right direction: ADB

NEW DELHI: The plan to roll out a universal basic income (UBI) scheme is "in the right direction" but a thorough analysis needs to be about where the funds will come from, a top

Asian Development Bank

official said on Friday as he termed farm loan waivers as a "short term measure," to tackle farm distress.


"UBI is becoming a hot topic.

ADB

advocates the direct transfer of cash to targeted sections of people," Kenichi Yokoyama, country director of Manila-based multilateral agency told a news conference and cited the example of Philippines.

But he also cautioned that all the issues need to be carefully looked into and how resources would be mobilised, how rationalisation of subsidies would be done and how inefficiencies would be tackled. Yokoyama said the basic framework for rolling out the plan such as the Aadhaar platform and bank accounts was in place.

Ahead of the 2019 general elections, the Narendra Modi government is exploring several options such as rolling out a UBI and a direct cash transfer scheme for farmers to tackle rural distress. Discussions have taken place at the highest levels to thrash out a plan to tackle rural distress and farmer woes, which have been cited as reasons for the BJP's loss in three key state polls last month.

Yokoyama said the Centre had expressed its scepticism about loan waivers and stressed that it was a short term measure to tackle farmers' distress. He cited the direct cash transfer schemes rolled out in Telangana and in Odisha as plans which can be looked at.

The ADB India country director also hoped that the government will stick to the fiscal consolidation plan that has been unveiled. "A lot of internal discussions have taken place and we have no doubt it will be implemented," Yokoyama said. The government has vowed to meet the fiscal deficit target of 3.3% of gross domestic product (GDP) in the current fiscal year despite facing a tough year in terms of revenue receipts.

He said ADB had committed a shade over $3 billion in sovereign loans to India in 2018 - the highest ever annual lending commitment - for 19 projects in transport, urban, skills, agriculture and natural resources, energy and finance sectors. The multilateral agency also achieved a record disbursement of $2.2 billion in a year.

ADB estimates the Indian economy to grow by 7.3% in 2018-19 with low inflation and reasonable current account deficit. The government expects the economy to grow by 7.2% in 2018-19.

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