MP, Punjab, Tamil Nadu—Universal Income Scheme catching with states

Universal Basic Income Scheme or a scheme to deposit ₹1,000 in the bank accounts of women each month is slowly catching up in the country. After Madhya Pradesh and Punjab, Tamil Nadu has become the latest state to implement the scheme to a targeted section of women from poorer walks of life.

Congress in Karnataka has gone one step ahead in implementing the scheme, it has promised to provide ₹2,000 per month to women if it wins the assembly elections to be held in May.

The concept of Universal Basic Income was widely discussed in the run-up to the 2019 parliamentary elections when the Congress party made it part of its poll manifesto. It talked of a scheme termed Nyay, where it would give minimum income support to 5 crore families constituting the poorest 20% of the population. This remained a dream, however, since Congress was defeated in the 2019 elections.

Universal Basic Income Scheme, though referred to with different names in different states, has been implemented in various countries, and a hot topic of discussion in many more. As of early 2022, no countries had implemented a truly universal basic income model, though a few had launched UBI-like programmes specifically designed to aid the neediest individuals. Universal basic income models differ in their sources of funding, amounts distributed, and other dimensions as per Basic Income Earth Network (BEIN).

The Covid-19 lockdown was the spark that ignited similar schemes all across the country and over the world. One such example was the Madhya Pradesh government, which named the scheme as Mukhyamantri Ladli Bahna Yojana. Under this scheme, each woman will be given ₹1000 per month. Women in the age group of 23 to 60 years will be eligible for this scheme. The benefit of this scheme will be given only to women whose annual family income is less than ₹2.5 lakh or who have less than five acres of land.

Under the scheme, ₹1,000 per month will be deposited in the account of native women in the age group of 23 to 60 years. Applications will be filled out for the scheme from March 25 to April 30 and the distribution of money will start on June 10.

The scheme is launched in the state with the goal of enhancing women's economic independence, improving their health and nutrition status and expanding their influence over family decisions, said state chief minister Shivraj Singh Chouhan.

In Punjab, any women beneficiary can apply for ₹1,000 per month through offline mode only. It must be noted that there is neither any online process nor any dedicated portal to fill application form for the Punjab Women ₹1000 Scheme.

However, Punjab's ₹1000 scheme for women remains an announcement on paper (till date) as one of the promises made by the Aam Aadmi Party in the run to assembly elections in the state.

In the recent Tamil Nadu budget, the state's finance minister PTR Palanivel Thiagarajan has allocated ₹7,000 crore for implementing the scheme from September 15, which is also the birth anniversary of former chief minister C Annadurai.

Unlike the previous welfare scheme implemented in the state, the latest income scheme for women will not be for all women and only for a targeted section of women. As per the announcement made by the government, road-side women vendors, fisherwomen, women who are construction labourers, workers in minor commercial establishments, and domestic helps employed in multiple households were among the sections of women who would benefit from the monthly income scheme. About one crore women across Tamil Nadu would benefit from the scheme and the monthly aid of ₹1,000 would be deposited to deserving women directly in their bank accounts.

Chief minister MK Stalin said the two primary objectives of the scheme were to recognise the life-long relentless selfless work of women and to eradicate poverty by complementing their livelihood with an annual aid of ₹12,000 and further to ensure their self-respect and improve their standard of living in the society.

The announcement is based on the promise made by DMK in its manifesto during the 2021 assembly elections. As DMK won in the elections, opposition parties were asking both inside and outside the assembly to implement this promise. Incidentally it was actor Kamal Hassan's party Makkal Needhi Maiam which first made the announcement on the eve of the elections which was then adopted by other political parties as part of their manifestos.

Tamil Nadu has several welfare schemes and the subsidies to these schemes are on the rise. There is also a revenue deficit to the extent of ₹30,000 crore. But the good news is that the revenue deficit has been declining and compared to last year's budget and revised budget, it has declined by ₹30,000 crore and Thiagarajan is confident of wiping off the deficit in the revenue account in the next few years.

"Due to our previous experience in providing money to people during Covid times, we have decided to deposit ₹1,000 directly in the bank accounts of women who will benefit. This will prevent any corruption and also prevent any leak," said Thiagarajan. He said the new scheme will not be for all women and very soon the government will come out with details as to who all can benefit.

Economic experts feel that only those states whose finances are positive must go for this scheme as this is a recurring expenditure and the burden will last forever.

"Cash transfer to targeted women is good as it puts money directly in the hands of women and this provides economic liberty to them," said Madras School of Economics director KR Shanmugam.

He said the states must not have a deficit in their revenue account. "Implementing the income scheme needs the states to have surplus in their revenue account. If the state government borrows to implement the scheme, then the finances of the state are going to go for a toss," said Shanmugam.

In the past four decades, many countries including Finland, Canada, the United States, and Brazil have discussed and debated UBI models. Many governments and private organisations have gone on to implement pilot programmes to determine the practical cost of universal basic income, as well as its effectiveness in fighting poverty and its positive effects, said BEIN.

Basic Income European Network (BIEN), founded in 1986, is an organisation established to serve as a link between all individuals and groups interested in Basic Income and to foster informed discussion on this topic throughout the world. In 2006, BIEN became the Basic Income Earth Network. The group consists primarily of persons from academia, students and social policy practitioners who foster evidence based research and debate about the same.