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HomeCampus VoiceUniversal Basic Income may not be the best solution for Indian economy

Universal Basic Income may not be the best solution for Indian economy

Campus Voice is an initiative by ThePrint where young Indians get an opportunity to express their opinions on a prevalent issue.

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Automation is an act of promoting machinery and estimating technologies to reduce human intervention in production. It is already in use in many fields like IT automation, home automation, business process automation and there’re so many. It’s been achieved for several means including mechanical, hydraulic, electronic devices etc.

But there’s a disadvantage which can be a huge problem and will have a big societal impact—unemployment.  Experts suggest a solution named Universal Basic Income (UBI) which can be a way to feed those unemployed. I think it won’t be that easy to implement in a huge population-based country like India. Let me take you through some data to augment my argument.

The World Bank’s World Development Report 2019 shows the transparent data of how saving waste, saving material cost and upgrading the quality, accuracy and precision in technology outweighs the economic effects of the workers. Job losses are already being blamed for automation in many countries like USA, France, UK.

In the United States, 47 per cent of all current jobs have the potential to be fully automated by 2033, according to the research of Carl Benedikt Frey and Michael Osborne. According to a 2020 study in the Journal of Political Economy, automation has robust negative effects on employment and wages.”One more robot per thousand workers reduces the employment-to-population ratio by 0.2 percentage points and wages by 0.42 per cent, it states.

According to experts, paradox of automation says that the more efficient the automated system, the more crucial the human contribution of the operators. A fatal example of this was Air France Flight 447, where a failure of automation put the pilots into a manual situation they were not prepared for.  From this we all now know that everyone lauds development and technology without predicting the results.

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The UBI paradox

UBI can be understood as a basic living stipend in which all citizens of a given population regularly receive a legally stipulated and equal financial grant paid by the government without a means test. But there are roadblocks to it being a successful scheme. Inflation plays a major role in economic graph of a country. More the amount of money, lesser the value of money. So, if inflation keeps increasing, then in response the government will also have to increase the amount of basic income by years.

There are many more numerical analysis and representations on internet of results on implementing UBI. It will affect tax return and services, and work experience, and by extension, the economy. It will affect fund management and balancing. It will affect health and poverty.

UBI doesn’t distinct between deserving and undeserving. So, giving a fair and equal amount of money to both productive and unproductive will be unfair. This has also been raised as an argument among critics. So, assuming UBI as a potential solution to automation might get easy acceptance. We will have to wait and watch before making any judgement.

The author is a student at Manipal University, Jaipur. Views are personal

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