Universal basic income is not a charity but a legitimate demand to put money in the hands of people who don’t have it and spur demand, instrumental in reviving the economy from the Covid-induced slump, a veteran economist said on Thursday.
“Human beings deserve to live. If the right to life is fundamental, whatever is required to sustain human lives should be constitutionally provided by the State,” said Raghabendra Chattopadhyay, who has taught at IIM Calcutta for three decades and is a visiting faculty at IIM Bodhgaya.
He was speaking at a webinar on “The COVID 19 Pandemic — Lives, Livelihood and Challenges”, organised by the postgraduate department of economics at St Xavier’s College (Autonomous), Calcutta, in collaboration with Yunus Centre Bangladesh.
Economist and IIM professor Raghabendra Chattopadhyay during the webinar Telegraph picture
Muhammad Yunus, Bangladeshi social entrepreneur who was awarded the Nobel Peace Prize in 2006 along with Grameen Bank, addressed the webinar before Chattopadhyay. Yunus had a different take on universal basic income (UBI).
When a student asked him “if the pandemic had spurred the requirement for UBI”, he said: “UBI, to me, sounds like begging. For survival, you don’t want … to depend on charity. It is a weakness of the system that people have to live on donations and alms.”
Chattopadhyay, whose areas of interest include empowerment of women, public policy and management, development and the State’s role in social sectors, contradicted the Nobel laureate.
“The UBI can help in creating demand. You give money to the poor; they will use it to buy consumables. If people don’t have money, supply is like creating inventory. There is no supply solution to a big economic crisis. Take any in the past 100 years; you cannot have a solution without demand creation,” said Chattopadhyay, also associated with the Abdul Latif Jameel Poverty Action Lab — co-founded by economists Abhijit Vinayak Banerjee and Esther Duflo.
The webinar dealt with the impact of Covid-19 on livelihood. In his keynote address, Father Dominic Savio, the principal of St Xavier’s College, said the pandemic’s impact on Indian economy had been aggravated by the “wide inequality, huge informal labour market and lack of policy and information”.
In India, as many as 41 lakh youths lost their jobs because of the pandemic, the majority of them in the construction and farm sectors, according to a report by the International Labour Organisation and the Asian Development Bank. Among the haunting images of the lockdown are those of hundreds of thousands of out-of-work migrant workers walking back home.
The Prime Minister’s “Rs 20 lakh crore” stimulus has so far proved inadequate in facilitating recovery of an economy pummelled by the pandemic.
St Xavier’s College principal Father Dominic Savio at the webinar Telegraph picture
Giving cash handouts directly to citizens to address the economic pain is being advocated by many economists and public policy experts, including former RBI governor Raghuram Rajan.
Yunus compared the global economic order as an engine that was “headed for death”, thanks to rising global warming, inequitable distribution of wealth and Artificial Intelligence.
“The Covid-19 pandemic has stopped the train which people were riding. It has also offered us a chance to think…. There is a rush to get back to the pre-Covid world. But is it worth going back to?”
Calling Yunus “a great thinker and a great dreamer”, Chattopadhyay described himself as “minnows who have to look into the immediate future”.
“We have to discuss economics as given… where one per cent population controls almost 50 per cent of the country’s wealth,” he said.
Revival of the MSME and the “so-called unorganised” sector, must for any economic revival, would require increasing demand generation, he added.
That is where UBI can be instrumental because it will make people “ready users for products from the unorganised sector”, said Chattopadhyay. “It is not giving alms to a beggar. It is an acknowledgement of the State’s responsibility towards citizens.”
