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The Times of India
The Times of India
National
TNN

Go for universal basic income, says EAC-commissioned study

NEW DELHI: The government must allocate a bigger percentage of expenditure towards social services and the social sector to make the most-vulnerable population resilient to sudden shocks and stop their descent into poverty, a study commissioned by the economic advisory council (EAC) to the PM has said.

It also backed universal basic income to reduce the income gap as well as devising an urban MGNREGA to rehabilitate surplus labour. “Raising minimum income and introducing universal basic income are some of the recommendations that can reduce the income gap and equal distribution of earnings in the labour market,” according to the report prepared by the Institute of Competitiveness.

It said that looking at the difference between labour force participation rates in rural and urban areas, the urban equivalent of schemes such as MGNREGS that are demand-based and offer guaranteed employment should be introduced so that the surplus-labour is rehabilitated.

“To reduce poverty and enhance employment, since May 2014, Union government has introduced a variety of measures interpreting inclusion as the provision of basic necessities, measures that have enabled India to withstand the shock of the Covid-19 pandemic better,” said Bibek Debroy, chairman of the EAC.

Stating that the most important aspect of measuring poverty in a multidimensional context requires mapping the mobility in and out of poverty, the report recommended setting up airtight slabs that make class-based distinctions clear to trace movement within a class and in and out of the class. It said this will help define the middle-class income share and target beneficiaries of social protection schemes that constitute the lower-middle-class, lower-class, and those below the poverty line.

The report said equitable access to education and creation of more jobs with long term growth are vital for upward mobility among the poor. The government should also encourage regular exercises like the Foundational Learning and Numeracy Index and Ease of living Index for the purpose of stocktaking of the extent of vulnerability among households and how to promote their overall well-being, the report said.

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