Model of UNDP Temporary Basic Income (TBI) for India, July 2020:
United Nations Development Program has given a Policy Framework for all the developing countries in July 2020. This report provides estimates for a Temporary Basic Income (TBI), a minimum guaranteed income above the poverty line, for vulnerable people in 132 developing countries. A TBI amounts to between 0.27 and 0.63 per cent of their combined GDPs, depending on the policy choice:
i. Top-ups on existing average incomes in each country up to a vulnerability threshold( up to a minimum level that is at least 70% above the poverty line in that region of the world)
ii. lump-sum transfers that are sensitive to cross-country differences in the median standard of living; or it is equivalent to half the income enjoyed by the typical citizen.
iii. lump-sum transfers that are uniform regardless of the country where people live. Under this system, the amount we simulated was US$5.50 (£4.30) a day per person, which is the typical level of the poverty line among upper middle-income countries.
Which option is best will depend on the situation. For instance, the first will only work in countries where registry systems have accurate information on what people earn. In countries where such systems are absent or weak, flat amounts according to general living standards (as in option two) or poverty lines (option three) might be better.
The total cost amounts to between US$200 billion and US$465 billion per month, depending on the policy choice. This is equivalent to between 0.27% and 0.63% of developing countries’ combined monthly GDP.
It’s a relatively moderate cost to cover such a profound shock and protect people from poverty. And providing TBI could have other positive effects as well: unconditional cash transfers can lead to people spending more money on their diet and can potentially improve health outcomes and school attendance. They can also protect people’s assets and allow them to diversify their livelihoods.
The two options calculated by UNDP are
Option (1) costs $200 billion per month, in which the TBI is equivalent to the average distance between the incomes of these people and the vulnerability thresholds.
Option (2) costs $257 billion per month, in which the TBI is sensitive to the median standard of living.
Temporary Basic income per beneficiary under option (1) and (2) monthly average for developing countries is given as $61.7 under option(1) and $ 105.5 under option (2), as monthly averages. And for South Asia $26. 3 under option(1) and $ 59.5 under option (2), as monthly averages.
|Total Cost ($Million and % of Country’s GDP) and amounts per Beneficiary under Different Scenarios for India(as Proposed by United Nations)|
|Total Monthly Cost (Million)||(1)Top Up||$18,430.5 million|
|(2)Half Median||$38,039.0 million|
|Per Beneficiary (Monthly)||(1)Top Up||$110,112.9|
|Monthly Cost (Percentage of country’s GDP)||(1)Top Up||0.23%|
Source: UNDP: Temporary Basic Income
In addition, UNDP also has suggested a debt suspension of ‘Comprehensive Debt Standstill’ for developing countries.