An income for everyone, can we afford it?

Former Finance Minister of Greece, Yanis Varoufakis is an ardent supporter of Universal Basic Income, or UBI, in which every citizen is given a certain amount of money by the government. There are many objections to such an idea. People will stop working, labor costs will go up, people will stop fighting for their rights and the rich will not have to explain how they acquired their wealth. But, how will governments finance such a scheme? Varoufakis suggests that a portion of shares offered for sale at Initial Public Offerings, by new companies going public, should be deposited in a central fund, which will distribute dividends paid by these companies to all citizens. The recent economic survey by the Chief Economist, Arvind Subaramanian suggested a UBI in India to replace all the social schemes that exist at present. But it is not really universal. He recommends Rs 7,620 every year to 75% of the population. This will apparently bring down absolute poverty from 22% to less than 0.5%. Anantha Nageswaran thought that UBI would be a bad idea because people will want the extra money on top of all the handouts they are getting at the moment and it will be no different from distributing free television sets and laptops to win elections. The fiscal deficit will go out of control. G Sampath is also against UBI and has written an angry article condemning it as a sly way to cheat the poor of their deserved rights. "The growing chorus for a universal basic income is a ruse to eliminate or role back significantly the public distribution system and signature welfare programmes," he writes. He sees a deep conspiracy to deprive the poor. "The most eloquent advocates of UBI today are free-market enthusiasts -- the same lot branded as new-liberals for their advocacy of deregulation, privatisation, and cuts in welfare spending," he fulminates. Who are these villains? Milton Friedman is the guru, followed by Tesla owner, Elon Musk and Facebook co-founder, Chris Hughes. Saksham Khosla cites studies, showing that giving money to the poor does not increase bad behavior, like alcoholism, but increases levels of nutrition, the greatest benefits enjoyed by the most vulnerable. However, 4 authors studied the MGNREGA scheme, which most closely resembles UBI in India, in which the rural poor are paid for 100 days of fictitious employment every year. The authors found that it reduces the availability of labor in local factories as people rejected working hard at minimum wage when they can get much greater amounts for doing nothing. Professor Pulapre Balakrishnan sees nothing wrong in the government borrowing, provided it is used for building public assets. He thinks UBI is a bad idea because it gives the government an excuse to do nothing. India's GDP per capita was a paltry $1750.60 in 2015. Just reduce the number of people and it will jump. Easy really.