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1. PRESENTED BY SEMINAR LEADER
Praveen Kumar Dr.O.P. Singh
21081 Dr. Murlikrishnan

2. POVERTY
AUTOMATION
EXISTING PROBLEMS

4. SITUATION IN DEVELOPING WORLD
Source-http://futurism.com/image/universal-basic-income /

5. Says that nearly 22 percent of the population lives below
poverty line in India. (Tendulkar committee report, 2011-12).
RATE OF UNEMPLOYMENT
POVERTY
Source-CIA world fact book

6.  Provision of
 Through provision of
 Through

7. SUBSIDIES AS AN ALTERNATIVE

8. . Attitude of
government
. Problem of
identifying targets
. Lack of
Responsibility and
Accountability
.Too many
schemes
. Misuse of Funds
. Delay in Funds

9. Only one scheme for whole India
No need to find target population
It is leakage free
Involves less policy formulation
UNIVERSAL BASIC INCOME
AS A SOLUTION

10. is defined as a periodic cash payment unconditionally granted to
all on an individual basis, without means-test or work
requirement.

11. History of universal basic income
1st to introduce idea about basic income in 1916
In 1526 a detailed scheme on basic income was introduced by
Proposed the most distinctive model on UBI in 1797
Thomas More
Johannes L. Vives
Thomas Pain
Richard Nixon
In 1969 an income guarantee plan in USA was presented by
Later on debates on UBI is
going on in many countries.

12. DIMENSIONS OF
UBI
Universality
Individuality
Modality
Uniformity
Duration
Conditionality

13. People earning below a certain threshold
receive a wage subsidy or wage supplement,
from the government instead of paying taxes.
Basic income guarantee - UBG is a guaranteed
income with no reductions in the paid amounts
no matter how much you earn.
Earned Income Tax Credit - Refundable tax
credit aimed at low-wage workers.
TYPES OF UNIVERSAL BASIC INCOME

14. Reduce inequality
Increase purchasing power
Increase productivityIncrease income
Eliminate poverty
Increase efficiency
ADVANTAGES OF UBI

15. FAVOUR AGAINST
 Poverty and vulnerability reduction  Conspicuous spending
 Choice  Moral hazard (reduction in labor
supply)
 Better targeting of poor  Fiscal cost given political economy of
exit
 Psychological benefits  Political economy of universality –
ideas for self-exclusion
 Administrative efficiency  Exposure to market risks (cash vs.
food)
ARGUMENTS GIVEN FOR UBI

16.  ES advocated for the concept of Universal Basic Income (UBI) as
an alternative to the various social welfare schemes in an effort to
reduce poverty.
 It suggests that a more efficient way to help the poor will be to
provide them resources directly, through a UBI.
 It will be an efficient substitute for a plethora of existing welfare
schemes and subsidies.

17.  Because unconditional cash transfer gives the beneficiary a
choice to use that money in any way.
 Bring in administrative efficiency as a direct cash transfer
through JAM (Jan Dhan-Aadhar-Mobile) platform.
 More efficient as compared to the “existing welfare schemes
which are riddled with misallocation, leakages and exclusion of
the poor.
 help to achieve considerable gains in terms of bureaucratic costs
and time by replacing many of these with a UBI
WHY ECONOMIC SURVEY SAYS SO ?

19.  Research indicates that in order to implement the UBI, existing
welfare programs would have to be terminated to free up
resources.
 2 large schemes of GOI, Food Subsidy or Public Distribution
System (PDS) and the MGNREGA which would have to be
stopped for the UBI to be implemented.
 Current social welfare schemes cost India about 3.7% of GDP
but UBI is expected to cost 4.9% of GDP.

20. Source-ICE 360 survey

21. OPINION OF PEOPLE TOWARDS UBI

22.  Guaranteed income without any work is likely to affect labor
mobility and participation.
 Likely to increase wages, as has been witnessed after the
implementation of MNREGA .
 Higher wages without a commensurate increase in productivity
will affect India’s competitiveness.
 Also have longer-term implications in terms of higher inflation
and lower growth
CAN UBI CREATE DISTORTIONS IN THE LABOUR
MARKET ?

23.  Difficult to phase out food-related
subsidies
 Lack of co-ordination between state and
central governments
WHAT ARE THE CHALLENGES IN IMPLEMENTATION OF UBI ?

25. RYTHU BANDHU SCHEME
 Announced by K. Chandrashekhar Rao on 10 May 2018.
 Budget allocation of ₹12,000 crores given in 2018-19.
 Offers a financial help of ₹8,000 per year to each farmer (two
crops) through direct benefit transfer.
 No cap on the number of acres
THE SCHEME
 Also known as - Farmers’ Investment Support Scheme

26. TELANGANA
 Total farming land - 1.43 crore acres
 Total number of farmers -58.33 lakh
Agricultural land holdings :-

27. OBJECTIVE
To support farmer’s investment for two crops a year.
1. Take care of initial investment of every farmer
2. Relieves Farmers from the debt burden
3. Improved confidence in farming
4. Improved socio-economic status of farmers.

28. DRAWBACKS
 It does not include the tenants who are the actual
cultivators of the land (11 millions).
 Out of the total suicides since state’s formation in 2014,
about 60% were tenant farmers.
CONCLUSION
 Rythu Bandhu Scheme can perform more better if it
also includes the tenant farmers .

29. THE SCHEME
 Announced by Odisha cabinet
 Provides an amount of Rs. 10,000 per family @ Rs. 5,000 each
for Kharif and Rabi seasons for farming.
 Included component of livelihood support for landless
households particularly SC/ST households.
 Allotted Rs. 10000 crore for this scheme.

30.  Assistance is given for five crop seasons spanning three years
from 2018-19 to 2021-22, for comprehensive coverage.
 ₹12,500 is given to10 lakh landless households for activities
• goat rearing units
• mini layer units
• duck units
• fishery kits for fishermen
• mushroom cultivation
• bee keeping
Other features

31. Objective
 To accelerate agricultural prosperity
and to reduce poverty in the State.
 Life insurance cover of ₹2 lakh
 Additional personal accident cover of ₹2 lakh
 About 57 lakh households covered as beneficiary
Other benefits
Beneficiaries -
 Identified and selected by Gram panchayats

32.  This scheme will make a direct attack on poverty by way
of massive investment in the agriculture sector.
Conclusion
Significance of scheme
 92% cultivators are covered under the scheme.
 Complete independence to take up interventions as per their
needs by farmers.

33. Introduction
Announced by- FM Piyush Goyal in interim union budget 2019 on 1
Feb. 2019
This Scheme aims to provide a financial assistance of 6000 per
year to poor farmers of country.
Other name – PM KISAN

34. Features
 Rs. 75000 Crore has been allocated in the Union Budget 2019-20
 Completely funded by the Government of India
 Amount gets transferred via DBT.
 First Installment of Rs. 2000 will be transferred in account of
the farmers by 31st March 2019

35. Beneficiaries
 Farmer with less than 18 years old children & with less than 2
hectare land (5 Acre)
 Only those whose name appears in the land records as on 1
February 2019 are eligible.

36. What’s Good?
 Small & marginal farmers will get financial help
 Direct Transfer Service Eliminates Chances of Corruption
What’s not Good ?
 Practically, Rs. 500 Per Month Doesn’t make much difference
Conclusion
 This scheme will bring prosperity and confidence among farmer
community.

37. CONCLUSION TO UBI
 Despite challenges to UBI, A transparent and safe
financial architecture that is accessible to all is important
for the success of the UBI.
 As Economic Survey states, UBI is a powerful idea whose
time even if not ripe for implementation is ripe for serious
discussion.

38.  India needs rationalization of subsidies, better targeting and
operational efficiency.
 Needs to move to cash transfers at an accelerated pace with the
use of Jan-Dhan, Aadhaar and Mobile
 This will help reduce costs and spare resources for capital
spending to augment growth
 As history has shown, the best way to pull people out of poverty
is sustained higher growth of economy.

39. Farmers are in very dire state due to farm
distress.
Condition of farmers

40. POSSIBLE CAUSES OF FARM DISTRESS
 Unfinished agenda in land reform
 Quantity and quality of water
 Technology fatigue
 Access, adequacy and timeliness of institutional credit
 Opportunities for assured and remunerative marketing
 Adverse meteorological factors aggravate these problems

41.  Providing food grains to the PDS
Focal point of NAPP
 Inducing adoption of new technology
 Ensuring reasonable price for food grains

42. Toward ensuring the reasonable price for food
grains we focus towards Minimum Support Price

43. Minimum Support Price is the price at which government
purchases crops from the farmers, whatever may be the market
price for the crops to prevent farmers from price fluctuations.

44. HISTORICAL PERSPECTIVE OF MSP
 Till the mid 970s, Government announced two types of
administered prices :
• Minimum Support Prices (MSP)
• Procurement Prices
 Upto 1970s MSP served as the floor prices
 Procurement prices were only for Kharif and Rabi cereals.
 Normally procurement price was lower than the open market
price and higher than the MSP
 This policy of prices continued up to 1973-74 for paddy.
 For wheat, discontinued in 1969 and revived in 1974-75 for one year
only.
 In 1975-76, the present system was evolved in which only one set of
prices was announced for kharif and rabi crops for maintaining
buffer stock operations.

45. OBJECTIVES OF MSP
 To ensure remunerative prices to the growers
 To bring a balanced realization of sufficient food
production and consumption needs
 Improve economic access of food to people
 To evolve a production as per needs of the economy

46. IMPORTANCE OF MSP
 Protects farmers from any sharp fall in the market prices of a
commodity.
 Helps farmers make informed decision on the crops.
 Tool to achieve food security.
 Provides security to farmers from the risk of crop failure and less
production.
 Tool to incentivize production of specific food crops which is
short in supply.
 Enhance purchasing capacity of farmers.
 Motivates farmers to grow targeted crops.

47. DETERMINANTS OF MSP
While determining the price for different crops following things are
kept for consideration
1. demand and supply.
2. cost of production
3. price trends in market
4. inter-crop price parity
5. terms of trade between agriculture and non-agriculture
6. likely implications of MSP on consumers of that product.

48. Determines MSP
based on the recommendations of
WHO DECLARES AND WHO PREPARES IT ?

49. HOW MSP IS DECIDED FOR EACH CROP
CACP estimates the cost of production for crops using three
definitions.
1st is A2- includes input such as seeds, fertilizers,
pesticides, and wages for agricultural workers. (actual amt.
spend by farmer on growing a crop)
2nd is A2+FL- includes the actual input costs plus the
implied economic value of family members working on the
farm
3rd is C2 –includes A2+FL and the value of capital
assets, including rent and interest on the land.

50. MSP is announced at the beginning of the
sowing season
Crops covered under MSP- 25

51.  To distribute ceiling-surplus
& waste land among farmers.
 To prevent diversion of prime agricultural land and forest to
corporate sector for non-agricultural purposes.
 To fix MSP at 50 per cent above the cost of production
classified as C2 by CACP
WHAT SWAMINATHAN REPORT SUGGESTS

52. DIFFERENT ADMINISTERED PRICES
•Price at which govt. procures commodities from farmers to maintain
buffer stock and for PDS.
Procurement
price
•Is an upper price level of a commodity fixed, to protect consumer from
unwanted price rise.Ceiling price
• Is fixed based on cost of production, to protect farmers
from price fall during market glut.
Minimum
Support price
• Price at which the commodities are made available to the
consumer at fair price shops.Issue price
•Is procurement system which makes it obligatory for the farmers and
traders to sell a special quantity to govt. at procurement price.Levy prices

53.  To ensure and encourage the production of such crops
(crops which are vital for food security) the government
follows a much liberal procurement policy known as open
ended MSP.
 With no procurement target.
 Govt. procurement agencies buy whatever is offered by
the farmers for sale at MSP.
 Decided only for rice and wheat as per their importance.
WHAT IS OPEN ENDED
MSP?

54. IMPACT ON THE FARMERS
 Increase risk bearing ability
 Increase confidence in farming
 Indirectly develop trust in govt.
 Increase purchasing power
 Can avoid distress sell

55. VARIOUS ISSUE AROUND MSP
 The Crop production is still unviable despite
of so many years of crop production
 MSPs have unequal access
 Effects of Inflation
 Disadvantages of procurement
 Excess storage
 Issues in WTO

56. ADVANTAGES DISADVANTAGES
 Effect on small and
medium scale farmers
 Killing of competition
 Control inflation by
controlling price
 Surety of minimum prices
 Control crops short in supply
 Fair price shops-public
distribution system
 Load on banks

57.  Recent budget initiatives
 WTO negotiations
 Priority based procurement

58. Govt. declared, hike in MSP for kharif crops to be 1.5 times
the production cost.
Speculations are rife that the government has announced it above
A2 and A2+FL costs.
But demands are to consider the cost of production- C2 as
recommended by Swaminathan report.
Experts also said that govt. can not consider C2 as the cost of
production because it will increase the burden of money on
government.

60.  Revision of MSP and its provisions are required
 Diversification of MSP towards other crops like pulses, fruits
and vegetables must be done.
 Pre and post planning for the procurement at every location so
that farmers are aware of the activities planned and there are no
delays or gaps in the system.

61.  The monitoring at every phase for the efficiency of the process
and accountability of the people involved in its implementation.
 The ambitious projects like e-NAM, doubling farmer’s income by
2022, price stabilization fund, implementation of Swaminathan is
required.

62. References :-
 Anonymous, (2019).Commission for Agricultural Cost and Prices, Government of India, Ministry of Agriculture
and Farmers Welfare. https://cacp.dacnet.nic.in/content.aspx?pid=62.
 Deshpande, R. S., & Naika, T. R. (2002). Impact of minimum support prices on agricultural economy: a study in
Karnataka. Bangalore: Institute of Economic and Social Change. Available online at www. isec.ac.in/MSP%
20PROJECT. Pdf.
 De Wispelaere, J., & Stirton, L. (2004). The many faces of universal basic income. The Political Quarterly, 75(3),
266-274.
 Dreze, J. (2016). “Decoding the Universal Basic Income”, NDTV, (http://www.ndtv.com/Opinion/decoding-
universal-basic-income-for-india-1649293? pfrom=home-lateststories)
 Gandhi, M. Universal Basic Income: A Conversation With and Within the Mahatma.
 Niti Ayog, (2016).Development Evaluation And Monitoring Office, Government Of India, Evaluation report on
efficacy of minimum support price on farmers, PEO Report no.231, pp 50-67
 Survarna,L., Rohilla,A.K., Yadav,A.,Thakur,S.,(June 2008). Minimum Support Price to Farmers in India., Popular
Kheti., Volume 6, issue 2., Available online at www.popularkheti.com