The Finance Ministry’s economic survey estimated that a modest sum of $4 per person per month could reduce India’s poverty level from 22 percent at present to seven percent. The cost would be a mere two percent of GDP, or $42 billion, which is approximately the same amount the government spends in total on food, fuel, and fertilizer subsidies.
Compared to other social programs, universal basic income would also be simpler to implement in that it would be granted based on only one condition: Indian citizenship. Such an approach minimizes all the distortions, such as targeting based on income and other factors, and maximizes efficiency. This means that although a payment of few thousand rupees will have very little impact on the wealthy, the same payment to a very poor family would substantially improve their welfare.
Why India Is Ready for a Universal Basic Income