India is attempting the biggest universal basic income experiment in history

Elon Musk & Mark Zuckerberg are two big names that endorse the idea of a basic income.


The tiny state of Sikkim could make history very soon for hosting a massive economics experiment in providing each of its 610,000 citizens with a basic income.

This will be the largest basic income experiment ever carried out, the Washington Post reported.

A universal basic income is a routine assurance of a fixed income that the government guarantees to all its citizens, and unconditionally, through cash payments. These cash payments are aimed at replacing the dizzying array of financial assistance offered to citizens by state governments.

If there's one chance of it working somewhere, Sikkim is it, according to P.D. Rai, the only representative from Sikkim in the Indian Parliament. The state has a longer track record of successful initiatives than most other states, be it with the plastic ban, housing for all its citizens, and most recently, the first state to go completely organic and pesticide-free in agriculture.

India is attempting the biggest universal basic income experiment in history

Activists for a universal basic income install a giant poster in a public square in Geneva, Switzerland, in 2016, ahead of a referendum on the issue, which failed. Image courtesy: University of Toronto.

Sikkim may be a model state for multiple reasons but could be a terrible 'sample' for the nation's population because of its remarkably different social indices. Thirty percent of the country that lives below poverty line (BPL) is not comparable to the 8 percent of Sikkim that lives BPL. The state also has a remarkably high literacy rate of 98 percent, according to reports. The country as a whole is looking at a literacy rate closer to 78 percent.

Economists from around the world have pointed out potential flaws in the plans. While some have questioned the choice of cash instead of a food subsidy, others claim that a basic income would disincentivize work and reduce India's workforce.

While a decisive plan hasn't been shared with the public, Sikkim plans to gather the money needed for the experiment by tapping into its tourism and power sectors.

Representational image. AFP

Representational image. AFP

“In developed countries, the main purpose is to restructure or economize the existing welfare schemes, like unemployment benefits,” the University of California at Berkeley economist Pranab Bardhan told the Post of the experiment. “In low- or mid-income countries, like India, the rationale will be to address the minimum economic insecurity of a larger section of the population, not just the poorest, without touching the existing anti-poverty measures.”

Elon Musk and Mark Zuckerberg are among the big names that have endorsed the concept of a basic income, the Post points out, but as a fix to cushion the economy from manned jobs becoming increasingly automated.

However, actual experiments like the one in Sikkim have been very rare and limited in their scope. Ironic, considering the largest economic experiment of the decade is kicking off in India, a country much less wealthy than America or Britain.