Close on the heels of the United States (US) and the United Kingdom (UK) announcing measures to protect incomes of vulnerable households through cash transfers and other fiscal measures, the Indian Network for Basic Income (INBI), an advocacy group working in the area of basic income transfers, has asked the Central Government to consider an emergency basic income (EBI) transfer scheme for population engaged to the informal sector.

In a representation to the recently set up Task Force on economic response to COVID-19 chaired by Finance Minister Nirmala Sitharaman, INBI, which is an affiliate of the London-based Basic Income Earth Network, has recommended that every individual above the age of 14 years should be given EBI of Rs 4,260 per month for at least six months and every child who is under 14 years of age should be given Rs 2,130 per month. Such transfer would ensure that a household of two adults and two children will receive a cash transfer of Rs 12,780 per month. Many of these households are likely to be adversely hit with job and income losses due to the economic downturn caused by the COVID-19 pandemic.

Sarath Davala, who is the coordinator of INBI as well as Vice-Chair Basic Income Earth Network, explained that level of income transfer would help the affected households to survive the economic disruption and pain caused to their lives. That level of transfer, however, will be much lower than the average income of the households engaged in the informal sector, Davala estimated.

In the representation to the task force, INBI has said that the EBI should be completely unconditional and should be given without affecting or altering any welfare benefit that the recipient is currently receiving. It has also asked that banks be directed not to adjust these transfers against outstanding payment of loan or interest.

Explaining the rationale for the amount sought as EBI, Davala said that it should be linked to the International Poverty Line of daily per capita expenditure of $1.90 rather than the Indian poverty line that had not been revised in more than a decade and was estimated on the basis of per capita consumer expenditure.

INBI has also suggested that the Government may use the existing database of public distribution system which covers a large number of the rural and urban population in the informal sector for making the EBI transfers. Additionally, Samgara Shiksha Scheme data, where it is available and updated, can also be used. Davala explained that about 60-70 per cent of the population are in the PDS database and that makes it’s a robust database for rolling out income transfer.

For others who need income support and might not be in the PDS database, such as the population of transgenders and migrant workers, the government could consider EBI though online systems, the advocacy body has said.

India’s informal economy has about 50 crore working persons and would be among the most affected by the COVID-19 related shutdowns.

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