DIRECTIONS: Read the following passage and answer the questions.

There can be no dispute that India needs to do much better to improve overall human development, in which it continues to be compared with countries in Sub-Saharan Africa. Benefits of India’s economic growth must trickle down much faster to people at the bottom of the pyramid: to poorer farmers, landless rural labour, and hundreds of millions of workers living on the edge in low-paying, ‘flexible’ forms of employment with no social security. Economists seem to be offering three solutions to the economy’s structural problems. One, that there is no problem. 

Two, more privatisation. And, three, a universal basic income (UBI) to be provided by the state.

Many economists are juggling with statistics to prove that the Indian economy is doing quite well. It is providing enough jobs, they say. And, statistically, poverty has reduced a lot. However, even these economists admit that a lot more must be done to improve education and health care, and to address the persistent informality and small scale of enterprises that are providing most of the employment in the country. An ideological solution, accompanied with evidence that the government is unable to provide them, is more privatisation of public services. As U.S. President Ronald Reagan said, government   is not the solution, it is the problem. However, the private sector is structurally not designed to provide affordable public services equitably. Milton Friedman, who too is often cited, said, the business of business must be only business.  Businesses must be run with a profit motive. They cannot take on the burden of subsidising citizens who cannot pay for their services. Structural forces within the global economy have been driving down wages and creating insecure employment while increasing the mobility of capital and increasing incomes from ownership of capital. Thomas Piketty and Oxfam have also drawn attention to increasing economic inequalities around the world. ‘Industry 4.0’, which has not yet spread too far, is expected to worsen these problems. An economic consequence of declining growth of wage incomes will be reduction of consumption. This will create problems for owners of capital and automated Industry 4.0 production systems. For, who will buy all the material and services that these systems will produce? Therefore, the UBI has appeared as a silver bullet solution. It will be an income provided to everybody by the very state that the capitalists say should get out of their way, and to whom they are unwilling to pay more taxes.

The beauty of a ‘universal’ basic income, its proponents say, is that it avoids messy political questions about who deserves assistance. It also side-steps the challenge of actually providing the services required: education, health, food, etc. Just give the people cash: let them buy what they need. However, if the cash will not provide citizens with good quality and affordable education and health, because neither the government nor the private sector is able or willing to, this will not solve the basic human development problems that must be solved.

Some economists who were proponents of UBI, such as Arvind Subramanian, the former Chief Economic Adviser to the Government, have begun to dilute their simplistic concept of UBI to make it financially and politically feasible. They propose a QUBRI (quasi- universal basic rural income), targeted only at poor people in the rural areas. Their scheme is no longer universal. First, it will exclude the not-so-poor in rural areas as morally it should. Political questions about who should be included will have to be addressed.  Second, it will not cover the masses of urban poor working for low and uncertain wages. Therefore, some other schemes will have to be drawn up for the urban sector, and entitlement and  measurement  issues will have to be addressed for these schemes too. All the schemes, rural and urban, could be cash transfer schemes, which Aadhar and the digitisation of financial services will facilitate. However, this still begs the question about how to provide good quality public services for people to buy.

A simplistic UBI will not solve the fundamental problems of the economy.  An unavoidable solution to fix India’s fundamental problems is the strengthening of institutions of the state to deliver the services the state must (public safety, justice, and basic education and health), which should be available to all citizens regardless of their ability to pay for them. The institutions of the state must be strengthened also to regulate delivery of services by the private sector and ensure fair competition in the market. The building of state institutions, to deliver and to regulate, will require stronger management, administrative, and political capabilities, not better economists.

As per the passage, which of the following statements about QUBRI is/are not correct?

1. QUBRI stands for quasi-universal basic rural income.

2. It was proposed by Arvind Subramanian.

3. It is targeted only at poor people in the rural areas.