Universal Basic Income
What Is Universal Basic Income?
- A basic income is a regular, periodic cash payment delivered unconditionally to all citizens on an individual basis, without the requirement of work or willingness to work.
- In other words , UBI in its true sense would entail the provision of an unconditional fixed amount to every citizen in a country.
- The intention behind the payment is to provide enough to cover the basic cost of living and provide financial security.
| The BIEN (Basic Income Earth Network) is a network of academicians advocating for UBI to all. It characterises the basic income in five divisions — Periodic (being paid at regular intervals, not lump sum), cash payment (not in kind or vouchers, leaving it on the recipient to spend it as they like), individual (not to households or families), universal (for all), and unconditional (irrespective of income or prospects of job). |
UBI in India
- The idea of UBI is not new but in the past few years, it has resurfaced globally in a very big way as a means of redistributing income. Several experiments/pilots are being currently run across the world.
- The Universal Basic Income, implementation of which has repeatedly been debated in India, seeks to alleviate poverty by providing a basic income to all citizens of a particular state or geographical area, irrespective of their income, social standing, or employment status.
- The idea behind a basic income is that all are entitled to a reasonable income, notwithstanding their contribution to the economy.
Global precedents:
- Several governments have tried out UBI policies.
- Finland recently concluded a two-year experiment on its effects on unemployed citizens, which commenced in January 2017.
- Earlier, the government of Ontario, Canada, had announced a plan to test a kind of unconditional income guarantee, and enrolled participants in three areas of the province for a guaranteed income for up to three years.
- Some cities in the Netherlands have launched municipal-level trials. Barcelona in Spain has tested several potential changes to its anti-poverty programmes, including unconditional cash payments.
Rationale underlying the UBI
- India has depended on subsidies and transfer payments to help the poor. More than 950 programmes sponsored by the central government account for five per cent of gross domestic product (GDP) by budget allocation. Most of these programmes are small, fragmented and plagued by administrative leakages.
- India already has a targeted public assistance programme structure encompassing needs from neonatal care, and maternal and infant nutrition to schooling, programmes for the working poor ,old age care, for Farmers etc:
Few Examples:
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- But only a few, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), have shown promise but, in the aggregate, there has been extensive misallocation of funds across districts, with poor districts suffering from low levels of state capacity in administering these schemes.
- Many of these programmes fail to reach the poor. Replacing these inefficient subsidies with cash transfers would ensure, at the very least, that the poor are getting the intended monetary benefit to empower recipients. Cash grants give choices to the poor.
Benefits of UBI
- Fights Poverty and vulnerability: Poverty and vulnerability will be reduced and also It increases equality among citizens as envisaged in our Directive Principles of State Policy (DPSP).
- Better targeting of the poor: As all individuals are targeted, exclusion error (poor being left out) is zero though inclusion error (rich gaining access to the scheme) is 60 percent.
- Psychological benefits: A guaranteed income will reduce the pressures of finding a basic living on a daily basis.
- Ending abuse: Those who suffer domestic abuse, mainly women, become trapped in violent situations because they don’t have the means to leave them.
- Administrative efficiency: A UBI in place of a plethora of separate government schemes will reduce the administrative burden on the state.
Why in News?
- In its report on human rights in India, the National Human Rights Commission (NHRC) has informed the United Nations Human Rights Council (UNHRC) that the recommended implementation of a universal basic income was under examination and active consideration.
References:
https://indianexpress.com/article/what-is/what-is-universal-basic-income-sikkim-5531367/
https://www.isas.nus.edu.sg/wp-content/uploads/2019/05/isas-insights-no.-567.pdf
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