What is Universal basic income (UBI)?
Universal basic income (UBI) is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.
What is the principle behind basic income?
The essential principle behind basic income is the idea that all citizens are entitled to a livable income, whether or not they contribute to production and despite the particular circumstances into which they are born.
What are the characteristics of basic income?
Following are the five defining characteristics of basic income:
1 . Periodic: Distributed in regular payments,
2 . Cash payment: Distributed as funds rather than, for example, vouchers for goods or services.
3 . Individual: Each citizen (or adult citizen) receives the payment, rather than each household.
4 . Universal: All citizens receive the payment.
5 . Unconditional: Recipients are not required to demonstrate need or willingness to work.
A Case for UBI in India
The International Monetary Fund (IMF) estimates India could provide a universal basic income (UBI) of Rs 2,600 a year to every person if it eliminates food and energy subsidies.
Even such a modest level of UBI will incur a fiscal cost of about 3% of GDP, but would outperform the public food distribution and fuel subsidies on three counts –
1 . It will address the under coverage of the near 20% lower income groups in the PDS.
2 . Address the issue of higher income groups cornering bigger subsidies.
3 . Increase generosity benefits received by the lower income groups.
What are the prerequisites for a successful UBI?
The two prerequisites for a successful UBI are:
(a) Functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary .
(b) Centre-State negotiations on cost sharing for the programme.
UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion.