Topic– Part of static series under the heading – “Issues relating to poverty and hunger”
3) According to World Bank report 22% of Indians live below poverty line. With such a large population unable to support themselves, does targeted basic income make sense? Critically examine.(250 words)
Key demand of the question
The question expects us to first highlight the statistics on poverty, and thereafter use it as an argument in favour of targeted basic income. We need to critically examine the pros and cons of the same and thereafter discuss the way forward.
Critically examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any .When ‘critically’ is suffixed or prefixed to a directive, all you need to do is look at the good and bad of something and give a fair judgement.
Structure of the answer
Introduction – Highlight facts and figures related to poverty in India to explain that a sizeable section of population is poor.
- Explain the premise of TBI. TBI is premised on the idea that each poor individual needs guaranteed minimum income which they can count on and also provide the necessary material foundation for a life with access to basic goods and a life of dignity . It must ensure that every poor person should have right to basic income to cover their needs just by virtue of being citizens.
- Examine the merits and demerits of TBI. There are several merits of TBI such as Social justice by reducing inequality; assured poverty reduction; insurance against health, income and other shocks; Improving financial inclusion by direct benefit transfer system; psychological benefits by reducing the pressure of finding a basic living on a daily basis and administration efficiency.
- Examine whether TBI concept would work in India. You can give your view by making arguments such as conspicuous spending especially by male beneficiaries; Moral hazard that tt can make people lazy and opt out of the labor market and cause labor market distortion; gender disparity induced by cash where men are likely to exercise control over spending of TBI, which is not always in the case with other kind transfer like PDS; stress on banking system for delivery of TBI and high fiscal costs involved.
Conclusion – Give a fair and balanced view and discuss the way forward.