Topic– Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
5) Making Universal Basic Income Scheme work requires huge funding as well as certain other measures to raise revenue and reduce expenditure. Analyze.(250 words)
Why this question
The central government as well as the state of Sikkim has recently mooted the idea of UBIS, which will require huge amounts of funds. In this context it is important to discuss how the financial resources can be raised to fund the scheme.
Analyze-here we have to examine methodically the structure or nature of the topic by separating it into component parts, and present them as a whole in a summary.
Key demand of the question.
The question wants us to dig deep into the issue and bring out how financial resources can be raised for UBIS and how other expenditures can be reduced to fund the scheme.
Structure of the answer
Introduction– write a few introductory lines about the UBIS. e.g mention what universal means; what basic means and what the scheme entails.
- Since UBIS is to be given to the rich and the middle classes as well, it can be expensive.
- There is need for funding it from reducing some of the subsidies that are at present enjoyed mainly by the better-off,
- also taking a bit from the various tax concessions mostly to business (called “revenues foregone” in the Central Budget), and
- taxing the currently exempt wealth, inheritance, and long-term capital gains, and collecting more taxes from the currently under-assessed and under-taxed property values.
- If, to start with, it is given only to women, it’ll halve the cost
- packaging a significant UBIS with a simultaneous increase in the taxes on the rich will help macro-economic stability, apart from assuaging the poor who will face some of the price rise in commodities or services, when subsidies are withdrawn (for example, the price of urea will rise for all farmers, if the fertiliser subsidy is curtailed, even though most of the subsidy goes to large farmers and factories).