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Universal basic income

Topics Covered: Employment related issues.

Universal basic income:


West Bengal Chief Minister Mamata Banerjee has released the Trinamool Congress manifesto for the 2021 Assembly election.

  • The manifesto, among other things, promises universal basic income for every family.

As per the announcement:

  • Under the income scheme, all the 1.6 crore families under the general category will get ₹500 a month and the Scheduled Castes and Scheduled Tribes population ₹1,000 a month.
  • The direct transfers will be in the name of the women head of the family.

What is Universal Basic Income?

It is a programme for providing all citizens of a geographic area (a country or state) with a given sum of money, regardless of their income, resources or employment status.

  • The main idea behind UBI is to prevent or reduce poverty and increase equality among citizens.
  • The essential principle behind Universal basic income is the idea that all citizens are entitled to a livable income, irrespective of the circumstances they’re born in.

UBI has the following important components:

  1. Universality (all citizens included).
  2. unconditionality (no prior condition).
  3. Periodic (Payments at periodic regular intervals).
  4. Payments in cash (not food vouchers or service coupons).

Benefits of Universal Basic Income (UBI):

  1. Provide secured income to individuals.
  2. Reduce poverty and income inequality in society.
  3. Increase the purchasing power of every poor which will further increase aggregate demand.
  4. Easy to implement because no identification of the beneficiary is involved.
  5. Reduce the wastage of government money because its implementation is very simple.

Supporters of the idea:

  • The Economic Survey of India 2016-17 has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty.
  • Other Supporters of the UBI programme include Economics Nobel Laureates Peter Diamond and Christopher Pissarides, and tech leaders Mark Zuckerberg and Elon Musk.

Challenges in Implementing Universal Basic Income in India:

  • High cost involved in implementing UBI is a major factor contributing towards lack of political will in working towards the universal basic income in India.
  • It would reduce the motivation for work and might encourage people to live off assured cash transfers and it is simply unaffordable.


Prelims Link:

  1. Components of UBI.

Mains Link:

Examine the arguments in favour and against introduction of universal basic income in India.

Sources: the Hindu.