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Universal Basic Income || UBI || In-depth

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What is Universal Basic Income (UBI)?

  • Universal Basic Income is a periodic, unconditional cash transfer to every citizen in the country.
  • Here, social or economic positions of the individual are not taken into consideration.
  • The concept of universal basic income has three main features. They are as following:
  1. UBI is universal in nature. It means UBI is not targeted.
  2. The second feature of UBI is cash transfer instead of in-kind transfer.
  3. The third feature is that UBI is unconditional. That means one need not prove his or her unemployment status or socio-economic identity to be eligible for UBI.

Why Universal Basic Income?

  • As a form of social security UBI will help in reducing inequality and eliminating poverty. Thus it ensures security and dignity for all individuals.
  • As human labour is being substituted by technology, there will be reduced wage income and reduced purchasing power. UBI will compensate for reduced purchasing power.

How UBI works?

  • Under UBI, only those with zero income will receive the full benefits in net terms.
  • For those, who earn additional income over the basic income, the net benefits will taper off through taxation.
  • So even though the basic income is universal, only the poor will receive the full benefits.

What UBI means to the Government?

  • There would be drastic changes in the way government spends its revenue generated from taxation and other sources.
  • Currently, Government spends its revenue on various services as well as on subsidies.
  • UBI would mean that government may move away from service delivery and empower its citizens to access services through¬†cash transfer.

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