UPSC Courses

DNA banner


  • 05 February, 2024

  • 5 Min Read

Universal Basic Income (UBI)- Analysis

Universal Basic Income (UBI) can strengthen welfare architecture and unlock the nation’s latent demographic potential.

UBI - It is an income support mechanism typically intended to reach all or a very large portion of the population regardless of their earnings or employment status.

Objective- To provide enough to cover the basic cost of living and provide financial security.

Principles – The fundamental principles of UBI include

    • Universal
    • Unconditional
    • Periodic
    • Cash payment
    • Individual

A universal basic income provides a monthly stipend that would ensure that a person would be above the poverty line without any other source of income.

A minimum income guarantee, on the other hand, is at the discretion of the government of the day - it can be equal, more or less than the poverty line expenditure.

What is the significance of UBI?

  • Resource manangement- Universality and unconditionality would mean that the government does not need to spend time and resources in assessing eligibility of the potential beneficiaries.
  • Poverty reduction- It would bring everyone’s income above the poverty line, giving people enough money for their basic needs and necessities.
  • Basic income pilot in Hyderabad, WorkFREE, has seen increased health insurance coverage among participants.
  • Fights unemployment- It would act as act as security net for the millions of people who will be left jobless by the tech revolution.
  • It can be used to promote self-employment among the citizens and increase the employment opportunities in the economy.
  • Promote entrepreneurship- It would cover the risks involved in starting new business and foster the entrepreneurial ideas in the country.
  • Social empowerment- It guarantees an income for non-working parents and caregivers, thus empowering important unpaid roles, especially for women.
  • Impetus to social capital- Basic income programmes from around the world show evidence of people being able to invest in better housing, healthcare, education, savings etc.,
    • SEWA pilot project in Maharashtra revealed that the cash transfers helped increase school enrollments from 69.6% to 70.6%.
  • Crisis recovery- Basic income can help people cope with crises like automation, unemployment, climate change, pandemics and inequality.

The Economic Survey of India suggested a UBI of Rs 7,620 per annum

What are the challenges in providing UBI?

  • Fiscal feasibility- An UBI that covers the entire population would require huge amount of public spending estimated at 5-10% of GDP.
  • Economic burden-The fund for UBI would be generated by raising taxes, cutting other public expenditures, or increasing fiscal deficit, thus having both political and economic implications.
  • Labour market distortion- UBI is independent of work status which might reduce the motivation and incentive for work, education and skill development.
  • Dependency- UBI would create a culture of dependency which may lead to mindless expenditures and add to debt.
  • Behavioural effects- UBI might increase the consumption of alcohol, tobacco and other harmful substances, especially among men, who might misuse the money intended for the household.
  • Social acceptability- It might also challenge the existing norms and values of work, merit, responsibility and solidarity, and create social divisions and conflicts.


Pradhan Mantri Suryodaya Yojana

Recently, Prime Minister announced Pradhan Mantri Suryodaya Yojana under which 1 crore households will get rooftop solar power systems. India’s Status of Current Solar Capacity India currently stands at 4th place globally in solar power capacity. As per Ministry of New an

Foreign Contribution Regulation Act (FCRA)- NGO 

The Foreign Contribution Regulation Act, 2010 (FCRA) registration of two prominent non-governmental organisations (NGOs) — Centre for Policy Research (CPR) and World Vision India (WVI) have been cancelled this month. What is FCRA? Key provisions of FCRA, 2010 Key aspects Description

Voice clone-AI

Voice clone fraud has been on the rise in India. AI voice cloning – It is the process of creating a synthetic replica of a person’s voice through machine learning and speech synthesis technology.It is called as voice deepfakesor audio deepfakes. Objective – To achieve a high level of na

Science communication- how to promote

Steps taken by India to promote Science Communication Publications and Information Directorate (PID) - An organisation under Council of Science and Industrial Research (CSIR) established in 1951 for publishing and disseminating scientific information in India. National science magazines- The PI

Universal Basic Income (UBI)- Analysis

Universal Basic Income (UBI) can strengthen welfare architecture and unlock the nation’s latent demographic potential. UBI - It is an income support mechanism typically intended to reach all or a very large portion of the population regardless of their earnings or employment status. Objective- To provide enough to co


Search By Date

Newsletter Subscription
SMS Alerts

Important Links