UNVERSAL BASIC INCOME (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     28th October 2023        
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Context: Recently, localized experiments with universal basic income (UBI) have yielded mostly positive results across states, reinforcing calls for social policy.

  • The WorkFREE pilot project to provide support through UBI, a social policy in which people periodically receive minimum but unconditional cash support,

Universal Basic Income (UBI)

  • Definition: UBI is a social welfare policy that provides all beneficiaries with a regular, unconditional transfer payment to guarantee a minimum income.
  • Objectives: To ensure that every citizen has enough income to cover essential needs like food, housing, and healthcare, with the overarching goal of reducing poverty and economic inequality.
  • Simplification of Welfare Systems: UBI is designed to simplify existing social welfare systems by replacing or consolidating various targeted social programs, which can often be complex and administratively burdensome.

Principles of UBI Support Programs

  • Unconditional Support: UBI provides income support without imposing specific conditions or requirements on beneficiaries.
  • Periodic Payments: UBI offers regular, periodic payments instead of one-time lump sum transfers.
  • Direct Cash Transfers: UBI delivers financial assistance through direct cash transfers, eliminating the need for coupons or cash equivalents.
  • Individual Beneficiaries: UBI focuses on providing support to individual beneficiaries rather than households.

WorkFREE Pilot Project

  • About: The WorkFREE Pilot Project is a joint initiative of the University of Bath, Montfort Social Institute-Hyderabad, and the India Network for Basic Income. Funding for the project is provided by the European Research Council.
  • Cash Support: As part of the project, adults receive Rs 1,000 per month, while children receive Rs 500 per month, for a duration of 18 months.
  • Emergency Support: A significant number of recipients utilized the cash support to expand their economic activities and cover unforeseen emergency expenses, mitigating the need for borrowing.
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