Universal basic income, also known as citizens’ income, guarantees minimum income or basic income to all the citizens or residents of the country regularly from the government or any public institution for alleviating poverty from a region.
Since 2019, the pandemic has caused unprecedented disruptions across the globe. The worst-hit were the vulnerable sections of the society who had significantly low incomes. Nearly 36 crore people in India are living under the ridiculously low poverty line. The pandemic uncovered existing inequalities and created new ones.
In the last decade, the government has been able to pull a substantial number of people out from the poverty trap, however, the numbers are still not met. This happens because, the poverty alleviation schemes are influenced by red tape and the taxpayers’ money ends up lining the pockets of middlemen, sleazy agents, and shady NGOs.
Approximately, 9 lakh crores are spent by the government on the welfare schemes. However, as per the NITI Aayog report, poverty has been going up in the country again since 2018. Interestingly, NITI Aayogs’s report covers the data till 2018 and has not predicted COVID-19 impact. What would be the current statistics is of the least concern to the authorities.
As a result, India is gaining traction for several converging reasons as to why the government needs to relook its social safety nets. India spends heavily on social protection programs but its impact assessment shows the wide scope of improvements.
Nearly two percent of India’s GDP is spent on welfare schemes excluding the maintenance cost of the army and bureaucrats. The key flagship programs like MGNREGS, National Social Assistance Programme, and PM Kisan Samman Nidhi Yojna receive approximately Rs. 3, 79,100 crores per year.
Despite injecting such a huge amount, it does not reach the beneficiaries. These gaps are large because of the lack of awareness and eligibility challenges due to the missing documents. To cater to this, unconditional cash transfers are said to be the fairest, cost-effective, and impactful ways of alleviating poverty and stimulating economic growth.
Through UBI, 78 percent of the population that does not fall under the poverty bracket could also benefit. However, if the scheme is adhered properly, the amount paid to each individual will become too small to bring a significant impact. Here, the government can retain the existing social welfare programs and once its objects are achieved, the beneficiaries can be given the ability to select among the two.
This can be rolled out with stringent monitoring systems to ensure that the amount is not misused. UBI is not an ultimate solution to eradicate poverty, rather, it is a potential tool towards achieving the goal of alleviating poverty from the country.
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