What is Universal base income? Why it was suggested and what are its advantage?

Universal basic income (UBI) is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens. It is one of the kind of redistribution system.

 

It was suggested because:

 

  • Inefficiencies of existing subsidies scheme.
  • Exclusion error.
  • According to the survey most of the scheme were not able to reach targeted beneficiaries.Often the very districts that house the most number of poor are the ones facing the greatest shortfall in the allocation of.
  • One of the key problems with many programs is that the take-up and effectiveness of targeting will be correlated with a state‚Äôs institutional and implementation capacity.

 

 

Benefits of UBI:

 

A UBI has the merit that it will not necessarily be driven by take-up capability from below but given from above to all the deserving. In that sense, it is less likely to be prone to exclusion errors.

 

And by directly transferring money to bank accounts, and circumventing multiple layers of bureaucracy, the scope for out-of- system leakages (a feature of PDS schemes) is low.