In this article, we will discuss UBI in India (Pros). So, let’s get started.
UBI in India (Pros)
- Social Justice: No society can be just or stable if it does not give all members of the society a stake. A Universal Basic Income promotes many of the basic values of a society which respects all individuals as free and equal.
- UBI is a radical and compelling paradigm shift in thinking about both social justice and a productive economy.
- Administrative Efficiency: A UBI will reduce the burden of financing a plethora of separate government schemes and administrative burden of implementation.
- The UBI, by design, should effectively tackle issues related to misallocation and leakage because transfers are directed straight to the beneficiaries’ bank accounts.
- Finally, given the fewer avenues for leakages, monitoring a UBI would be easier than many other schemes.
- Employment: UBI is an acknowledgement of the government’s duty to guarantee a minimum living standard ( Article 43 of Indian Constitution) is even more urgent in an era of uncertain employment generation.
- Moreover, UBI could also open up new possibilities for labour market.
- They allow for more non-exploitative bargaining since individuals will no longer be forced to accept any working conditions, just so that they can subsist.
- Insurance Against Shocks: Poor households often face multiple shocks such as bad health, job loss or aggregate shocks such as crop loss, water borne diseases, loss of property and natural disasters.
- The UBI income floor will provide a safety net against health, income and other shocks.
- Freedom of Choice: A UBI treats beneficiaries as agents and entrusts citizens with the responsibility of using welfare spending as they see best, this may not be the case with in-kind transfers.
- Improvement in Financial Inclusion: Payment transfers will encourage greater usage of bank accounts, leading to higher profits for banking correspondents (BC) and an endogenous improvement in financial inclusion.
- Credit increased income will release the constraints on access to credit for those with low income levels.
- Women Empowerment: In 2011, a pilot study of Universal Basic Income was conducted in 8 villages of Madhya Pradesh for 18 months.
- Reviewing the UBI trial in India (2013-2014), SEWA Bharat and UNICEF concluded that “women’s empowerment was one of the more important outcomes of this experiment,”
- Women receiving UBI participated more in household decision making, and benefited from improved access to food, healthcare, and education.