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Modi govt. is planning to introduce a PM Universal Basic Income (UBI) Scheme 2019 for poor people across the country. In this scheme, the government will transfer a certain stipulated amount directly into the bank account of the citizens who are unable to earn an income. This UBI scheme is going to address the issues of farmers and unemployment as all the jobless youths and distress farmers would be given this financial assistance through DBT.
The economic survey suggested that this is a more efficient way to help the poor people. Moreover, govt. is going to provide the resources directly to the needy people through Universal Basic Income (UBI) Scheme 2019. The union govt. is seeking advice on minimum amount and people to be benefited from various departments to ensure successful implementation of this scheme.
The central govt. is expected to announce this scheme in the upcoming Union Budget 2019-20.
PM Universal Basic Income Scheme 2019 – Details
Universal Basic Income is a periodic, unconditional cash transfer instead of in-kind transfer to every citizen in the country. In this UBI scheme 2019, social or economic positions of the individuals are not taken into consideration. UBI is universal in nature and it is not targeted. Any beneficiary will not have to prove their unemployment status or socio-economic identity to be eligible for Universal Basic Income Scheme.
1. Need for Universal Basic Income Scheme 2019
UBI scheme will form the basis of social security and will help in reducing inequality and eliminating poverty. This Universal Basic Income Scheme 2019 will ensure security and dignity for all individuals. With the advancement in technology, there will be reduced wage income and less purchasing power capacity. So, UBI scheme will compensate for this reduced purchasing power.
UBI scheme will give priority to the people living below poverty line (BPL), farmers, unemployed youths and thus the number of beneficiaries could reach upto 20 crore. The recommendations for UBI scheme are being sent to the government on the basis of economic survey held in FY 2016-17.
2. Working for UBI Scheme 2019
Under UBI scheme, people who posses zero income will get the full benefits in net terms. All those people who earns an additional income over the basic income, the net benefits would be tapered off through taxation. Even the universal basic income scheme is universal, only the poor people will get its full benefits.
This scheme is going to bring major changes in the way that govt. spends its revenue generated from taxes and other sources. Till date, the central govt. spends a major portion of its revenue on various services and subsidies.
3. Advantages of Universal Basic Income (UBI) Scheme 2019
There are various advantages of PM Universal Basic Income Scheme which are as follows:-
- UBI scheme will give freedom to the individuals to spend the money as they want and will strengthen economic liberty at an individual level. They can utilize this money to do productive work along with meeting their daily requirements.
- PM Universal Basic Universal Scheme will act as an insurance against unemployment and would help in reducing poverty. Moreover, this scheme is a major step towards the equitable distribution of wealth.
- As the income of people will increase, the bargaining power of individuals will also increase and beneficiaries will not have to accept any forced working conditions.
- UBI is easy in implementation and as it is universal, so there is no need to identify beneficiaries. Hence it includes the errors in beneficiaries identification which is a common problem in providing benefits of the targeted welfare schemes. Moreover, wastage in government transfers also gets reduced and thus would reduce corruption.
- Demand for financial services will also increase, so banks would be able to invest in the expansion of their service network which will raise financial inclusion.
- UBI can also result in greater productivity. For eg. agricultural labourers who own small patch of land and work for other people on low wages can now undertake farming on their own land. This has long term effects as the total percentage of unused land would get reduced and would result in an increase in the agricultural productivity.
Govt. may move away from service delivery and will empower its citizens to access services through cash transfer.
4. Economic Survey 2016-17 on PM UBI Scheme 2019
The Economic survey 2016-17 says that any program in practical cannot survive on strict universality. So, the economic survey has proposed some alternatives:-
- The survey targets bottom 75% of the total population and thus referred to as quasi-universality which will cost around 4.9% of GDP.
- Another alternative targets women who generally faces worst conditions in employment opportunities, education, health or financial inclusion. UBI Scheme for women will reduce the fiscal cost of UBI to 50%. Moreover, providing money to women will also reduces the concerns for money being used on temptation goods.
- UBI could also be started for widows, pregnant mothers, the old and the infirm groups of people. This will result in exclusion error in beneficiaries identification and efficiency will also get reduced and corruption will raise.
Universal Basic Income Scheme 2019 is a more efficient alternative with many advantages and some practical challenges also. Govt. wants to create a transparent, safe financial architecture and efficient mode of delivery like JAM trinity which is important for the success of UBI.