What is Universal Basic Income?

  • Universal Basic Income (UBI) is a programme for providing all citizens of a country or other geographic area/state with a given sum of money, regardless of their income, resources or employment status.
  • The main idea behind UBI is to prevent or reduce poverty and increase equality among citizens. The essential principle behind Universal basic income is the idea that all citizens are entitled to a livable income, irrespective of the circumstances they’re born in.
  • The Economic Survey 2016-17 advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty.
  • Sikkim’s ruling party, the Sikkim Democratic Front (SDF), recently declared to include the Universal Basic Income scheme in its manifesto ahead of the Assembly election in 2019 and aims to implement it by 2022.
    • If everything goes according to the plan, it will be the first state to implement UBI in India.
    • Sikkim has set up examples in the country in different areas in the past also, some of them being:
      • Sikkim is the best state for women in the workplace, thanks to its high rates of female workforce participation, there’s less crime against women.
      • Sikkim’s literacy rate increased to 82.2% from 68.8% in 2001, among the country’s highest.
      • Sikkim is the least populated state in India, has its per capita GDP growing in double digits since 2004-05.
      • Sikkim also became the first fully organic state.

The Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre- State negotiations on cost sharing for the programme.