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Q. Universal basic income and its viability: Discuss the universal basic income scheme and its viability in India.
May 29, 2017 Related to : GS Paper- 3

Ans :


Since last few months there is discussion going on about universal basic income in India. Earlier it has been reported that the central government is considering a social security scheme in which it would introduce either a universal basic income or a specific benefit that is restricted to the most vulnerable sections of the society.

What is universal basic income (UBI)?

It is a form of social security scheme, in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere.

Its benefits-

  • The UBI scheme is universal and not targeted. In the Indian context, this makes sense because of the less-than-satisfactory experience with targeting welfare services. 
  • Similarly targeting often excludes a lot of the deserving households from receiving subsidies, people often fall in and out of poverty and therefore it becomes difficult to ascertain who are rightfully entitled to receive such benefits.

Its viability in India-

  • A UBI scheme can be afforded only by a highly developed economy where government expenditure already accounts for upwards of 40% of GDP and tax collections is good with respect to GDP.
  • India, with a tax-GDP ratio of less than 17%, is not in a position even to fairly fund basic healthcare and physical infrastructure. Also we have huge expences on sovereign functions of defence, internal security, currency and external relations.
  • Hence universal coverage of benefits must await greater levels of prosperity and internal cohesion.


The targeted various social benefit schemes in India have not yielded desired results and often came under criticism due to various flaws. Hence many are arguing for to move towards universal basic income scheme by replacing the existing schemes. The intention to have universal basic income is well intended, but India needs greater level of prosperity to afford such a huge scheme.

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