5 things you must know about universal basic income scheme

5 things you must know about Universal Basic Income scheme

“Current year (2016-2017) is not a conventional year as major reformative decisions have been taken,” Finance Minister Arun Jaitley said in one of his pre-budget speeches. And one

of the reform measures that could be announced is the Universal Basic Income (UBI).Here are 5 things you must know about UBI: 

Second rate hike: This is the second rate hike since the Fed first indicated it plans to increase interest rates. It first increased rates in its December 2015 review meeting for the first time in almost 10 years.

ConceptUBI is a welfare scheme that provides an unconditional sum of money to citizens of all ages and backgrounds.

#1

Inflation to rise: The US central bank has worried about the rise in inflation, a by-product of a prospering economy. It expects inflation to climb to 2% over the medium term. This was the main reason behind the rate hike.

ScaleThe FM will present the Economic Survey 2016-2017 in the parliament on 31st January.This survey is expected to weigh the pros and cons of implementing UBI in India.However, it is unlikely that India will develop the bandwidth to commit to a full-scale UBI scheme so soon, as per media reports quoting a government official.

#2

ProsThe existing welfare schemes in the country have their own set of challenges.There is an uneven distribution of resources.Corruption has its own say in the process.With uniform and unconditional income, UBI could be an improvement over these existing schemes. 

#3

ConsMany believe that a regular source of income will affect the productivity of the citizens.The employment level of the country could also go down.This, in turn, could affect the tax revenues of the government.Another unpleasant outcome could be that people might start spending on unnecessary things.This could spark inflation and slow down growth.

#4

Global advocatesGreece is among the advocates of UBI.Switzerland, on the hand, voted against the proposal.

#5

The bottom lineWhether or not India will embrace this social security scheme is a big question right now.This is yet another reason why you must not miss the Budget speech.

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