The basic income, also referred to as the universal basic income, is the periodic payment of cash made to all individuals, without having to work. The income would be:
SEE ALSO: Universal Basic Income
Below mentioned are the importance and advantages of universal basic income:
1. UBI encourages people to find employment:
Most welfare programs withdraw benefits when beneficiaries find employment, which sometimes leaves them in a financial state, worse off than what they were in before finding employment.
Universal basic income is for all adults and their status of employment does not make a difference. Recipients are free to request additional income which almost everyone does.
2. UBI reduces bureaucracy:
UBI has no strings attached; determining the eligible recipients is simple and cost of administration reduces considerably.
3. UBI enhances bargaining power for workers:
As there is a guaranteed and unconditional income for laborers, it gives them leverage (Increases bargaining power) to say no to exploitative wages and abusive employers and working conditions.
4. UBI enhances entrepreneurship:
UBI takes care of basic needs in the early no profit days of a new company and acts as a security net if the business fails to take off. UBI gives you more consumers to sell as everyone has money at their disposal. Hence, UBI can be considered a catalyst for new jobs, entrepreneurship and creativity.
5. UBI takes care of the mental health of recipients:
UBI reduces conditions of scarcity, poverty, bankruptcy and financial insecurity, which are the major causes of mental disorders and stress among millions of people across the World.
6. UBI helps people make smart decisions:
Research and studies have shown that people in straits/areas of economic insecurity have a reduced cognitive ability of around 13 IQ points. UBI offers financial security so that people focus on important things in life.
7. UBI improves physical health:
With improved economic security, individuals are less prone to stress, diseases and self destructive behavior.
8. UBI increases production of art, non-profit work and extended caring for loved ones:
UBI offers supplementary income for those interested in labor, that isn’t supported by the market. This leverages people to indulge in art, NGO work and so on.
9. UBI improves labor market efficiency:
UBI has resulted in fewer workers stuck in jobs that demand hard work and exploits manpower. National productivity improves as people would be able to seek work that is more rewarding and offers high job satisfaction.
UBI improves relationships:
UBI reduces domestic violence, child abuse, financial stress and sources of conflict. UBI ensures everyone has an optimistic sense of his or her future and the leverage to get out of abusive relationships.
In January 2017, the Government of Finland came up with a pilot programme to study the implementation of universal basic income. According to this programme, close to 2,000 unemployed citizens would be paid 560 Euros per month for a duration of 2 years. This amount would be paid for 2 years, even if the recipients got a job.
Below mentioned are the disadvantages of UBI:
1. Reduces the motivation to work
The biggest concern of UBI is that it might entice millions of worker to stop working. If people are not working, then there would be less taxable revenue generated by enterprises, thereby hampering the income of the government.
The cost of implementing UBI is huge. The government would have to dedicate and allocate a certain amount of funds, thereby reducing developmental activities in the country. UBI would ease the pressure off health services and make social security institutions redundant, but that is done at a high cost.
3. Philosophical counterarguments
There a few thinkers that say access to money is not a birthright. Money must be earned and not given for doing nothing. Few philosophers say that the recipients of UBI must do community services to receive UBI.
Implementing UBI in India is easier said than done. It takes immense thinking and calculation when it comes to implementing UBI in India. First of all, India is the world’s second most populated country. The Indian population is a staggering 133.92 Crores as per the records of World Bank, United states census bureau.
A large population of India is unemployed. Implementation of UBI is easier in the developed countries, as they can afford to spend money offering UBI, as there isn’t much development to be made. A UBI offering in developing countries like India is almost impossible, as there are many developmental activities happening across the country and the government would be left with little or no money to contribute towards UBI.
Moreover, by implementing UBI in India, the government would de-motivate workers to offer maximum productivity to the employers, which in turn reduces GDP of the nation. India being a developing nation, can’t afford to see a fall in the overall GDP. To implement UBI in India, the Indian government must stop offering subsidies that it currently offers on various household items like LPG and dedicate those funds towards implementing UBI.
You May Also Watch
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.