Universal Basic Income Issues-GS-3

Linking the proposed Universal Basic Income (UBI) with the thoughts and principles of Mahatma Gandhi, many challenges needed to be resolved before the UBI scheme becomes a reality.

Proposed new scheme, considering giving unconditional cash transfer of about Rs 10,000-15,000 on an annual basis to each and every citizen in the country, where the average income of a person is 800-900 USD per day, in comparison to 52000 USD in United States and 12500 USD in China.

Proposed UBI could possibly replace the 1000-odd schemes that the government runs for the poverty elimination like MGNREGA, PDS, Indira Awas Yojana, etc.

Gandhiji will have at least four objections to UBI including-

  1. Giving charity to able-bodied persons,
  2. Implementation of UBI costing the government 5-10 percent of the GDP,
  3. The market dynamics not helping the poor in buying good and services and

Men in the family misusing the money coming through this scheme.

Linking the proposed Universal Basic Income (UBI) with the thoughts and principles of Mahatma Gandhi


  1. On the most basic level, everyone who works does so out of economic coercion. You have to feed, clothe, and house yourself; those things cost money, so you have to work for money.The Universal Basic Income (UBI) counteracts that by providing a reasonable alternative to being coerced into unpleasant work.
  2. Welfare-The UBI aims to increase the welfare of the poor, but also allows the poor more freedom by disbursing their benefits as money instead of in-kind transfers.
  3. More Education- In the middle class, young people will take more time to explore the world and enrich their lives before heading off to college or the workplace. Generally, people will stay in school longer, because the costs of doing so will be less.
  4. Equal Pay-The UBI won’t fix things completely, but it will take women and minorities a long way towards achieving equal pay to white men
  5. Entrepreneurship-The UBI will greatly encourage
  6. By replacing a wide range of specific programs with a single, cash-based system, it would be much easier to reduce or eliminate the high marginal “tax rates” at the level of earned income at which each program is phased out, along with “welfare traps” in which people are better off earning less than earning more, due to those phase-outs.


  1. The Moochers. The basic rate of structural unemployment (labor “churn”) will be higher, because there will be some number of people who decide to be lazy and just live off their UBI
  2. Funding
  3. The cost of a minimally generous universal basic income would be much, much higher than the programs it is intended to replace.
  4. Another set of political issues arise from the exclusive use of cash rather than in-kind benefits.

Susceptibility to Inflation. The UBI will be presumably pegged to some poverty line, which is ultimately itself pegged to inflation.

Leave a Reply