5 things you must know about Universal Basic Income scheme
5things 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.
UBI is a welfare scheme that provides an unconditional sum of money to citizens of all ages and
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.
The 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.
The 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.
Many 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.
Greece is among the advocates of UBI.
Switzerland, on the hand, voted against the proposal.
The bottom line
Whether 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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