Daily Current Affairs : 6-November-2023
Universal Basic Income (UBI) has gained attention as a promising social welfare initiative, aiming to provide financial stability to individuals and families. The WorkFREE pilot project in Telangana, launched in 2022, exemplifies the potential positive outcomes of UBI.
Universal Basic Income (UBI):
UBI involves providing all beneficiaries with unconditional transfer payments, offering a safety net to alleviate poverty and replace need-based social programs. It streamlines welfare systems, reduces poverty, and promotes financial security.
Pros of UBI:
- Poverty Reduction: Establishes a minimum income floor, benefiting vulnerable groups.
- Improved Health: Reduces stress, anxiety, and depression; facilitates better healthcare access.
- Streamlined Welfare System: Simplifies social assistance programs, reducing administrative complexities.
- Financial Security: Provides freedom to make choices about work, education, and personal lives.
- Economic Stimulus: Boosts consumer spending, drives economic growth, and creates employment opportunities.
- Entrepreneurship: Empowers individuals to pursue entrepreneurship and engage in creative activities.
Cons of UBI:
- Cost: Requires higher taxes, potential inflation, and increased debt for financing.
- Work Motivation: May reduce work motivation and productivity, leading to dependency.
- Inflationary Pressure: Could contribute to inflation as businesses adjust pricing strategies.
- Reliance on Government Support: Might create complacency, reducing motivation for personal and professional growth.
WorkFREE Pilot Project: A Transformative Social Initiative:
The WorkFREE project, initiated by the University of Bath, Montfort Social Institute, and India Network for Basic Income, offers direct cash support to residents in Hyderabad slums.
Key Features:
- Adults receive Rs 1,000, children receive Rs 500 monthly for 18 months.
- Supports 1,250 residents, fostering financial stability and economic opportunities.
Positive Outcomes:
- Residents achieved financial stability, starting businesses and improving income.
- Cash support utilized for food, fuel, clothes, and utility bills, enhancing overall living conditions.
Similar Pilot Projects:
- SEWA’s pilot project in Delhi and Madhya Pradesh provided Rs 1,000 monthly to families below the poverty line.
The Way Forward for Universal Basic Income (UBI):
- Balanced Income Amounts: Carefully balance UBI to maintain motivation for employment and self-sufficiency.
- Complementary Support Systems: Implement universal healthcare and education to enhance UBI’s effectiveness.
- Alignment with UBI Principles: Avoid exclusivity; ensure UBI reaches all potential beneficiaries.
- Efficiency and Reduced Misallocation: UBI minimizes administrative complexities, ensuring financial support reaches those in need.
Important Points:
- Universal Basic Income (UBI):
- Provides unconditional transfer payments to alleviate poverty and streamline social welfare.
- Reduces poverty and income inequality, benefiting vulnerable and marginalized groups.
- Improves health by reducing stress and anxiety, facilitating better healthcare access.
- Stimulates economic growth by boosting consumer spending and creating employment opportunities.
- Empowers individuals to pursue entrepreneurship and creative activities.
- Pros of UBI:
- Establishes a minimum income floor, enabling access to basic necessities like food, healthcare, and education.
- Simplifies welfare systems, reducing administrative costs and complexities.
- Provides financial security and freedom, allowing individuals to make choices about work and personal lives.
- Cons of UBI:
- Requires higher taxes, potentially leading to inflation and reduced economic growth.
- Raises concerns about decreased work motivation and productivity.
- Might create dependency on government support, reducing motivation for personal and professional growth.
- WorkFREE Pilot Project:
- Collaborative effort providing direct cash support to residents in Hyderabad slums.
- Adults receive Rs 1,000, children receive Rs 500 monthly for 18 months.
- Positive outcomes include financial stability, improved income, and enhanced living conditions.
- Cash support utilized for necessities like food, fuel, clothes, and utility bills.
- The Way Forward for UBI:
- Balance UBI amounts to maintain motivation for employment and self-sufficiency.
- Implement complementary support systems like universal healthcare and education.
- Ensure UBI aligns with its principles, reaching all potential beneficiaries without exclusivity.
- Introduce UBI to minimize administrative complexities and reduce misallocation of funds.
Why In News
Recently, the positive outcome Universal Basic Income (UBI) can have on individuals and families has been highlighted through the WorkFREE pilot project, started in 2022 in Telangana, demonstrating its potential to alleviate financial burdens and promote social well-being in communities.
MCQs about Transformative Impacts of Universal Basic Income
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What is the primary objective of Universal Basic Income (UBI) ?
A. To increase inflation rates
B. To reduce poverty and income inequality
C. To discourage work motivation
D. To complicate administrative processes
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What is a potential drawback associated with Universal Basic Income (UBI) ?
A. Decreased work motivation
B. Reduced government spending
C. Enhanced economic growth
D. Simplified welfare systems
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What is the primary purpose of the WorkFREE pilot project ?
A. Providing free healthcare services
B. Distributing unconditional transfer payments to residents
C. Promoting educational initiatives
D. Building infrastructure in slum areas
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What is suggested to enhance the effectiveness of Universal Basic Income (UBI) ?
A. Increasing administrative complexities
B. Implementing complementary support systems like universal healthcare
C. Excluding potential beneficiaries
D. Raising taxes without any clear purpose
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