Definition, Features, Advantages, and Disadvantages of Universal Basic Income (UBI)

The idea of universal basic income came in many centuries ago. It is a program in which adult citizens of the country are getting paid a set amount of money by the government, irrespective of their need to avoid poverty in the country. This feature of government has been there and functioning well in many countries. Countries like the United States, United Kingdom, Switzerland, Ukraine, etc., give their citizens this feature. In the current situation of COVID-19, many countries were not giving their citizens these benefits, but considering the situation, even countries like India started giving Universal Basic income. Universal Basic Income sent their citizens a set of money directly to their banks. 

Universal Basic Income

Universal Basic Income is a government plan in which every adult citizen of the country gets a fixed sum of money on a regular and even period. Even though the idea of universal basic income has been there for centuries, it has gained the consciousness of nations in recent years. Supporters of universal basic income think that this is a great initiative by the government to help the poor and decrease the poverty rate in the country. Even when the government-supplied money is not enough to live on, it is still a great help for the poor or those working part-time or working at low wages. It also helps the people in need but is somehow unable to apply for other government schemes, as they do not have to do anything in universal basic income. The government automatically sends a fixed sum of money to their accounts without them having to do anything. In some countries, the Universal Basic Income is enough to fulfil the person’s basic needs completely, and in such a case, it is called Full basic income. 

Features of Universal Basic Income

1. Cash payment – beneficiaries will get the payment directly in their banks and not cash vouchers for goods or services. 

2. Universal scheme – Universal basic income is universal. It means tha every that it is not for some specific race but every citizen of the country without being discriminatory. 

3. Unconditional scheme – No one in this scheme has to prove his/her unemployment or socioeconomic condition to be a part of Universal basic income. Therefore, the individual’s economic situation is not considered for any beneficiary. 

4. Periodic – The payment to the beneficiaries will be made in a fixed period, monthly or annually. 

5. Individual beneficiaries mean that every adult citizen is a part of this scheme and not one household. 

Advantages of Universal Basic Income

1. It is one of the greatest efforts to reduce poverty in any country. 

2. Universal basic income reduces income inequality as the amount is fixed for every individual in the country. 

3. The aggregate economy gets a boost, as every poor person gets the purchasing power. 

4. Wastage of money is nearly non as the procedure is simple in this scheme. 

5. Universal basic income provides a secured income to every individual. 

6. As the government does not need to identify the beneficiaries, it is easy to implement.

7. The governments used to give the citizens beneficiary schemes, but now they are starting an effort to change the trend by giving people straight cash and the freedom to purchase the goods of their choice. 

Disadvantages of Universal Basic Income

1. There is a strong chance that a free supply of income can make the poor lazy or lose the will to earn. 

2. Giving the poor money without making any effort will increase the unemployment rate as people will start being dependent on the government for their living. 

3. The inflation rate of the economy will increase. 

4. There is no guarantee that people will use the given money for basic needs like education, food, health, etc.

5. The people who do not require this money could use it for other purposes like drugs, tobacco, alcohol, or even for their luxury. 

Conclusion

Universal Basic Income is a government plan in which every adult citizen of the country gets a fixed sum of money on a regular and even period. We can say that universal basic income has its merits and demerits simultaneously. In my opinion, universal basic income is a good thing. Universal basic income makes people lose the will to work, but for some who work part-time or have low wages. So, the government should improve the employee wage rate and aslo improve the poor’s skills rather than giving them free cash. That would make them self-sufficient and not dependent on the government.