Question

In the universal guaranteed basic income, the best solution for poverty and income inequality?

Answer 1

'Universal Basic Income'(UBI) is a very good idea emerged nowadays in many countries of the world.It aims to minimise poverty and inequality.Let us understand it a bit.Universal means its common and general to all,this is not target and everyone will get the benefits irrespective of their social,political,economical and employment status.Under this a certain amount of cash income is transferred to the citizens and common people on periodic basis to support them.It aims to eliminate poverty and inequality.The idea is very good.But as per me,it is not the best solution to poverty and income inequality.No doubt it contributes to the welfare and betterment of the people but i think this is a bit helpful only in the short run and that too it seems to be less effective in coping with the above mentioned problems.Also in the long run and from the viewpoint of Growth and development of the economy,nation and its people it seems to be lesser effective.The first thing is that it is provided to all irrespective of economic and unemployment status.So as per this the employed and unemployed would get the same amount,also people above the poverty benchmark would also get the same amount.This would raise the purchasing capacity of the people and their standard of living would be improved in the short run but the difference between the poor and well off remains the same as both are getting the same.Also this does not leads to capital formation in the economy and much productive economic activities in the economy.Thus contributes very less to the growth and expansion of the economy which is very crucial for the welfare of the people in the long run.It has fiscal implications as arranging funds and source of income to fund this is a great challenge.This might widen the fiscal deficit.Other welfare schemes and subsidies that are targeted towards the poor might be curtailed to fund this.This is also a cause of concern.People will be accustomed to only consume as they are getting income as freebies and the tendency to work might decrease among them and thus a lot of productive work might not take place and this way impact the employment status and workforce of the nation.The economy might become stagnant.

The above idea can be successful if implicated cautiously keeping in mind the pros and cons and certain changes.

The best is work for the long term goals and basic important issues like health, infrastructure,nutrition education etc in an effective manner,taking the required steps of improvement in these areas and the economy.