Minimum guaranteed income bill

Recently, the Rajasthan Government has announced the minimum income guarantee to provide social security to citizens of the state. Mahatma Gandhi Minimum Guaranteed Income Bill, 2023:
  • The new bill is part of government’s efforts to provide social security to citizens of the State.
  • Aim: The Rajasthan government plans to bring a law that promises ‘guaranteed minimum income’ for the poor.
  • With this scheme, all families in the state will be able to get employment guarantee of 125 days every year, and a minimum pension of?1,000 per month in case of aged /disabled/single women.
  • For this, an additional expenditure of?2,500 crore is being proposed.
  • The Rajasthan government provides social security pension to around 10 million beneficiaries at an annual expenditure of?9,000 crore.
  • The central government provides ?300 crore annually for pension of up to ?300 per month to 1 million people in the state.
  • Significance: The law will ensure that all beneficiaries are covered under different social security schemes and in case they are not, the government will ensure minimum income to them.
The idea of ‘Basic Income’:
  • Universal basic income (UBI) is considered a solution to the looming crisis of decreasing job opportunities and an effective tool for eradicating poverty.
  • UBI is a socio-political financial transfer policy proposal in which all citizens of a given country receive a legally stipulated and equally set financial grant paid by the government.
  • A basic income can be implemented nationally, regionally, or locally.
  • It is a government program in which every adult citizen receives a set amount of money regularly.
  • The goals of a basic income system are to replace other need-based social programs that potentially require greater bureaucratic involvement.
Benefits Challenges
  • To accommodate a diverse workforce, UBI could potentially provide the necessary support and flexibility for individuals to find suitable work or pursue education and entrepreneurship.
  • UBI is supposed to be easily accessible, periodic, in the form of funds (and not vouchers or coupons) and is paid to individuals not households.
  • UBI did not significantly reduce labour force participation, except for new mothers and teenagers, who used the income to extend their maternity leaves and focus on education.
  • UBI has no criteria to select the beneficiaries,
  • Agency involved providing support in the form of cash transfers to respect, not dictate recipients’ choices.
 Arguments in Favour of UBI in India:
  • Social Justice: No society can be just or stable if it does not give all members of the society a stake. A Universal Basic Income promotes many of the basic values of a society which respects all individuals as free and equal.
  • Administrative Efficiency: A UBI will reduce the burden of financing a plethora of separate government schemes and administrative burden of implementation.
  • Employment: UBI is an acknowledgement of the government’s duty to guarantee a minimum living standard (Article 43 of Indian Constitution) is even more urgent in an era of uncertain employment generation.
  • Insurance against Shocks: Poor households often face multiple shocks such as bad health, job loss or aggregate shocks such as crop loss, water borne diseases, loss of property and natural disaster.
  • The UBI income floor will provide a safety net against health, income and other shocks.
  • Freedom of Choice: A UBI treats beneficiaries as agents and entrusts citizens with the responsibility of using welfare spending as they see best, this may not be the case with in-kind transfers.

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