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Minimum guaranteed income bill

Published: 20th Jul, 2023

Context

The Rajasthan government tabled the Rajasthan Minimum Guaranteed Income Bill, 2023, with an aim to provide entitlement-based social security to support the individuals or households with an additional minimum guaranteed income in the form of a guaranteed wage or social security pension.

Key-highlights of the Bill

  • Focus area: The Bill has three broad components-
    • Right to Minimum Guaranteed Income
    • Right to Guaranteed Employment
    • Right to Guaranteed Social Security Pension
  • Aim: The Rajasthan government plans to bring a law that promises ‘guaranteed minimum income’ for the poor.
  • Mahatma Gandhi Minimum Guaranteed Income Yojana (MGMGIY): The Mahatma Gandhi Minimum Guaranteed Income Yojana (MGMGIY) will be the name of the scheme. The state shall provide to all eligible people a minimum guaranteed income by providing employment
    • in urban areas through the Indira Gandhi Urban Employment Guarantee Scheme (IGUEGS)
    • in rural areas through Chief Minister Rural Employment Guarantee Scheme (CMREGS)
  • Alternatively, eligible individuals may receive a pension if they fall under the categories of old age, specially abled, widow, or single woman.
  • Guaranteed Employment: Every adult residing in rural areas of the state has the right to guaranteed employment for at least an additional 25 days per financial year, after completing the maximum days of work under MGNREGA.
  • Right to Guaranteed Social Security Pension: The Right to Guaranteed Social Security Pension ensures that individuals in the categories of old age, specially abled, widow, or single woman, who meet the prescribed eligibility criteria, receive a pension.
  • 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.
  • Universal basic income (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.
  • Universal basic income (UBI) 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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