Targeted Welfare vs. Universal Basic Income

Targeted welfare provides assistance only to specific groups based on criteria like income or disability, aiming to help those most in need. UBI, on the other hand, provides a regular, unconditional sum of money to every citizen, regardless of their income or employment status, aiming to provide a basic standard of living for everyone.

Key provisions of Targeted Welfare programs include:

• •Specific eligibility criteria based on factors like income level.
• •Administration by government agencies or NGOs to verify eligibility and distribute benefits.
• •Aimed at reducing poverty and inequality by helping those most in need.

UBI provides a fixed amount of money to all citizens, regardless of their income or employment status. The amount is usually enough to cover basic needs like food and housing. It would likely be administered by the government, possibly through existing tax or social security systems.

Targeted welfare programs can suffer from:

• •Exclusion errors: Some deserving individuals may be left out due to strict eligibility criteria.
• •Inclusion errors: Some ineligible individuals may receive benefits due to loopholes or corruption.
• •High administrative costs: Verifying eligibility and distributing benefits can be expensive.
• •Stigma: Beneficiaries may feel stigmatized for receiving assistance.

Implementing UBI in India faces challenges such as:

• •High fiscal cost: Providing a basic income to all citizens would require a significant amount of government revenue.
• •Potential for inflation: Increased demand without a corresponding increase in supply could lead to inflation.
• •Work disincentives: Some people may choose not to work if they receive a guaranteed income.
• •Identifying beneficiaries: Ensuring that the UBI reaches all eligible citizens can be difficult.

Targeted programs became more prominent after the 1991 economic reforms, focusing on poverty reduction. Over time, programs like the Public Distribution System (PDS) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) evolved to better target beneficiaries.

Both Targeted Welfare and UBI aim to address poverty and inequality. Targeted Welfare focuses on directing resources to the most vulnerable, while UBI aims to provide a basic standard of living for all, potentially boosting consumption and economic activity.

The Directive Principles of State Policy (DPSP) in Part IV of the Constitution of India guide the government's welfare policies. Articles like Article 38 (promoting welfare of the people) and Article 39 (ensuring adequate means of livelihood) are relevant.

Suggested reforms include:

• •Improving targeting accuracy through better data collection and analysis.
• •Reducing leakages and corruption through direct benefit transfer (DBT) schemes.
• •Enhancing the efficiency of program administration through technology and automation.

Common misconceptions include:

• •That UBI will make everyone lazy: Studies suggest that most people will continue to work, even with a basic income.
• •That UBI is unaffordable: Proponents argue that UBI can be funded by simplifying existing welfare programs and increasing taxes.
• •That UBI will lead to inflation: This depends on how the UBI is funded and implemented.

India's targeted welfare programs, like PDS and MGNREGA, are among the largest in the world. Many other countries also use targeted programs, but the specific design and implementation vary depending on the country's context and resources.

In Prelims, questions can be factual, testing your knowledge of specific schemes and their features. In Mains, questions are often analytical, requiring you to compare and contrast different approaches and evaluate their effectiveness.