Question 1 · 10 marks · 178 words written
Opening · a figure
As per Oxfam report, 2021 Top 1% of India population hold more than 40% of total wealth which shows glaring economic inequality present in the country.
Role of UBI (Universal basic income) in addressing economic inequality
Body · points
- Tax on superrich, rich to fund welfare program will lead to redistribution
ii) Social security in form of basic monthly support ensures minimum standard of living
iii) financial support will enhance their Capital, credit → will help poors to start new avenues
iv) Will promote entrepreneurship, self employment opportunities
However, such scheme are not free from drawbacks
Drawbacks
i) - Risk of moral hazard
ii) - high tax on superrich may force them to leave India → Decline in Investment → Decline in Tax collection
iii) Issue of inclusion & exclusion error
iv) Lack of comprehensive data on inequality in terms of wealth
Thus, schemes like Universal basic income should be implemented after careful deliberation.
Way forward → Promote Entrepreneurship, employment opportunities via skill, financial support
→ Enhance the social security support to lowest strata of society (→ - Bottom 5%.)
Close · a way forward
None written.