• The Pandemic has once again brought to fore the idea of universal basic income (UBI) of periodic and unconditional cash payments to all citizens.
• The idea of UBI has recurrently appeared in history starting with Thomas Paine (American political activist) in 18^th century.
• UBI is currently gaining traction for several converging reasons as governments look to revamp their social safety nets.

Universal basic income (UBI)

• It is a simple social policy that involves giving people modest, regular, and unconditional cash payments, without being required to do any work for it.
• The larger objective of UBI is to build a financial floor through which no citizen could fall, and cement a decent standard of living for the precarious and self-employed. 

Social Security Systems and its Types

• Social security systems are like a safety net.
• It includes a variety of statutory insurances and social grant schemes bundled into a formerly complex and fragmented system run by the Indian government.
• It is composed of a number of schemes and programs spread throughout a variety of laws and regulations.
• These social security nets can be of three types. They are-

Passive Safety Net

• It  focuses on those falling from basic living wages and prevents them a fall below the critical survival line. 
• It is a social assistance programme meant for the most income-deprived sections of society.

Active Safety Net

• It is a scheme with a higher outlay. 
• It works like a trampoline so that those who fall on it are able to bounce back to basic living wages.

Proactive Safety Net

• It acts like a launchpad so that those who fall on it will not only bounce back but will also move up beyond basic living wages.
• It is the most desirable option but requires immense resources and institutional capacity.

Social Security Schemes

• For social security, people on the south end of the income line need social assistance schemes.
• Those on the north end of the income line should have voluntary insurance.
• India operates the widest spectrum of social security schemes which cater to the largest number of people than any other country.
• The sheer size of the social security programmes offered by India, which are provided to millions of households dispersed across a vast geographic area, is remarkable.

Types of Social Security

• It mainly encompasses food security, health security and income security.

Food Security

• The Indian food security programme has over 800 million beneficiaries been provided heavily subsidised food grain under the National Food Security Act (NFSA).
• It is the world’s largest food security programme.
• About 120 million children are provided free lunch under the Mid-Day Meal Scheme. 
• 50 million people benefit from the free meals programme run by a few State governments.

Health Security 

• Ayushman Bharat Scheme of the central government has over 490 million beneficiaries for the unorganised sector.
• In organised sector, the Central government runs the Employees State Insurance Corporation (ESIC) catering to 130 million and Central Government Health Scheme (CGHS) for 4 million beneficiaries.
• Health insurance schemes run by various State governments cover about 200 million people.

Income security

Organised Sector

For the organised sector, there are three types of provident fund schemes:

• General Provident Fund (GPF)- availed by 20 million Central and State government employees in the country.
• Employees’ Provident Fund (EPF)- availed by 65 million workers in the other organised sector.
• Public Provident Fund (PPF)-  It can be availed by any Indian citizen but has contributions from the organised sector mostly. 
• There are about 53 million New Pension Scheme subscribers in the country.
• 2 million in the Central government, 5.6 million in the State government and the rest in the private sector.

Unorganized Sector

• Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) and the PM-KISAN scheme is availed by about 120 million farmers. 
• Atal Pension Yojana (APY) benefits 40 million people.
• Pradhan Mantri Shram Yogi Maandhan Yojana has about five million beneficiaries.
• There are about 50,000 beneficiaries under the National Pension Scheme for Traders and Self-Employed Persons (NPS-Traders) scheme.
• The Mahatma Gandhi National Rural Employment Guarantee Act is the largest unorganised sector income security programme.
• It has about 60 million beneficiaries.

Challenges of Social Security Schemes

• There are issues of financial sustainability and leakages in the food security programme.
• Despite large-scale provisions, about 400 million Indians are not covered under any kind of health insurance.
• About 110 million people in India have private health insurance. 
• The most challenging aspect of the social security system to address is income security.
• Out of 500 million workers in India, about 100 million have no income security (pension, gratuity or other income) coverage. 
• Proponents of universal basic income point to the informality of the Indian economy as a barrier to implementing schemes such as unemployment insurance in the country.
• The idea of universal basic income runs the risk of not being implemented because it requires extensive beneficiary identification.

Why India can adopt the other UBI or universal basic insurance?

The universal basic insurance is a better proposition for two reasons:

• The insurance penetration (premium as a percentage of GDP) in India has been hovering around 4% for many years compared to 17%, 9% and 6% in Taiwan, Japan and China.
• The data of informal sector are now available both for businesses (through GSTIN, or Goods and Services Tax Identification Number) and for unorganised workers (through e-Shram, which is the centralised database of all unorganised workers).
• As a result of the recent initiatives by the Government, the Goods and Services Tax (GST) portal has 13.5 million registrations and the e-Shram portal has over 280 million registrations.
• As a prototype of a social security portal based on such data, the social registry portal, ‘Kutumba’, developed by Karnataka is available as a blueprint for central government.

Until the Indian economy develops enough to support adequate voluntary insurance, social security can be enhanced through the universal basic insurance scheme.