Yuva Nidhi Scheme

Source: The Hindu
GS II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

Overview

1. News in Brief
2. Yuva Nidhi scheme
3. What is Universal Basic Income?
4. What will be the impact of UBI in India?

Why in the News?

Karnataka Chief Minister launched the Yuva Nidhi scheme

News in Brief

• It is the fifth and final poll guarantee of the government
• It provides financial assistance for educated unemployed youth of the State.
• Idea behind the five schemes were premised on the concept of universal basic income, prevailing in European countries.
• The unemployment rate was 5.5% in 2014 and now it stands at 10.5%.

Yuva Nidhi scheme

• The scheme aims to offer economic security to the youth and reduce their dependency on others for their financial needs.
• It is launched in Karnataka.
• The government will begin the distribution of allowances on January.
• Eligibility:
  • Will be provided six months after their graduation or diploma completion if they remain unemployed.
  • Must be residents of Karnataka.
  • Must have completed their degree or diploma in 2022-2023.
  • Individuals receiving loans under state or central schemes or from banks are not eligible.
  • Those who are benefiting from other similar schemes are not eligible.
  • Higher education students are not eligible.
  • Applicants receiving apprentice salaries, or working in the private or government sectors do not qualify.
• Duration: Aid will continue until they secure employment or for a maximum period of two years, whichever occurs earlier.
• Aid Amount
  • Rs. 3,000 per month for unemployed graduates.
  • Rs. 1,500 per month for diploma pass-outs.
• Mode of Transfer: Eligible beneficiaries will receive monthly financial assistance directly in their bank accounts through Direct Bank Transfer (DBT).
• Registration process: Eligible applicants must register on the Seva Sindhu website to avail the benefits of the Scheme (online or offline).

What are the benefits of the scheme?

• Individuals with diplomas and degrees are eligible for monthly unemployment compensation.
• Their bank accounts are instantly credited with financial help, allowing them to cover their costs.
• To ensure stability and financial independence, beneficiaries get help for a maximum of two years or until they find a job.

What is Universal Basic Income?

Universal Basic Income (UBI) is a social and economic policy concept in which all individuals receive a regular, unconditional sum of money from the government, regardless of any other sources of income or employment status.

The primary goal of UBI is to provide a financial safety net that ensures everyone has a basic level of income to cover their essential needs such as food, shelter, and healthcare.

Key characteristics of Universal Basic Income include

• Unconditional
  • UBI is distributed to all citizens or residents without any means test or work requirement.
  • Everyone is entitled to a basic income, regardless of their financial situation or employment status.
• Regular and Predictable
  • UBI is typically distributed regularly, such as monthly or annually, and the amount is consistent.
  • This predictability helps individuals plan their finances.
• Universal
  • The benefit is intended for everyone within a given jurisdiction, regardless of their income level or employment status.
  • This universality is a key principle, differentiating it from targeted welfare programs.
• Cash Transfer
  • UBI is often provided in the form of cash payments, allowing individuals the flexibility to use the money according to their priorities and needs.

What are the cons of UBI?

• Critics, on the other hand, raise concerns about the potential cost of implementing UBI
• It will also increase the risk of inflation if not funded properly.
• Decreases motivation to work and reduces productivity, laziness and efficiency.
• Dependency and reliance on government support will increase.
• The debate around Universal Basic Income continues, and various pilot programs and experiments have been conducted in different parts of the world to assess its feasibility and impact.

What will be the impact of UBI in India?

• Implementation: Issues of identification, targeting, delivery, monitoring, and accountability that affect the quality and reach of the existing programmes. 
• Economic Survey of 2016-17: UBI of Rs. 7,620 per year for every Indian would cost about 4.9% of GDP
• Administration: Complex and diverse political system, with multiple levels of government, parties, and interest groups.
• Population: A large number of youth and population is very high in India.
• Financing Issue: To provide UBI India needs to increase other services targes, and taxes or reduce the spending that may impact the society. 

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