Home > Business > Economy

Gov't doubles budget for rural basic income pilot program following local backlash

Published: 19 Nov. 2025, 14:41 Updated: 19 Nov. 2025, 17:38

President Lee Jae Myung speaks during a senior aides' meeting at the presidential office in Yongsan, central Seoul, on Nov. 13. [JOINT PRESS CORPS]

The budget for President Lee Jae Myung’s rural basic income initiative — a major campaign pledge — has been doubled at the pilot stage, following protests from local governments that were excluded from the initial trial selection.

Critics warn that if the project is eventually rolled out nationwide, the resulting fiscal burden could reach trillions of won annually due to its mandatory nature.

The budget proposal and fund operation plan from the Ministry of Agriculture, Food and Rural Affairs for 2026 was approved with a 1.17 trillion won ($797 million) increase over the government’s original plan, according to the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee on Tuesday.

Of that sum, funding for the rural basic income program was increased from 170.3 billion won to 340.9 billion won. The increase allows for up to five more trial regions and raises the central government’s contribution rate from 40 percent to 50 percent.

The policy provides 150,000 won per person per month in local currency for two years to residents in regions experiencing population decline. The aim is to revitalize areas facing extinction through direct cash support.

The trial will run from 2026 to 2027. The government plans to decide whether to implement the program nationwide based on its outcomes.

Despite the project still being in the trial phase, the budget was expanded following intense backlash from regions that were not selected. Of the 69 counties classified as population-declining regions nationwide, 49 — or 71 percent — applied to join.

Park Sung-woo, director general of the Ministry of Agriculture, Food and Rural Affairs’ Rural Policy Bureau, announces the selection results for the pilot rural basic income project at the Government Complex Sejong in Sejong on Oct. 20. [NEWS1]

Only seven were chosen, including Cheongyang in South Chungcheong and Jeongseon in Gangwon. North Chungcheong had no counties selected, triggering local anger.

Some regions are concerned about further resident outflow and backlash. Cheongyang, for example, saw its population rise by 404 over just a month and a half.

“The recent population bump coincided with the launch of the basic income discussion, so residents from nearby areas likely relocated to receive the cash benefit,” said a Cheongyang County official.

Choi Ho-taek, a professor of public policy at Pai Chai University, warned that “with the total population stagnant, a rise in one region likely means a zero-sum shift from neighboring areas.”

Of the seven selected counties, only Gyeonggi pledged to fund 30 percent of the project, while North Jeolla, North Gyeongsang and South Gyeongsang committed to 18 percent each, and Gangwon to just 12 percent.

Still, demand to participate remains high. Some local governments are calling for the state subsidy rate to be raised to as high as 70 or 80 percent, citing their limited fiscal capacity.

Cheongyang County Mayor Kim Don-kon speaks on the rural basic income initiative during a press briefing on Nov. 16. [CHEONGYANG COUNTY]

Ahn Dong-hyun, a professor of economics at Seoul National University, warned of a vicious cycle.

“If the national government takes on such cash-based mandatory expenditures, there may not be enough fiscal space for critical local investments in the future,” said Ahn.

The rural basic income program is likely to be adopted more widely. If expanded to all 69 counties classified as population-declining regions, it would require 4.9 trillion won per year. Of that, around 2 trillion won would be covered by the central government — roughly 10 percent of the Agriculture Ministry’s entire annual budget.

If extended to Korea’s entire rural population, currently 9.64 million people, government spending could rise to about 6 trillion won annually.

Amid a rapidly aging population and rising costs of existing cash welfare programs such as the basic pension, the rural basic income program could place significant pressure on public finances.

“Once cash welfare becomes a mandatory expenditure, it’s nearly impossible to scale back,” said Ahn. “The fiscal multiplier of such payments is only about 0.3, far lower than that of infrastructure investment. The policy offers limited impact but creates a massive fiscal strain.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM YEON-JOO [[email protected]]