Context

• As India’s wealth gap widens and technology outpaces policy, the nation faces converging crises, automation-led job losses, gig economy precarity, and climate-driven displacement.
• Amid this turbulence, Universal Basic Income (UBI), once deemed utopian, now demands serious policy attention.
• The idea offers not just an economic cushion but a way to restore dignity, stability, and citizenship in a rapidly changing society.
• Therefore, it is important to analyse how the argument for UBI in India unfolds through economic, moral, administrative, and political dimensions, positioning it as a foundation for a renewed social contract in the 21st century.

Economic Inequality and the Moral Imperative

• India’s widening wealth inequality underscores the moral urgency of UBI.
• While official narratives celebrate 8.4% GDP growth (2023–24), the benefits remain concentrated at the top, the richest 1% own 40% of national wealth, and the top 10% control 77%.
• As Nobel laureate Joseph Stiglitz warns, GDP alone cannot measure equity, sustainability, or well-being. India’s 126th rank in the 2023 World Happiness Report reveals the disconnect between economic output and social health.
• Against this backdrop, UBI is framed as both an economic stabiliser and a moral response.
• It ensures a basic income floor for all citizens, empowering them with autonomy and security.
• By simplifying welfare into a direct, unconditional transfer, UBI bypasses the leakages and exclusions that plague India’s targeted schemes.
• The measure not only redistributes income but also recognises unpaid care work, especially by women, which sustains the formal economy yet remains invisible in national statistics.

Universality as Administrative and Philosophical Strength

• The essay identifies universality as UBI’s greatest strength. Unlike traditional means-tested welfare systems, a UBI ties entitlement to citizenship, not poverty.
• This eliminates stigma, bureaucracy, and corruption, making welfare delivery efficient and inclusive.
• Philosophically, universality transforms UBI into a rights-based guarantee, not a political favour.
• It aligns with the vision of a modern welfare state, ensuring that social protection is streamlined, unconditional, and resilient to shocks such as automation and climate change.
• By anchoring welfare in citizenship, UBI redefines inclusion, making every citizen a rightful stakeholder in the national economy.

Economic Rationale and Practical Evidence

• Empirical evidence strengthens the case. The SEWA-led pilot in Madhya Pradesh (2011–13) showed that unconditional cash transfers led to better nutrition, school attendance, and productivity.
• Similar trials in Finland, Kenya, and Iran found improvements in mental health, food security, and economic stability, disproving fears that UBI discourages work.
• With automation threatening up to 800 million jobs globally by 2030, India’s informal and semi-skilled workforce is especially at risk.
• UBI provides a transition buffer, allowing workers to upskill and adapt. Thus, it is not a welfare expense but a strategic investment in resilience and human capital.

Reconstructing the Citizen–State Relationship

• Beyond economics, UBI carries a profound philosophical and political significance.
• It challenges India’s transactional welfare politics, where parties exchange short-term freebies for votes.
• By decoupling income security from political patronage, UBI empowers citizens to evaluate governments on systemic outcomes, education, health, justice, and sustainability, rather than material handouts.
• This marks a shift from consumer-as-voter to citizenship-based democracy.
• UBI transforms the citizen–state relationship from one of dependency to one of rights and accountability.
• When income security is guaranteed, voters can demand good governance instead of negotiating for subsidies.
• Thus, UBI becomes a tool of democratic renewal, replacing the politics of paternalism with a rights-based social contract.

Funding and Implementation Challenges

• The biggest challenge is UBI’s fiscal and logistical challenges. A modest income of ₹7,620 per person annually, roughly the poverty line, would cost about 5% of India’s GDP.
• Financing such a scheme demands tax reform, subsidy rationalisation, or phased rollout. Yet the essay reframes the debate: the question is not Can India afford UBI? but Can it afford the cost of mass insecurity?
• A phased introduction offers a realistic path, starting with vulnerable groups like women, the elderly, and persons with disabilities.
• As India’s digital infrastructure (Aadhaar, DBT, Jan Dhan) matures, these systems can facilitate seamless delivery.
• However, gaps in digital literacy and access, especially in remote areas, must be bridged to ensure true universality.
• Crucially, UBI should complement, not replace, existing safety nets like PDS and MGNREGA, particularly in the early stages of implementation.

Conclusion

• UBI is more than a fiscal proposal, it is a vision for equitable citizenship in an age of automation and inequality.
• It embeds dignity, autonomy, and security at the heart of welfare policy, offering India a new social contract for the 21st century.
• By ensuring a minimum level of income for all, UBI promotes both economic stability and democratic vitality. It reframes welfare from charity to citizenship, from transaction to trust.
• The true question is no longer whether India can afford a UBI, but whether it can afford the democratic cost of leaving millions behind.