Redraw welfare architecture, place a universal basic income in the centre

As India’s wealth gap stretches to levels unseen since Independence and technology races ahead of policy, we find ourselves hurtling toward a collision of crises, job-shedding automation, gig economy precarity, climate-driven displacement and a mental health time bomb fed by chronic insecurity. At this moment, ideas such as universal basic income (UBI), once dismissed as utopian, deserve a fresh, pragmatic look. A UBI can cushion mass unemployment, restoring consumer demand when machines outnumber workers, rewarding unpaid care that props up the formal economy, and rebuilding a social contract frayed by pandemics and capitalism alike. In India, where welfare systems are often plagued by inefficiencies, exclusions and complex eligibility filters, a UBI offers a radical yet simple proposition: a periodic, unconditional cash transfer to every citizen, irrespective of income or employment status. Re-examining it is no longer an academic indulgence. It is an urgent policy imperative. By embedding dignity, autonomy and simplicity into its design, a UBI challenges us to rethink what a welfare state ought to provide in the 21st century. Universality is the primary strength of a UBI. Where Bismarckian and Beveridgean models peg security to past employment or bureaucratic proof of hardship, a UBI anchors it in citizenship alone, transforming social protection into a streamlined, rights-based pipeline that is resilient to automation shocks, climate emergencies and the invisible labour of care. It bypasses the administrative complexities of targeted welfare and removes the stigma associated with poverty-based entitlements. It aims to create a basic floor of income security for all, ensuring that no one is left behind due to bureaucratic lapses or conditional access. #### The argument for a UBI in India India’s current welfare landscape, though expansive, remains fragmented and uneven. Schemes suffer from leakage, duplication, and exclusion. A UBI offers a way to streamline welfare delivery, particularly as digital infrastructure, such as Aadhaar and Direct Benefit Transfer (DBT) platforms, matures. But the argument for a UBI is not just administrative; it is fundamentally moral and economic. ## Related Stories • A modified UBI policy may be more feasible A modified UBI policy may be more feasible • It’s time for a universal basic income programme in India It’s time for a universal basic income programme in India • Ensure a minimum income for all Ensure a minimum income for all • Think universal basic capital Think universal basic capital The macro numbers flatter us. Earlier this year, the Press Information Bureau (PIB) claimed that India ranks fourth globally in income equality, citing the consumption-based Gini index. However, this measure focuses on household expenditure, not income or wealth, and thus masks the true extent of economic inequality. According to the World Inequality Database, India’s wealth inequality Gini stood at 75 in 2023. The top 1% of the population owns 40% of the national wealth, while the top 10% controls nearly 77%. These figures suggest a level of concentration unseen since colonial times. At the same time, India’s GDP growth — 8.4% in 2023-24 — has failed to translate into broad-based prosperity. Nobel laureate Joseph Stiglitz has long argued that GDP, while measuring economic output, does not account for the quality of life, environmental sustainability or equity. This disconnect is underscored by India’s ranking of 126 out of 137 countries in the 2023 World Happiness Report — behind Nepal, Bangladesh, and Pakistan. GDP-centric narratives obscure rising precarity, job insecurity and social stress. A modest, unconditional deposit, landing in every Jan Dhan account without forms or favours, means that a gig-worker can buy vegetables even when the app is quiet and a rickshaw driver’s child can start the school term with new shoes. So, a UBI chips away at extreme concentration, reduces the lure of one-off freebies, and anchors growth in every kitchen rather than just in quarterly spreadsheets. Pilot studies within India, including the Self Employed Women’s Association (SEWA)-led initiative in Madhya Pradesh (2011-13), found that UBI recipients experienced better nutrition, increased school attendance, and higher earnings. International trials in Finland, Kenya and Iran showed similar results, with improved mental health and food security, without reducing willingness to work. Automation and artificial intelligence add urgency to the case for a UBI. According to a McKinsey Global Institute report, up to 800 million jobs worldwide could be displaced by 2030 due to automation. India’s semi-skilled and informal workforce is especially vulnerable. A UBI can provide a buffer during this transition, allowing time for upskilling and repositioning in the labour market. #### It will rework the citizen-state relationship The philosophical case for a UBI is equally compelling. For decades, the relationship between the citizen and the state has been largely transactional, defined by market participation and economic contribution. A UBI offers a structural antidote to the very populist, consumer-as-voter politics Shruti Kapila critiques. It removes the political incentive to dangle ad hoc freebies, free power here, a loan-waiver there, that parties deploy to manufacture short-term allegiance. When income security is decoupled from partisan largesse, voters are less hostage to transactional giveaways and more empowered to judge governments on systemic outcomes: quality of schools, rule of law, and ecological stewardship. In this sense, a UBI shifts the relationship from consumerism (“Vote me in, get subsidised units of electricity”) back to citizenship (“You already possess a basic economic right; now demand good governance”). It replaces the politics of paternal patronage with a rights-based social contract, undercutting populist schemes that thrive on scarcity, targeted subsidies and moral grandstanding. ## Related Stories • We have adopted principle of universal basic income, prevailing in European countries, says Siddaramaiah We have adopted principle of universal basic income, prevailing in European countries, says Siddaramaiah • Universal basic income of ₹1,000 to be directly credited into women beneficiaries’ bank accounts: Stalin Universal basic income of ₹1,000 to be directly credited into women beneficiaries’ bank accounts: Stalin Worries that a basic income cheque would make everyday prices explode do not match how people live where such cheques already exist. Big inflations, Weimar and Zimbabwe happened when factories shut and debts were owed in foreign money, not because ordinary people got a little extra spending money. Fund a UBI responsibly, keep the shelves stocked, and it becomes a cushion against hardship, not a spark for price hikes. Rather than dismiss a UBI as fiscally unviable or politically risky, we must engage with it seriously, as a tool to reduce poverty, mitigate inequality, and strengthen democratic citizenship. It is important to recognise that a UBI is not a panacea. It will not by itself create jobs, fix public health systems or transform education outcomes. But it can serve as a base — providing a minimum level of economic security upon which individuals can build lives of agency and aspiration. It also recognises and supports unpaid labour, especially the care work undertaken predominantly by women, which remains invisible in traditional economic metrics. A UBI is not about promoting dependency; it is about expanding opportunity. #### Some issues such as funding Despite its promise, a UBI raises legitimate concerns. A minimal UBI of ₹7,620 a person a year — equivalent to the poverty line — would cost around 5% of India’s GDP. Funding such an initiative would require either raising taxes, rationalising subsidies, or increasing borrowing, each of which has its economic implications. Moreover, a UBI’s universality could dilute its redistributive intent by allocating resources to affluent sections alongside the poor. A practical way forward would be to introduce a UBI in phases. Vulnerable groups — women, the elderly, persons with disabilities and low-income workers — could be prioritised. This targeted rollout would allow for evaluation and infrastructure building before full-scale implementation. A UBI could also complement, rather than replace, essential schemes such as the Public Distribution System and the Mahatma Gandhi National Rural Employment Guarantee Act , particularly in the early stages. Another key challenge is technological access. While Aadhaar and Jan Dhan have expanded financial inclusion, gaps remain in digital literacy, mobile access and bank connectivity particularly in tribal, remote, and underserved areas. These gaps must be closed to prevent exclusion from a scheme intended to be universal. As the Indian state seeks to modernise its welfare architecture, a UBI deserves a central place in the conversation. History suggests that India will revisit the question sooner than we think. The calculus is no longer ‘Can we afford UBI?’ but ‘Can we afford the democratic cost of mass insecurity’? Universality, not means-testing, is the architecture fit for a 21st-century welfare state. Saptagiri Sankar Ulaka is Member of Parliament (Lok Sabha), Indian National Congress, and Chairperson, Standing Committee on Rural Development and Panchayati Raj. The views expressed are personal Published - November 07, 2025 12:16 am IST ### Related Topics personal income / technology (general) / Artificial Intelligence / economy (general) / climate change / health / unemployment / employment / employee / welfare / finance (general) / India / Nepal / Bangladesh / Pakistan / Madhya Pradesh / Finland / Kenya / Iran