Universal Basic Income (UBI) in India

As India grapples with widening wealth gaps and accelerating technological advancements, the concept of a Universal Basic Income (UBI) emerges as a potential solution to address multifaceted crises such as job displacement due to automation, economic inequality, and social security challenges.

Why UBI is Important

• A UBI provides a periodic, unconditional cash transfer to every citizen, independent of income or employment status, aiming to streamline welfare mechanisms plagued by inefficiencies and exclusions.
• UBI's universality anchors social protection in citizenship, bypassing complex bureaucratic processes and stigmatising poverty-based entitlements.
• India's current welfare system is fragmented, with issues such as leakage and duplication; a UBI could offer streamlined welfare delivery.

Economic Landscape and UBI's Potential

• India's wealth inequality is significant, with the top 1% owning 40% of national wealth, while economic growth figures do not necessarily translate to widespread prosperity.
• UBI can help address economic disparities by providing a basic income that supports employment and education, as evidenced by pilot studies showing improved nutrition, school attendance, and earnings.

Automation and the Future of Work

• Automation and AI could displace up to 800 million jobs globally by 2030, with India's semi-skilled workforce particularly vulnerable.
• A UBI could provide a financial buffer during transitions, allowing for upskilling and labor market repositioning.

Political and Philosophical Rationale

• UBI redefines the citizen-state relationship by decoupling income security from economic contribution, challenging populist politics based on transactional giveaways.
• It shifts the focus from consumerism to citizenship, empowering voters to demand systemic improvements such as better schools and governance.

Challenges and Considerations

• Concerns about inflation are unfounded if UBI is funded responsibly and supply chains remain stable.
• A minimal UBI of ₹7,620 per person per year would cost about 5% of India's GDP, necessitating potential tax increases or subsidy rationalizations.

Practical Implementation

• A phased rollout targeting vulnerable groups such as women, the elderly, and low-income workers can facilitate evaluation and infrastructure development.
• Technological access issues, such as digital literacy and bank connectivity, must be addressed to ensure UBI's effectiveness.

A UBI represents an opportunity to modernize India’s welfare architecture, moving towards a resilient, inclusive framework for the 21st century. The fundamental question is not the financial viability of UBI but the democratic costs of ignoring mass insecurity.