{"id":58730,"date":"2025-11-08T19:00:41","date_gmt":"2025-11-08T13:30:41","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=58730"},"modified":"2025-11-10T13:17:59","modified_gmt":"2025-11-10T07:47:59","slug":"universal-basic-income-4","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/08-11-2025\/universal-basic-income-4","title":{"rendered":"Universal Basic Income (UBI) &amp; India\u2019s Welfare Architecture"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy; <\/strong><strong>Financial Inclusion<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The idea of a <strong>Universal Basic Income (UBI) <\/strong>is now emerging as a pragmatic policy imperative, as India grapples with widening inequality, technological disruption, and persistent welfare inefficiencies.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Universal Basic Income (UBI)?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Universal Basic Income (UBI) is a <strong>social welfare policy proposal<\/strong> under which every citizen receives a regular, unconditional cash transfer from the government, ensuring a minimum standard of living and social security.<\/li>\n\n\n\n<li>Its<strong> core principles<\/strong> include:\n<ul class=\"wp-block-list\">\n<li><strong>Universal:<\/strong> Given to all citizens, irrespective of income level, employment status, or wealth.<\/li>\n\n\n\n<li><strong>Unconditional:<\/strong> No preconditions such as work requirement, asset ownership, or means testing.<\/li>\n\n\n\n<li><strong>Periodic:<\/strong> Paid at fixed intervals (monthly, quarterly, etc.), not as a one-time grant.<\/li>\n\n\n\n<li><strong>Cash Payment:<\/strong> Delivered directly in cash or through bank transfer, allowing people to spend according to their needs.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Makes UBI Different From Other Welfare Schemes?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Traditional welfare programs rely on complex eligibility criteria, circumstances and bureaucratic proof of need.\n<ul class=\"wp-block-list\">\n<li>However, UBI focuses on every citizen, regardless of income or employment status, receiving a periodic cash transfer.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>UBI\u2019s universality eliminates the stigma of \u2018being poor enough\u2019 and prevents the exclusion errors that plague targeted schemes.\n<ul class=\"wp-block-list\">\n<li>It ensures that no one is left behind due to administrative inefficiency or arbitrary eligibility filters by providing a <strong>basic floor of income security.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Rationale \/ Need for UBI in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Job Displacement:<\/strong> Automation, AI, and robotics threaten traditional employment. For example: McKinsey projects 800 million jobs could be lost globally by 2030.<\/li>\n\n\n\n<li><strong>Precarious Work &amp; Inequality:<\/strong> Gig economy lacks social security. India\u2019s top 1% owns 40% of the wealth (World Inequality Database 2023).<\/li>\n\n\n\n<li><strong>Administrative Inefficiency: <\/strong>Fragmented welfare architecture with duplication and leakage. UBI via Aadhaar-linked DBT can streamline delivery.<\/li>\n\n\n\n<li><strong>Economic Stabilizer:<\/strong> Increases purchasing power and demand during economic downturns.<\/li>\n\n\n\n<li><strong>Social &amp; Psychological Well-being:<\/strong> Reduces stress, improves nutrition and education (as seen in SEWA pilot in Madhya Pradesh).<\/li>\n\n\n\n<li><strong>Moral and Gender Justice:<\/strong> Recognizes unpaid care work (mostly by women) as an economic contribution.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges and Considerations<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Inflation: <\/strong>Historical evidence contradicts the claim that UBI triggers runaway inflation.\n<ul class=\"wp-block-list\">\n<li>Major inflations occur due to production collapse or external debt crises \u2014 not from moderate income transfers.<\/li>\n\n\n\n<li>If <strong>funded prudently<\/strong>, UBI <strong>stabilizes demand<\/strong> and prevents hardship without price spirals.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Fiscal Feasibility: <\/strong>A minimal UBI equal to the poverty line (\u20b97,620 per person annually) would cost about <strong>5% of GDP<\/strong>.\n<ul class=\"wp-block-list\">\n<li>Funding can be achieved by <strong>rationalizing subsidies<\/strong>, introducing <strong>progressive taxation<\/strong>, and <strong>phasing implementation<\/strong> \u2014 beginning with vulnerable groups like women, the elderly, and persons with disabilities.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Technological and Access Challenges: Inclusion gaps<\/strong> persist in remote and tribal regions despite digital advances.\n<ul class=\"wp-block-list\">\n<li>Ensuring <strong>universal access to banking, mobile connectivity, and financial literacy<\/strong> will be critical before full-scale rollout.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Evidence From India and Beyond<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pilot programs in <strong>Madhya Pradesh (2011\u201313)<\/strong> led by <strong>SEWA<\/strong> demonstrated measurable gains: improved nutrition, school attendance, and small enterprise growth.<\/li>\n\n\n\n<li>Similar global trials \u2014 from <strong>Finland to Kenya<\/strong> \u2014 have found <strong>better mental health, <a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/04-11-2025\/shift-food-to-nutrition-security\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/ca\/current-affairs\/04-11-2025\/shift-food-to-nutrition-security\">food security<\/a>, and no decline in work participation<\/strong>.\u00a0<\/li>\n\n\n\n<li>These results suggest that a well-designed UBI can enhance both social and economic outcomes.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Case for UBI in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Administrative and Moral Efficiency: <\/strong>India\u2019s welfare architecture, though vast, remains <strong>fragmented and leak-prone<\/strong>.\n<ul class=\"wp-block-list\">\n<li>Multiple overlapping schemes lead to duplication and exclusion. A UBI, enabled by mature digital platforms like <strong>Aadhaar<\/strong> and <strong>Direct Benefit Transfer (DBT)<\/strong>, can streamline welfare delivery.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Inequality Beyond the Headlines: <\/strong>The <strong>World Inequality Database (2023)<\/strong> reports India\u2019s <strong>wealth Gini coefficient at 75<\/strong> \u2014 with the top 1% owning 40% of national wealth.\n<ul class=\"wp-block-list\">\n<li>The apparent prosperity reflected in GDP growth (8.4% in 2023\u201324) conceals deep divides, evident in<strong> India\u2019s 126th rank on the World Happiness Index<\/strong>.<\/li>\n\n\n\n<li>A UBI, by distributing purchasing power more equitably, can <strong>reconnect economic growth with human wellbeing<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>From GDP to Genuine Prosperity: <\/strong>As Nobel laureate <strong>Joseph Stiglitz<\/strong>, GDP alone does not measure wellbeing or justice.\n<ul class=\"wp-block-list\">\n<li>A modest, unconditional transfer to every Jan Dhan account can <strong>reignite local demand<\/strong>, stabilizing consumption for millions living paycheck to paycheck.<\/li>\n\n\n\n<li>Growth, then, becomes tangible \u2014 <strong>visible in kitchens, not just spreadsheets<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Redefining the Citizen-State Relationship: <\/strong>UBI aims to transform the citizen\u2019s relationship with the state from one of dependency to one of rights.\n<ul class=\"wp-block-list\">\n<li>By decoupling welfare from political patronage, UBI <strong>weakens populist \u2018freebie\u2019 politics<\/strong> and restores accountability to governance.<\/li>\n\n\n\n<li>Citizens become <strong>participants, not petitioners<\/strong> \u2014 empowered to demand better schools, healthcare, and ecological responsibility.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Not a Cure-All, but a Foundation: <\/strong>A UBI will not replace public investment in <strong>health, education, or infrastructure<\/strong>, but it can form a <strong>secure base<\/strong> upon which citizens build productive lives.\n<ul class=\"wp-block-list\">\n<li>It recognizes <strong>unpaid care work<\/strong>, largely done by women, as a vital economic contribution \u2014 embedding <strong>gender justice<\/strong> into welfare design.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A universal basic income is <strong>not a luxury but a necessity, i<\/strong>n an age of deepening insecurity, automation, and inequality, and the foundation of a renewed social contract.<\/li>\n\n\n\n<li>India can reimagine the 21st-century welfare state by embedding <strong>universality, dignity, and autonomy<\/strong> into welfare policy \u2014 not as a patchwork of schemes, but as a <strong>guarantee of shared citizenship<\/strong>.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q]<\/strong> Examine the feasibility of implementing Universal Basic Income (UBI) in India considering fiscal, administrative, and political constraints.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/www.thehindu.com\/opinion\/lead\/redraw-welfare-architecture-place-a-universal-basic-income-in-the-centre\/article70249225.ece\" target=\"_blank\" rel=\"noopener\">Source: TH<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2025\/11\/UPSC-Editorial-Analysis-8-November-2025.PDF.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The idea of a Universal Basic Income (UBI) is now emerging as a pragmatic policy imperative, as India grapples with widening inequality, technological disruption, and persistent welfare inefficiencies.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-58730","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/58730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=58730"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/58730\/revisions"}],"predecessor-version":[{"id":58784,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/58730\/revisions\/58784"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=58730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=58730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=58730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}