[Answered] Critically analyze the proposition to place Universal Basic Income (UBI) at the centre of India’s welfare architecture. Justify its necessity in addressing a crisis-ridden world.

Introduction

Rising inequality, job-displacing automation, and climate-linked distress threaten economic security. With India’s top 1% owning 40% of wealth (WID, 2023), placing Universal Basic Income at the welfare centre demands urgent evaluation.

UBI at the Centre of Welfare Architecture: A Critical Analysis

1. India’s welfare architecture is extensive—over 1,000 centrally sponsored schemes—yet plagued by leakages, duplication, and exclusion errors.
2. As per an IMF study (2019), almost 40% of benefits in targeted schemes fail to reach beneficiaries.
3. In such a fragmented ecosystem, UBI offers a simple, rules-based, unconditional cash transfer to every citizen, replacing paternalism with autonomy.

Why UBI? The context of a crisis-ridden world

1. Wealth and income inequality: World Inequality Database (2023): Wealth Gini at 75, highest since Independence. Top 10% hold 77% of national wealth. GDP growth (8.4% in 2023–24) has not led to shared prosperity. Nobel laureate Joseph Stiglitz argues GDP does not measure equity or well-being. India’s rank 126/137 in the World Happiness Report (2023) reveals precarity beneath high growth.
2. Automation and job loss: McKinsey Global Institute warns 800 million jobs globally may be displaced by 2030. India’s workforce—80% informal—is especially vulnerable.

1. Gig economy precarity: NITI Aayog (2022): Gig workers to reach 2.35 crore by 2030. No job security, no insurance, no benefits. A periodic cash transfer stabilizes household consumption and preserves dignity.
2. Climate-driven volatility: IPCC: India loses 1% of GDP annually to climate-linked shocks. UBI can act as “shock-responsive social protection.”

Economic Rationale: Not charity, but investment

Pilot experiments prove UBI improves human capital.

UBI does not reduce willingness to work — a key misconception disproved globally.

How UBI strengthens India’s welfare state

1. Universality avoids exclusion error: Targeting creates errors; universality prevents “wrongful exclusions.” Aadhaar–DBT–Jan Dhan trinity makes real-time transfers feasible.
2. Restores dignity and autonomy: Shifts welfare from conditional patronage to rights-based entitlement.
3. Corrects gendered invisibility of labour: A UBI acknowledges unpaid domestic work, performed largely by women. Tamil Nadu’s ₹1,000/month entitlement for women is a step toward gendered UBI.
4. Reduces political populism: UBI can curb competitive “freebie politics,” shifting governance from clientelism to citizenship accountability.

Concerns and Caution

1. Fiscal space: A UBI matching the poverty line (~₹7,620/year/person) costs 5% of GDP.
   Funding options: Rationalise non-merit subsidies (Economic Survey 2016–17), Wealth tax on top 1% and Carbon tax framework.
2. Universality vs. targeting: A phased approach: begin with women, elderly, disabled, and gig workers. UBI must complement, not replace essential public services like MGNREGA, PDS.

Conclusion

As Amartya Sen asserts, development expands freedoms. UBI offers economic security amid automation and inequality—building a resilient, citizen-centric welfare state capable of protecting dignity in uncertain futures.