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Introduction

Universal Basic Income (UBI) is a regular, unconditional cash transfer to every citizen, aimed at ensuring basic economic security and dignity. In a country like India, with fragmented welfare systems and rising inequality, UBI offers a simpler, rights-based model of social protection. It promises empowerment but also raises fiscal and structural concerns.

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How UBI Empowers Citizens by Ensuring Financial Autonomy

• Reduces Poverty and Inequality: UBI provides a steady income floor, narrowing the wealth gap where the top 1% owns 40% of national wealth.
  Eg: The World Inequality Database (2023) reported India’s wealth Gini at 75.
• Promotes Economic Security and Dignity: Direct cash transfers remove bureaucratic hurdles and ensure financial stability.
  Eg: SEWA’s UBI pilot in Madhya Pradesh (2011–13) improved nutrition, education, and income.
• Supports Informal and Gig Workers: It cushions income shocks from automation and irregular work patterns.
  Eg: A gig worker can still afford essentials even during low-demand periods through UBI.
• Encourages Women’s Economic Participation: Recognising unpaid care work enhances women’s autonomy and household decision-making.
  Eg: SEWA’s study found women spent more on children’s education and nutrition with direct transfers.
• Strengthens Democracy and Reduces Populism: Decouples welfare from political freebies, promoting accountability and rights-based governance.
  Eg: UBI shifts focus from “vote for benefits” to “demand good governance.”

How UBI Can Lead to Fiscal Strain and Dependency

• High Fiscal Burden: Covering all citizens could cost around 5% of India’s GDP, straining public finances.
  Eg: A UBI of ₹7,620 per person annually would need large fiscal reallocation.
• Potential Inflationary Pressures: More cash without higher production can raise prices of basic goods.
  Eg: Critics warn of localised inflation in rural areas.
• Reduced Labour Incentives: Regular income may discourage some from working, especially in informal jobs.
  Eg: Younger workers might opt out of low-paying jobs if guaranteed income exists.
• Resource Misallocation: Universality could benefit the rich too, weakening redistribution.
  Eg: Higher-income households would also get transfers, reducing fiscal efficiency.
• Administrative and Technological Gaps: Poor digital access may exclude remote and tribal areas.

Conclusion

UBI can empower citizens and strengthen the social safety net if implemented with fiscal care. A phased rollout for women, elderly, and informal workers can test its feasibility. Combined with investment in jobs, education, and health, UBI can balance autonomy with accountability, a modern step toward inclusive welfare.

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