Could AI usher in the advent of Universal Basic Income for India?
Photo: Karan Madhok
As the promises and threats of artificial intelligence signal a radical economic and social upheaval worldwide, Vipin Labroo argues why India may need to consider a fanciful UBI programme.
There is a growing pall of gloom spreading across the world on account of what many people believe is the impending decimation of jobs across industries, owing to the spread of new age Artificial Intelligence technologies. Nowhere does this stoke more fear than in the most populous country in the world, India, with over 1.40 billion souls to feed. The tech sector, for example, which was known to absorb and provide for large numbers of young, educated Indians, has seen a massive recent shift: Many leading Indian technology companies, like TCS, Infosys, and Wipro, have slowed down hiring for entry-level jobs on account of the increased use of AIs for carrying out coding and testing work, possibly wrecking the tech career dreams of its aspirants forever.
The starkness of the situation can be further gauged by the fact that the top five Indian IT companies hired only 17 employees in the first nine months of the financial year 2025-2026—an abysmal low when compared to the 17,764 people hired in the preceding year.
The Indian technology sector, like its overseas counterparts, is enthused by the advent of artificial intelligence, as it promises to usher in unprecedented efficiency in the production of goods and rendering of services. This, in their view, will lead to a state of super profitability. According to global consultancy firm PWC AI will contribute as much as $607 billion to the Indian economy by 2035 impacting sectors like agriculture, healthcare, education and manufacturing.
Going forward, one will have to watch how many jobs this process destroys and how many it creates for the labour-intensive Indian economy. At the same time, the increase in productivity that will likely be ushered in by AI may substantially enhance the tax revenue earned by the state. This will in turn allow the government to possibly think of providing the safety net of a universal basic income [UBI] to those who may become unemployed owing to the rising adoption of AI.
Is it truly possible for AI to be leveraged by a handful of corporations and individuals to generate revenue for the government in the proposed UBI plan? Or is it a fanciful dream that one could only laugh at, given the size of the Indian population and its immense, innumerable complications?
The concept of UBI in the shape of regular cash payments to individuals without means in India was proposed in the 2016-2017 Economic Survey as a social welfare scheme for the government to consider. In The New Indian Express, Anand Neelakantan argued that automation and AI are slated to devour millions of low skill jobs in India, adding that “Our much-touted demograhic dividend is about to curdle into a demographic nightmare.”
I believe that the social upheaval that AI promises to cause can only be mitigated by implementing a UBI programme, which transfers hard cash into the bank accounts to the deserving. In theory, this process could be rolled out quite effectively as most Indians now have bank accounts. The experience of incorporating united payments interfaces [UPIs] has shown that the state could pull off a UBI scheme logistically, too. This could be funded by removing inefficient subsidies and imposing a high wealth tax on the super-rich. Given that these are the people who will make the big profits from the widespread adoption of AI, this is perhaps an idea whose time has come.
But is it truly possible for AI to be leveraged by a handful of corporations and individuals to generate revenue for the government in the proposed UBI plan? Or is it a fanciful dream that one could only laugh at, given the size of the Indian population and its immense, innumerable complications?
I feel that there seems to be an inevitability with regard to a few organisations reaping the most benefit from highly advanced AI systems, while rendering most people unemployable. Wouldn’t it make sense for their wealth to be suitably taxed and distributed amongst the Indian masses? At the same time, AI can undoubtedly be used to better people’s lives by improving healthcare and infrastructure, as well as tackling environmental and social problems.
This is the most populous country in the world, with slightly less than half of its population being under the age of 25. Skilling them and finding employment for them is one of the most pressing issues facing the nation. Already, large numbers of Indian youth spend hours consuming content on their smartphones, and in many cases, creating content. This keeps their restless minds occupied as they seek purpose. The desire and ability of young people to find meaning in life through work have defined human civilisation since the earliest times. The inexorable rise of AI, unfortunately, threatens to upend this long-held certainty.
How many of these young people will find employment in traditional industries and services, seeking to use advanced AI to stay competitive and relevant? How many will be able to acquire the skills and know-how required of an employee able to perform a role that requires cutting-edge AI knowledge? Surely, not everyone will be able to make the cut. So why not provide the unemployable with an UBI and encourage them to pursue things that interest them, like sports, travel, social work, cultivating hobbies, and creating art.
Initially, the income may be enough to allow citizens to live with some level of basic comfort, even as they try to figure out how to find a way of obtaining employment as an added supplement. As AI gets fully entrenched, it might become possible to further enhance UBI, setting people free to follow wherever their heart leads.
Companies around the world are betting on the AI revolution. Amazon, Microsoft, Meta and Google are investing as much as nearly $700 billion in AI infrastructure in 2026. There is every indication that in India, too, they will leverage AI to grow its businesses and their ability to profit in unimaginable ways. Indian tech giants including Wipro, TCS, Infosys and Tech Mahindra plan to become major integrators of AI into their systems.
There have been some loud pushback. According to Infosys’ co-founder Nandan Nilkeni, AI in the Indian context may lead to the concentration of wealth and power, and one would be well advised to use it to promote things like healthcare and education instead of participating in a vicious AI race. While Nilkeni may have doubts about AI as a harbinger of social good in the country, there is a certain inevitability about its enhanced deployment across industries and sectors. If we were to accept his argument, that such a move would lead to a concentration of power and wealth with a few, rolling out a UBI program funded by high taxation on such entities and individuals might be the only way forward.
It may be inconceivable now, but the time may not be far when UBI will be part of the manifestos of mainline Indian political parties, in a way that is quite similar to the freebies offered around election time. The party that offers a higher UBI will be able to carry the day.
It may be inconceivable now, but the time may not be far when UBI will be part of the manifestos of mainline Indian political parties, in a way that is quite similar to the freebies being offered around election time. The party that offers a higher UBI will be able to carry the day. The ability of super-efficient businesses to generate unimaginable wealth by today’s standards will likely make this possible. The major corporate behemoths would do well to sign on and support this initiative as a nation with a restive youth population would not really be able to progress in the best possible manner.
Besides, it is in the government’s and political parties’ own self-interest to keep both the industrialists and the masses in their good books. Encouraging industries to adopt the best that AI has to offer, even while encouraging them to share generously from the larger profits, will be a win-win for all.
The Scandinavian countries, with their high tax rates, have provided a template for a welfare state that looks after everybody on the back of high taxation. Denmark at 59.43% personal income tax rate and Sweden at 52% personal income tax are fine examples of this. Both of these states are known to provide a slew of welfare benefits that take care of the education and healthcare needs of the people. Besides, they receive high unemployment support, resulting in relatively low income inequality.
Replicating such a model in a country like ours with its humongous population would undoubtedly be a huge challenge. However, an AI run industrial eco-system that helps increase the profitability of Indian businesses may allow the state to generate enough tax revenues to provide generous universal income pay-outs. This would be very different from the typical Scandinavian welfare model and could define a whole new paradigm of a post-capitalist economic system, best suited to the needs of the people of India.
The model will, of course, be imperfect. The success of such a massive tax-funded UBI rollout could get mired in the high level of corruption and lack of transparency that the Indian taxation system has long suffered from. The past track record in this sector is one that includes offering tax breaks to the very rich and spending colossal amounts of money on grandiose vanity projects, focusing more, for example, on the matters of religion than affairs of the state. Besides, the global geo-strategic situation coupled with India’s own superpower aspirations has seen the defence budget touch astronomical levels, reducing the much-needed budgetary outlays for social and societal good.
Howsoever efficient the tax collection system may become, the purse-strings will ultimately rest with self-serving politicians, with their own axes to grind. Great care will have to be taken to ensure that any roll-out of such an ambitious UBI project has factored in all the possible bottlenecks, hurdles and hindrances that might prevent it from becoming a success. It could become an essential step in ensuring that it works largely for the greater good of the common Indian people.
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Vipin Labroo is a content creator, author and PR consultant. A member of the Nonfiction Authors Association, he has years of corporate experience working with an eclectic range of clients, writing press releases, articles, blogs, white papers, research reports, website content, eBooks and so on across segments like technology, business & marketing, internet marketing, healthcare, fashion, real estate, travel and so on. You can find him on Twitter: @labroovipin and Instagram: @vipin_labroo.
