Making out a case for the other UBI in India


It took the COVID-19 pandemic to expose the precariousness of human society across the world. As the importance of social security came into focus after the major waves of the pandemic, the debate on universal basic income (UBI) began to resurface in policy circles across the globe.

However, there is another UBI that needs to be examined in the Indian context, i.e., universal basic insurance.

Universal basic income (UBI) is a government program in which every adult citizen receives a set amount of money regularly. The goals of a basic income system are to alleviate poverty and replace other need-based social programs. Its underlying idea is that every person should have a right to a basic income to cover his needs, just by virtue of being a citizen.
 Economic Survey of India 2016-17 has advocated the concept of UBI as an alternative to the various social welfare schemes in an effort to reduce poverty.

Universal Basic Insurance:

It refers to the subscription of all citizens to some form of insurance covering their basic necessities or emergencies. It is a concept related to security nets.

Types of security nets:

  • Income shocks result in a free fall of those living on the line of basic living wages (say line 1) down towards the critical survival line (say line 2).
  • In any case, a fall that is further below line 2 needs to be prevented as it can be catastrophic — a household can end up facing a poverty trap. Social security systems are like a safety net placed at line 2.

These social security nets can be of three types.

  1. The first is a passive safety net which catches those falling from line 1 and prevents a fall below line 2.
  2. The second is an active safety net which works like a trampoline so that those who fall on it are able to bounce back to line 1.
  3. The third is a proactive safety net which acts like a launchpad so that those who fall on it will not only bounce back but will also move up beyond line 1. 
  • The first type of safety net is basically a social assistance programme meant for the most income-deprived sections of society.
  • The second type of safety net is a scheme with a higher outlay.
  • The third type of social security net is the most desirable option but requires immense resources and institutional capacity.
  • For social security, people on the south end of the income line need social assistance schemes. Those on the north end of the income line should have voluntary insurance.

Social security:

  • Social security mainly encompasses food security, health security and income security. India operates the widest spectrum of social security schemes which cater to the largest number of people than any other country. The sheer scale of Indian social security programmes delivered to millions of households spread over a vast geography is mind-boggling.
  • The Indian food security programme, for example, has over 800 million beneficiaries being provided heavily subsidised food grain under the National Food Security Act (NFSA).
  • The NFSA is the world’s largest food security programme. About 120 million children are provided free lunch under the Mid-Day Meal Scheme.
  • In addition, some 50 million people benefit from the free meals programme run by a few State governments. Nevertheless, there are issues of financial sustainability and leakages in the food security programme.

For health and income

On the health security front, for the unorganised sector, there is the Ayushman Bharat Scheme of the central government with over 490 million beneficiaries.

Ayushman Bharat-PMJAY is the world’s largest health insurance/ assurance scheme fully financed by the government.It offers a sum insured of Rs.5 lakh per family for secondary care which doesn’t involve a super specialist as well as tertiary care which involves a super specialist. Under PMJAY, cashless and paperless access to services are provided to the beneficiaries at hospitals. Health Benefit Packages covers surgery, medical and day care treatments, cost of medicines and diagnostics.

In the organised sector, the Central government runs the Employees State Insurance Corporation (ESIC) and Central Government Health Scheme (CGHS) catering to 130 million and four million beneficiaries, respectively.

Employees’ state Insurance Corporation of India (ESIC) is a social security system which provides socio-economic protection to the worker population and immediate dependent or family covered under the ESI scheme. The Employees’ State Insurance Scheme (ESI) is an integrated measure of social Insurance embodied in the Employees’ State Insurance Act, 1948. ESI is designed to accomplish the task of protecting employees against the impact of sickness, maternity, disability and death due to employment injury and to provide medical care to insured persons and their families.

Health insurance schemes run by various State governments cover about 200 million people. Only about 110 million people in India have private health insurance.

Despite these large-scale provisions, about 400 million Indians are not covered under any kind of health insurance.

Income security:

For the organised sector, there are three types of provident fund schemes:

  1. General Provident Fund (GPF) which is availed by about 20 million Central and State government employees in the country.
  2. Employees’ Provident Fund (EPF) which is availed by about 65 million workers in the other organised sector.
  3. Public Provident Fund (PPF) that can be availed by any Indian citizen but has contributions from the organised sector mostly.

There are about 53 million New Pension Scheme (NPS) subscribers in the country (about 2.2 million in the Central government, 5.6 million in the State government and the rest in the private sector).

Case for targeted basic income:

  • In the unorganised sector, the Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) and the PM-KISAN scheme is availed by about 120 million farmers. Atal Pension Yojana (APY) benefits 40 million people.
  • Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SYM) has about five million beneficiaries while there are about 50,000 beneficiaries under the National Pension Scheme for Traders and Self-Employed Persons (NPS-Traders) scheme.
  • The largest unorganised sector income security programme is the scheme under the Mahatma Gandhi National Rural Employment Guarantee Act/ NREGS which has about 60 million beneficiaries.
  • Thus, out of 500 million workers in India, about 100 million have no income security (pension, gratuity or other income) coverage. Proponents of universal basic income cite the informality of the Indian economy as the hurdle in rolling out schemes such as unemployment insurance in the country. However, besides huge fiscal implications (around 4.5% of GDP), the proposal of universal basic income runs the risk of implementation failure due to large-scale beneficiary identification requirements.

Why UBI:

Universal basic insurance is a better proposition for two reasons.

  1. The insurance penetration (premium as a percentage of GDP) in India has been hovering around 4% for many years compared to 17%, 9% and 6% in Taiwan, Japan and China, respectively.
  2. Though the economy largely remains informal, data of that informal sector are now available both for businesses (through GSTIN, or Goods and Services Tax Identification Number) and for unorganised workers (through e-Shram, which is the centralised database of all unorganised workers).

As a result of the recent initiatives by the Government, the Goods and Services Tax (GST) portal has 13.5 million registrations and the e-Shram portal has over 280 million registrations. As a prototype of a social security portal based on such data, the social registry portal, ‘Kutumba’, developed by Karnataka is available as a blueprint.


Till the Indian economy grows to have adequate voluntary insurance, social security can be boosted through the scheme of universal basic insurance.

Heading the G20 and New Delhi’s choices


  • India will assume for the first time the Group of 20 (G20) year-long presidency from December 1, 2022 to November 30, 2023, culminating with the G20 Summit in India in 2023.
  • India has hosted large international conferences such as the Non-Aligned Movement (NAM) summit in 1983 and the Third India-Africa Forum summit in 2015. But nothing compares with hosting the G20. It is the world’s informal steering directorate on global economic issues; it entails the responsibility of shaping decision-making on key challenges facing the world today; and its summit is preceded by a large quantum of preparatory deliberations that feed into the final outcome.

About G20:

  • Group of 20 or G20 is an annual meeting of leaders from the countries with the largest and fastest-growing economies.
  • It is an advisory body, not a treaty-based forum and, therefore, its decisions are recommendations to its own members.

History of G 20:

  • After the Asian Financial Crisis in 1997-98, it was acknowledged that the participation of major emerging market countries is needed on discussions on the international financial system, and G7 finance ministers agreed to establish the G20 Finance Ministers and Central Bank Governors meeting in 1999.
  • Amid 2008 Financial Crisis the world saw the need for a new consensus building at the highest political level. It was decided that the G20 leaders would begin meeting once annually.
  • Gradually the scope of G 20 summits widened to encompass other issues as well, including political, strategic and security related issues faced by the world and the member countries.

Members of the G20:

Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States and the European Union.

Presidency: Every year in December, a G20 country from a rotating region takes on the presidency for 1 year.

Working of G 20:

It is divided into two tracks:

  1. Finance track comprises all meetings with G20 finance ministers and central bank governors and their deputies. Meeting several times throughout the year they focus on monetary and fiscal issues, financial regulations, etc.
  2. Sherpa track focuses on broader issues such as political engagement, anti-corruption, development, energy, etc.
Each G20 country is represented by its Sherpa– an official who plans, guides and implements the ideas and proposals on behalf of the leader of their respective country. Sherpas do all the groundwork before the leaders take decisions.

Significance of the G20:

The G20 membership represents:

  1. nearly 90% of the world’s GDP
  2. 80% of global trade
  3. 67% of the planet’s population. The weight of this powerful membership carries enormous political and economic influence.

The representation of the United Nations, the World Bank, the International Monetary Fund, the World Trade Organization, the World Health Organization, and other multilateral institutions in it makes the G20 a truly global body.

Performance of G 20:

  • The G20 has played a vital role in addressing financial and economic challenges such as the global financial crisis of 2008-09 and the Eurozone crisis of 2010.
  • The forum was elevated from the finance ministers to the heads of government/state in 2008. This was the era of the G8 (up to 2014 when Russia was suspended), of the major powers — the United States, the EU, Russia, and also China, but they needed to work together with the emerging economies in defining global challenges and crafting their solutions.
  • However, in this second decade of the G20, the forum is faced with an existential crisis, where the major powers have fallen out. It makes the task of the presidency country much more complicated.

G 20 after 2020:

  • The disastrous impact of the novel coronavirus pandemic, the war in Ukraine, India-China border tensions, EU/U.S.-Russia hostility, and deteriorating U.S.-China relations are already visible in the run-up to the 2022 Bali summit (in November) where all G20 leaders may not be sitting physically in the same room.
  • The outcome in Bali will affect the Delhi summit. Indian officials are thus carefully planning their strategy as the burden and the prestige of the presidency are bestowed on India. Their mission will be not only to save the G20 but also the future of multilateral cooperation in diverse domains of the grouping’s multi-dimensional agenda.

Way forward: India’s choices:

Guided by the triple motivation of promoting India’s national interest, leaving its mark on the G20, and maintaining its primacy as an effective instrument of global governance, different ideas have emerged in New Delhi.

1. Brand India:

  • G20 presidency offers a unique branding opportunity for India’s recent achievements, including the ability to combat COVID-19 effectively at home and abroad through vaccine aid and diplomacy.
  • Other major achievements are India’s digital revolution, its steady progress in switching to renewables, meeting its targets to counter climate change, and its push for self-reliance in manufacturing and reshaping global value chains.
  • New trends in entrepreneurship, business innovation, the rise of many start-ups as unicorns, and gender progress too need to be showcased.

2. Infrastructure push:

It can also be utilised to transform India’s sub-optimal physical infrastructure to create an attractive investment and tourism destination, especially as several important G20 meetings will be hosted outside Delhi.

3. Rise of democratic nations from the global south:

4 democracies on the path to becoming powerful economic players — Indonesia, India, Brazil, and South Africa — hold the presidency from December 2021 to November 2025. This offers a rare opportunity for synergy and solidarity to advance the interests of the developing world and to assert their combined leadership of the Global South.

4. Role of BRICS & IBSA:

  • Another coincidence is that all three members of IBSA — India, Brazil, and South Africa — will hold the G20 presidency consecutively in 2023, 2024, and 2025.
  • This forum, insulated from the geopolitical pressures constraining the BRICS (where these three countries are required to work with Russia and China), can develop a cohesive plan to project the priority concerns of the Global South.

5. India as a global leader:

  • India needs to get ready to emerge as the chief global diplomat. As the G20 president, India will be obliged to take a broader view of the G20 agenda to synthesise divergent interests of all constituents of the forum: five permanent members of the UN Security Council, the developed world united under the flag of the G7, five members of BRICS, and other G20 members such as Argentina and Mexico.
  • More importantly, as the president and host, India should factor in the perspectives of countries not represented in the G20. India will advocate an inclusive approach, with pragmatic and human-centric solutions to global issues.
  • An important aim should be to end Africa’s marginalisation by elevating the African Union (AU) from permanent observer to a full-fledged member of the G20, thus placing it on a par with the EU.


The challenge is to combine an India-focused view, promote the vital interests of the Global South, and demonstrate diplomatic acumen to communicate with and reconcile the viewpoints of rival and adversarial power centres such as the West, Russia, and China. India today is in the enviable position to deliver this unique package. It must rise to the occasion.


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