Aadhar & the dangerous road to Universal Basic Income

There has been a lot of discussion about Aadhar and now the matter of compulsory linkage of Aadhar to mobile and banks is being heard in the courts. However, the public discourse has almost entirely focused on surveillance. Aadhar may result in surveillance, but its purpose seems to be an enabler for Universal Basic Income. From the very beginning, Mr. Modi has been working towards a virtual and physical infrastructure to enable Direct Beneficiary Transfer (DBT).

Let us look at the various steps taken towards creating the infrastructure for DBT. One of the first major announcements by Prime Minister Narendra Modi was the inauguration of the Pradhan Mantri Jan Dhan Yojana. The scheme was aimed at a rapid expansion of banking services in rural India. Soon after, we realized that Mr. Modi and his party supported Aadhar too. While Aadhar was a key issue for him as an opposition leader, it became mandatory for citizens after 2014. Not only did it become mandatory, it was crucial to link up Aadhar cards to bank accounts and mobile phones. Sometime last year also, we witnessed the Payments Corporation of India introduce a Unified Payment Interface (UPI) and its chief vehicle, the BHIM mobile phone application. Finally, Mr. Modi has also, put emphasis on the rapid expansion of the National Fibre Optic Network (NOFN) that started under UPA II but has since then been renamed as part of Digital India. So provided we are willing to join some dots, so to speak, we can see the attempt to create a digital internet infrastructure through Digital India, Aadhar card as the crucial link – both as identifier, and link to bank and mobile phone, and finally a bank account that is connected to the circulation of capital (deposits, credits, payments and so on).

Each of these developments have been hailed or critiqued individually, and individually taken they only present a partial picture of the political objective. Seen together, there seems to be little doubt that all of this is aimed at some form of Universal Basic Income (UBI). While there are certainly problems with surveillance and privacy with Aadhar, to see it as an issue exclusively about surveillance is to miss the forest for the trees.

UBI will be a specific form of DBT where the government will transfer some amount to your bank account either on a monthly or annual basis. The exact amount is unknown but it is not very important as it is likely to be nowhere close to a real living wage. The important thing to remember is that it will be a universal basic income. This means that regardless of your current social and economic standing, as long as you have an Aadhar card, linked to a bank account and mobile number, you will receive some money transferred to your bank account.

Let us leave aside the problem that it will be almost certainly be offered as a crude sop ahead of the next general election to woo voters. Practical problems can be seen, for instance in the Universal Credit scheme introduced by the Conservative Party in the UK in 2013. Aimed at replacing several tax credits and benefits, it would supposedly mitigate housing and child support costs amongst others. Delays in payments has been a consistent problem leaving people with mere pennies in their pockets and days on end spent waiting for money to buy food. Another serious problem is that once the scheme started, over time, the Conservatives have reduced investments in particular parts of the scheme without any accountability to the people who would be affected. These two problems especially seem likely in the implementation of the UBI in India. Patchy broadband infrastructure, poor rural teledensity, a leaky Aadhar system and limited rural banking network all point out to high possibilities of delays in payments. We have noticed how Mr. Modi has threatened states that are against Vikas, and there is no guarantee that a future government with full majority may use the UBI in devious ways to exert power over states that don’t fall in line.

Marx had already outlined a general critique of such distribution, with great clarity in his response to the so-called Gotha Programme in 1875:

“Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?”

And the fundamental problem with UBI today is that it will not address any transformation in the conditions of production and therefore not in the mode of production either. We already have a situation where majority of the country is living in stark poverty and the richest 10% controls more than 75% of the total wealth – where big capital has basically cannibalised growth at the cost of the working and the middle classes over the last four decades. UBI will not address this inequality. The government (including some of the ‘softer’ allies of the BJP like Baijayant Panda from the BJD in Orissa) has already started making some arguments. Basically, their logic is that ideally UBI should go to the poor, but the cost of identifying the poor itself will be so large that it will cancel out the UBI. Therefore, it is more efficient to universalise the basic income. However, since a universalised income is too large an amount to come from direct budgetary allocation the only solution is to cut down existing social welfare schemes. All the ‘savings’ would then be pumped into UBI as a single-point measure to alleviate poverty. And since this is going be to the ace card for the next election, Aadhar becomes extremely important since it is a crucial cog in the wheel to distribute payments without corruption[1].

The idea is that the common man uses that money to then go back to the market to avail of everything from food to education and health. The privatisation of Air India, may lead to further attempts at privatisation of other vital public services[2]. The UBI opens up the way for the State to completely withdraw from its responsibility to its citizens, and position the citizen entirely at the mercy of the market. The UBI thus in a sense, commodifies the entire substance of our social contract with the State. In the short term, the UBI appears in disguise as a masterstroke towards equality in India. However, it is quite clear that it will do nothing of the sort. It will, on the contrary, provide the basis for further privatisation of public services. It will also allow unhindered growth of big capital while the middle class stagnates and the working class gets poorer.


[1] Of course there are already cases of corruption and fraud with Aadhar, not to mention cases where fingerprints don’t match over time especially with older people. The government will argue for Aadhar not on grounds of privacy but justifying intrusion of privacy on the grounds of development and poverty alleviation via UBI.

[2] The NITI Aayog has already been talking about increasing privatization in the social sector including schools, colleges, jails, public transportation etc.


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Ram Bhat Written by:

Ram is a co-founder of media and arts collective Maraa (maraa.in)

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