Can India Fund a Universal Basic Income by Taxing AI and Data Monopolies?
By 2030, AI may replace more jobs in India than it creates. But what if India could turn this disruption into a dividend for its people? The idea of a Universal Basic Income (UBI) — giving every citizen a fixed income — once sounded utopian. Now, with the explosive growth of AI and data capitalism, it’s not just feasible; it might be essential.
📉 The AI Disruption Is Already Here
AI is no longer science fiction. In India alone:
- AI-based automation is replacing customer service agents, junior analysts, and even coders.
- Predictive AI tools are cutting human decision-making in banking, agriculture, and governance.
- Platforms trained on Indian data are generating billions in revenue — mostly for companies based abroad.
While AI boosts productivity, it decimates routine jobs, especially in India’s vast services sector. White-collar unemployment may soon rival blue-collar displacement from the earlier wave of automation.
🤖 AI and Data Are the New Oil — But Who Owns the Well?
India’s 1.4 billion people generate more training data for AI models than nearly any other country. From regional languages and accents to online behavior and cultural content, Indian data powers the very AI models that threaten to replace Indian workers.
Yet, Indian citizens see none of that wealth. It’s extracted, refined, and monetized by a handful of Big Tech firms, largely headquartered elsewhere.
💡 A Radical Proposal: Use AI and Data Wealth to Fund UBI
Imagine if India taxed AI productivity gains and data monetization, then redistributed that wealth back to the people in the form of a Universal Basic Income.
Not charity — dividends for those whose data and labor built the system.
Here’s how it could work:
🔹 1. Tax AI-Driven Productivity Gains
As AI boosts profits in IT, banking, pharma, and logistics, India could introduce:
- Windfall taxes on AI-fueled superprofits.
- A “robot tax”: Firms that replace humans with AI would pay the equivalent payroll tax.
- AI automation surcharge in industries seeing large-scale labor replacement.
If 1 million jobs are replaced, but firm profits grow by ₹10,000 crore, even a 10% tax brings ₹1,000 crore annually.
🔹 2. Monetize India’s Data Sovereignty
India is the world’s largest untapped AI data market. The government could:
- Introduce a Data Royalty Framework: Companies training models on Indian datasets must pay per capita license or access fees.
- Implement Data Sovereignty Laws: Like Europe’s GDPR, ensuring consent and value-sharing.
- Use Digital Public Infrastructure (Aadhaar, UPI, ONDC) as a negotiation tool — giving private players access only if they contribute back.
With smart enforcement, even a ₹50/year per user data royalty could generate ₹7,000+ crore annually.
🔹 3. Use AI to Eliminate Welfare Leakages
India spends billions on PDS, pensions, and subsidies. AI can help:
- Eliminate ghost beneficiaries.
- Identify overlapping schemes.
- Target funds efficiently through Direct Benefit Transfer (DBT).
If even 10% leakage is plugged, savings could fund a starter UBI for the poorest 30%.
🔹 4. Begin with a Modest, Tiered UBI
Start small:
- ₹1,000/month for adults below the poverty line (BPL).
- Phase-wise expansion to universal coverage over 5–7 years.
- Merge existing cash schemes into one efficient UBI pipeline.
Cost estimate: ₹1,000 × 900M people/year = ₹10.8 lakh crore (3.5% of GDP).
Fundable with:
- AI/data taxes (1.5% GDP)
- Welfare savings (1–1.5%)
- Other progressive taxes (carbon, digital fees)
📊 What Would It Achieve?
- Protect against AI-induced mass unemployment
- Boost consumer demand in rural & urban poor sectors
- Reduce extreme poverty without massive bureaucracy
- Ensure India benefits from the AI boom, not just enables it
🛑 Challenges
- Tracking AI productivity gains is hard.
- Tax enforcement on global Big Tech is tougher.
- Political resistance from industry and fiscal conservatives.
But the cost of inaction is greater: widening inequality, social unrest, and being a digital colony in the AI age.
✅ The Way Forward
India can lead the Global South in showing how to humanize the AI transition. By taxing AI superprofits and reclaiming control over our data, we can build a tech-powered welfare state — not just for survival, but dignity and inclusion.
“We missed the first industrial revolution. Let’s not miss the AI revolution — or leave our people behind.”
