The Pradhan Mantri Viksit Bharat Rozgar Yojana marks a significant intervention in employment-linked policy design. By providing a one-time grant of Rs 15,000 to first-time employees in the private sector, the scheme functions as an incentive mechanism that reduces hiring frictions and lowers the marginal cost of labour absorption for firms.
Labour market indicators highlight the need for job schemes to be complemented by broader measures that can address deeper structural vulnerabilities. The Periodic Labour Force Survey (August 2025) recorded overall unemployment at 5.1%; yet youth unemployment was far higher at 18% in urban India and 13% in rural areas. Adding to the concern is India’s labour force participation rate, which, the International Labour Organization estimates, is at 56%, significantly lower than those of China (65%), Indonesia (67%), and Bangladesh (62%). In labour economics, such persistent gaps risk creating the hysteresis effect wherein prolonged joblessness among the young reduces future employability and earnings potential.
A parallel income security mechanism is essential to safeguard India’s demographic dividend. Employment-linked schemes stimulate workforce entry but they cannot shield households from disruptions driven by automation, climate transitions, and global macroeconomic shifts. In this context, the idea of a quasi-universal basic income emerges as a stabilising complement within India’s welfare architecture. The Economic Survey of 2016-17 had explored the feasibility of a quasi-UBI, suggesting that near-universal transfers could be achieved within the fiscal envelope of existing subsidies.
The distinction between cash transfers and in-kind subsidies is fundamental. In-kind subsidies often create allocative inefficiencies and suffer from leakages as benefits are tied to specific goods and mediated by multiple layers of administration. Cash transfers provide households with flexibility, reduce transaction costs, and act as automatic stabilisers during downturns. Households at the lower end of the income distribution exhibit very high marginal propensities to consume, ensuring that every rupee transferred recycles quickly into demand. This was evident during the Covid-19 pandemic when direct benefit transfers under the Pradhan Mantri Garib Kalyan Yojana cushioned private consumption and functioned as a shock absorber for the wider economy at a time when household demand had sharply contracted.
From a fiscal standpoint, the constraint lies not in principle but in scale. A UBI, although normatively attractive, is fiscally prohibitive in the Indian context. World Bank estimates indicate that financing a poverty-line UBI would require raising the effective tax rate on the richest decile from 2.2% to 68.4%. The practical alternative, therefore, lies in quasi-UBI. Targeted yet expansive, it provides income cushions to groups most exposed to economic volatility.
Subsidies have often been undermined by leakages. The JAM trinity — Jan Dhan (financial inclusion accounts), Aadhaar (biometric digital identity), and Mobile (phone connectivity) — has shown that direct transfers can deliver support with far greater efficiency. Introducing quasi-UBI would not only provide households with a steady income floor but also create a strong incentive for the government and banks to activate dormant accounts, ensuring that the full potential of the digital public infrastructure is realised.
PM-VBRY supports labour market entry, while quasi-UBI secures household demand during periods of disruption. Together, they create a balanced framework where job creation and income stability reinforce each other.
Deepratan Singh Khara is Research Lead, PANJ Foundation. Harleen Gill is Research Fellow, PANJ Foundation