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The Care Economy via Universal basic Income

  • Category
  • Published
    18th Apr, 2022


With the recent study by ILO, the care giving economy can be a way for boosting post COVID economy of a country.

  • Care giving economy will not only help in economic growth but it will also address several social issues like gender inequality and care for children and elderly in the society.

What is care economy?

  • Care giving work is broadly defined as looking after the physical, psychological, emotional and developmental needs of one or more other people.
  • The care economy is growing as the demand for childcare and care for the elderly is increasing in all regions. It will thus create a great number of jobs in the coming years.


  • The ‘care givers and economy’ was first highlighted by the National sample survey of India by the report of Family and health survey.
  • After which, during COVID times this need got pace in our country. The number of care giving and people who need care is much significant and economy should take benefit from providing adequate financial assistance to them.
  • Universal basic income- To deal with theeconomic inequality, unemployment and poverty created by the Covid-19 pandemic, many advocated Universal Basic Income (UBI) programme to be a solution.

Need for care economy

  • Unemployment rate in India reached a 45-year high of 6.1% in 2017-18, as per the recent NSS estimates.
    • Care economy will help to reduce unemployment by giving care jobs in the sectors such as nurses, home care takers, child caring person and elderly cares.
  • Gender equality in labour force-The IMF has also highlighted the widening gender gap in labour force participation rates in India.
    • We must explore reasons why the female labour force participation is in India is one of the lowest in the world.
    • The lack of a comprehensive care economy policy is the single-most significant reason for the falling rate of female labour force participation. If we want to reap the demographic dividend before it vanishes, designing a comprehensive care economy policy in India should be the strategy.
  • To achieve silver economy- the silver economy is the term for caregiving to the elders and old age persons in the country.
  • Silver economy- The silver economy includes all those economic activities, products and services designed to meet the needs of people over 50.
    • This concept, derived from the so-called silver market that emerged in Japan, — the country with the highest percentage of people over 65 — during the 1970s to refer to the senior market, brings together sectors as diverse as health, banking, automotive, energy, housing, telecommunications, leisure and tourism, among others.
  • Child care- children are the future of our country and hence providing care to them should be the basic criteria for any government to achieve a prosperous economy.
    • Child care services came to picture after female or mothers started participating in formal and informal jobs for helping the family income.
    • Child care must also be included in jobs so that caring should not be a gender specific role in the society and paid maternity and paternity leave is one such example for this.

Will it benefit the Indian economy?

  • Providing decent work for all- care economy is not only for growth in economy, it includes providing decent work status to every individual in the society.
    • Half of the population in our country is occupied by Females, and rest for children and elders. Such policy which gives adequate working for their services in the society will benefit Indian economy to generate revenue and increase labour force participation.
  • Extending social security for women and elderly- social security benefits such as pension schemes will be extended to the women and elderly via such policy for care givers. It will also enable them to access paid family leave.
  • Gender role balancing- gender biased formal sector can be targeted by such policy and more female participation with equal wages can be seen.
  • Reduce burden for Informal work- care services if get formalised, then informal works with high risks associated such as work in factories, industries and far locations for women and children will be reduced.
  • Health benefits- Women and child health policies fail to provide proper financial assistance to them and this care giving policy can be an umbrella scheme for health benefits to the vulnerable section of the society.

Similar initiatives

  • Sage INDIA Project- elderly care above 50 years of age.
  • Compassionate care leave- In Canada, Introduced to take care of one’s ailing relative, up to six months in discrete or in continuum.
  • The Swedish Theory of Love’-encapsulates the public policy revolution in Sweden, when policymakers decided ‘autonomous individual’ (not the ‘household’) as the unit of analysis of a public policy.

Challenges associated

  • Lack of a comprehensive policy- The lack of comprehensive policy or law for care givers is the major challenge for implementation of such a scheme in India.
  • An integrated policy is the need of the hour for not only care givers but for care takers.
  • Poor infrastructure- care giving infrastructure in India has not focused much, as it is considered a personal expense for an individual.
  • Out-of-the-pocket expenditure is increasing, which was also been highlighted in the budget 2021-22 for family and health in India.
  • Introduction of incentives for private firms- Un-inclusion of private sector under the care giving services and policy can reduce its benefits for people under government jobs or formal sectors.
  • Lack of funds- finance and data is the first priority for any scheme to be started. Care related data is not collected in India in any formal sense.
  • Subjectivity of term ‘Care’ in India can be a hurdle for these services.


Care giving economy is a major step for India as a developing country to achieve post COVID recovery. But it needs proper data collection and research for beneficiaries so that the benefit of the proposed term ‘care economy’ will not reduce to just ‘ Basic financial assistance’.


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