Universal Basic Income (UBI) Policy has attracted considerable attention in recent years. This study investigates the economic impact of UBI Policy on expenditure patterns in ‘rurban’ setting of Maharashtra, India using a comprehensive survey of 379 households in 11 census towns. The survey assesses the household’s consumption, savings, and investment responses to a hypothetical scenario where they receive fixed UBI payments monthly. Econometric models, specifically the Heckman Selection model and Seemingly Unrelated Regression, are utilized to examine the relationship between demographic information and the allocation of UBI funds across various goods and services, which are classified into three categories – ‘sinful’, ‘financial’, and ‘consumption’ goods and services. The results suggest that the UBI Policy has a notable capacity to change consumer behavior positively by offering financial stability and adaptability. Key findings include: there is significant allocation of UBI funds towards essential needs such as food, healthcare, and housing; there is restrained increase in expenditure on ‘sinful’ goods; there is a cautious attitude towards spending on recreational or discretionary products; there is notable focus on spending related to children’s education and healthcare. The spending patterns also showcase behavioral influences like present bias, Hawthorne effects, naïve allocation, and mental accounting. The findings also highlight the prevailing conviction among respondents that UBI would greatly improve general welfare and quality of life, with a substantial majority believing that UBI would guarantee access to essential requirements, would provide financial stability, would improve educational possibilities, and vital assistance in times of crisis. The findings suggest that to discourage spending on ‘sinful’ goods and services, governments should concentrate their efforts on households located near educational institutions, and on young, unmarried individuals and urban inhabitants. To promote spending on ‘financial’ goods and services, they must target individuals who have access to technology and aid households by improving their financial literacy via targeted programs. And, to promote spending on ‘consumption’ goods and services, families with fluctuating, lower incomes; households with greater number of members; and those who depend on informal savings methods should be targeted. Looking ahead, the study recommends several avenues for future research, including verifying the results via a randomized control trial.