Actually, I completely agree with your position. If you dont want ANY benefit, you should absolutely have the freedom to excuse yourself. The problem is that in a country like India 99% of the people do depend on some benefit or the other.

Not sure if you are aware, but the context around this specific discussion in India is around the use of Aadhar for targeted govt. assistance. The govt. position is pretty much that we need Aadhar for any subsidy and the courts are arguing against it.