From NYAY to AI: How Jobless Growth Is Forcing Universal Basic Income Back on the Table

When Rahul Gandhi pitched the Nyuntam Aay Yojana (NYAY) as a guaranteed minimum income in 2019, it failed to capture the electorate's imagination. Fast forward to mid-2026, and the idea hasn't just returned to the mainstream—it is being advocated by tech billionaires like Elon Musk.

But Musk isn't pitching it to fight traditional poverty; he is warning of an AI-driven job apocalypse, advocating for a "Universal High Income" to sustain humanity in a post-work society. For India, this is far from a Silicon Valley thought experiment. With the rapid advancement of artificial intelligence directly threatening India’s IT employment backbone, the economic reality of 2026 has once again brought the Universal Basic Income (UBI) debate back into focus. Moreover, jobless growth is a key trigger for young Gen Z protests organised under the banner of ‘Cockroach Janta Party’—a satirical, youth-led movement against unemployment—that is increasingly taking on political overtones.

The AI Job Apocalypse vs. The IT Backbone
India's formal services employment backbone—IT services—is set to be hit hardest. After years of headwinds with discretionary spending abroad under pressure, the famed IT story is now being challenged by AI-driven automation. While some may argue that the narrative that AI will eliminate all IT jobs is overstated, the data from 2025 and 2026 confirm a severe, structural reduction of traditional tech roles—particularly at the entry level.

This is likely to worsen the country’s overall employment challenge. Unemployment among the educated young is worrying the government and the opposition, though it has yet to gain traction as a major electoral issue.

Recent labour market data from early 2026 indicates a noticeable shift. Workforce restructuring has become widespread at top IT service providers. With an estimated 90,000 global tech jobs eliminated in the first half of the year alone, many industry analysts link the cuts to AI adoption. This trend casts a worrying light on the future of high-value employment in India and abroad.

From NYAY to the Power of Cash Transfers
With traditional tech roles shrinking, the conversation must urgently shift toward a viable social safety net. The concept of a guaranteed income emerged as a major point of political debate during the 2019 general elections, when the Congress proposed NYAY. The scheme proposed a guaranteed minimum income of ₹72,000 annually to the poorest 20% of families in India.

The idea then had the intellectual backing of former RBI Governor Raghuram Rajan. He had acknowledged the potential need for a targeted cash transfer mechanism to address structural poverty and economic vulnerability, provided it could be balanced with fiscal discipline. Seven years later, fiscal discipline has become subservient to vote-catching "sop-nomics". Meanwhile, the opposition continues to heavily target the Modi government over jobless growth in the country.

While Congress has not yet returned to proclaim NYAY as a viable solution, the ability of cash transfers—or, critics would argue, handouts—to win elections in recent times—most recently in Tamil Nadu, Kerala, and West Bengal—shows the power of the idea, whether deserved or not. A case in point is the continuation of the central government's free ration scheme, now in its fifth year. The Modi government’s loud opposition to NYAY in 2019 on ideological grounds did not endure; state after state, the NDA has indulged in cash transfers, especially to women voters—a highly strategic cohort. Nor has the INDIA bloc shied away from doing so.

The Entitlement vs. Empowerment Debate
Competing political narratives between the NDA and INDIA blocs have competed around the principle of entitlement versus empowerment. Prime Minister Modi publicly advocated empowerment and ridiculed "revdi" politics ahead of the 2024 elections. But post the setback in the Lok Sabha elections, there has been a slow but steady shift within the NDA towards an entitlement-based approach, falling back on handouts of all kinds rather than empowering the masses to stand on their own feet and be economically independent. And, with recent electoral gains aided by these doles, it looks like neither the NDA nor the INDIA bloc is likely to shun the success formula, even while maintaining a public stance on fiscal discipline.

The UBI Dilemma: Fiscal Costs and Federal Hurdles
It is in this context that the debate around UBI merits attention. Implementing a centralised Universal Basic Income here, however, presents significant structural challenges due to the existing complexity of Union and state welfare programmes. Over the years, both the Union government and various state administrations have built extensive, targeted welfare programmes.

A prominent contemporary example is Tamil Nadu’s Kalaignar Magalir Urimai Thogai scheme. This programme utilises Direct Benefit Transfer (DBT) to provide a monthly cash entitlement of ₹1,000 directly to over 13 million eligible women heads of household who meet specific income and asset criteria. Similar schemes targeted at women in Madhya Pradesh, Maharashtra, Bihar, and West Bengal have proved electorally rewarding. Punjab too has such a scheme.

Will the BJP-led NDA, therefore, shun its avowed opposition to UBI, or will it embrace it as an out-of-the-box solution to the ever-growing disillusionment among young India? And will both Congress and NDA-ruled states finally show the courage to merge existing cash transfer schemes (for women, among others) with various subsidy programmes into a unified UBI framework for addressing distress and social unrest?

The co-existence of a centrally administered UBI alongside ongoing federal schemes raises clear operational and policy dilemmas. There is the risk of administrative redundancy. Also, from a purely electoral arithmetic standpoint, dismantling in-kind subsidies (foodgrains, fertilisers, and LPG) will likely face intense political and social resistance.

The bigger challenge is fiscal decentralisation: non-NDA-ruled states operate social schemes that run parallel to central schemes, often for narrow political dividends. Effective schemes by one political dispensation are often ignored or are not adopted by governments led by rival parties, resulting in policy fragmentation and political disputes. 

The primary constraint on implementing a comprehensive UBI remains its fiscal impact. Providing even a modest monthly cash transfer to India’s population would require an immense financial commitment.

A Socio-Economic Imperative
India has to confront the issue: first and foremost, it must shun competitive fiscal indiscipline. Second, it must not treat Universal Basic Income as a political pariah, but instead evolve a dispassionate debate around its viability. The current landscape—a chaotic patchwork of cash handouts and "revdi" politics—should not be showcased as a virtue but examined through the prism of economic viability.

As AI aggressively reduces employment opportunities and youth frustration mounts over the looming threat, the question is no longer whether India needs a comprehensive safety net, but how to build one without jeopardising fiscal sustainability.

It is time for both the NDA and the INDIA bloc to rise above fragmented welfare politics. Merging the existing maze of subsidies and state-level cash transfers into a rationalised UBI framework is not just an exercise in fiscal discipline; in the face of AI-driven job displacement, it is a socio-economic imperative.