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NYAY scheme will be rolled out in phases; India has capacity to implement it, says Chidambaram

Congress leader P Chidambaram is confident that the minimum income guarantee scheme will cost 1.8% of the GDP at any given time, and as per the party's calculations, it "will not cross 2% of the GDP".

twitter-logo BusinessToday.In   New Delhi     Last Updated: March 27, 2019  | 17:32 IST
NYAY scheme will be rolled out in phases; India has capacity to implement it, says Chidambaram

Two days after Congress chief Rahul Gandhi announced the ambitious NYAY scheme, which will be a part of the party's Lok Sabha election manifesto, senior leader P Chidambaram took on doubters and naysayers at his press conference today.

According to the former finance minister, the minimum income support scheme - which will give 20% families in poorest of the poor category Rs 72,000 each annually, benefiting around 25 crore people - will be "rolled out in phases".

Also Read: Raghuram Rajan endorses NYAY but sceptical of funding, says no space for Rs 7 lakh crore subsidy

Chidambaram added that the scheme has to be tested in the field first. "An expert committee will be set up for its implementation and it will design the scheme at every stage and "we will consult the committee before we move to the next stage," he explained.

In addition, he claimed that "enough" economists and experts had been consulted on the topic beforehand, including former RBI Governor Raghuram Rajan, and they all broadly agreed that India has the capacity to implement this scheme.

However, while Rajan said that the scheme can "revolutionise things" if implemented properly, he is sceptical of the funding. He, in fact, told BusinessToday.In that there is no space in the country to handle Rs 7 lakh crore subsidy.

"At this point if you ask me, given the way we are, can we add Rs 7 lakh crore, the answer is no. That is really what any sensible government, post-election, will have to think about. How do I... make whatever (parties) promised, happen, but within the context of what space is available, and how do I actually improve delivery," Rajan said. The Rs 7 lakh crore subsidy he mentioned factors in the subsidy outlay of Rs 3.34 lakh for existing schemes in 2019-20. The additional potential outlay of Rs 3.6 lakh crore for NYAY will increase the subsidy burden to Rs 6.94 lakh.

Nonetheless, Chidambaram is confident that the NYAY scheme will cost 1.8% of the GDP at any given time, and as per the party's calculations, it "will not cross 2% of the GDP". He also believes that there is enough data to identify the five crore beneficiary families. "When the 100 days employment scheme (Mahatma Gandhi National Rural Employment Guarantee Act) was implemented in 2009, BJP leader Arun Jaitley had said it was not possible to implement the scheme. Jaitley, however, forgot to say that doubling income for the farmers was not possible when Modi announced it," Chidambaram said, taking a pot-shot at the ruling regime.

He acknowledged that there were challenges involved in implementing the scheme, and said that the Congress was aware of them, but would overcome them. "We will insist that every family should open an account in the name of the woman in the family and the money will be transferred to her account," he said. "Poverty eradication should be accepted as an 'aram' [meaning dharma in Tamil], it is dharma, it is a moral duty of every government in the 21st century."

On criticism that has been levelled at the scheme, Chidambaram pointedly stated that he did not wish to reply to anyone who criticises a programme intended to wipe out poverty and that the Congress Party, which had taken several measures to root out poverty, cannot be blamed for not eradicating it. "MNREGA eradicated hunger, income scheme will root out poverty," he stated.

According to him, without a minimum income support scheme, poverty will not end. "Like the Minimum Wages Act which stipulates minimum wages, every family should have a minimum income and the government cannot provide the entire income and that was why the scheme is called the "Minimum Income Support Scheme," he said.

But he does not want any comparisons with the Modi government's recent Kisan Samman Scheme. "Don't compare Kisan Samman Scheme with this [NYAY] scheme and trivialise our scheme," he said, alleging that the BJP rolled out the farmers plan "for elections". Else, why did the BJP-led NDA not implement it in "full five budgets", instead of rolling it out at the fag end of its tenure, he posed.

Chidambaram reportedly also dismissed notions that most existing subsidies would be scrapped to pave way for NYAY. He explained that subsidies with specific socio-economic objectives will not be withdrawn. He also indicated that the Congress manifesto is likely to be released on April 2.

With PTI inputs

Read More: NYAY scheme: Rahul Gandhi names Raghuram Rajan among economists consulted; former RBI governor sceptical about funding

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