Congress president Rahul Gandhi on Monday promised an annual income of Rs 72,000 to some five crore families living below the poverty line. The scheme named NYAY, which the Congress will detail in their Lok Sabha election manifesto, will be the 'final assault on poverty', covering 20 per cent of the poor population, said Gandhi. "All modalities have been worked out and this is possible within our budget. We have studied the fiscal implications of the scheme," he said in the press conference.
Most of the economists termed it as a game changer, but it comes with a heavy financial burden on the country's balance sheet. Some people said that it would cost the country Rs 3.6 lakh annually, while others said that the cap would be the said amount and the real expense would be half of that. Finance minister Arun Jaitley called the scheme a "bluff" and an attempt to cheat the poor again. Some asked about the people behind the idea.
The manifesto committee of Congress headed by former finance minister P Chidambaram has been working on the list of poll promises for the past several months. Online media ThePrint earlier reported that Angus Deaton, the British economist who won the Nobel Prize in 2015, and French economist Thomas Piketty are advising the Congress on its ambitious minimum income guarantee scheme. The other people rumoured to be consulted to cut corners of NYAY scheme are economist Abhijit Banerjee and former RBI governor Raghuram Rajan.
After the announcement of NYAY, BBC contacted Piketty, who is noted for his work on income inequality, and he told the British media that he is not been directly involved in the design of this proposal. "But I certainly support all efforts to reduce income inequality in India, and especially to move away from the political debate of caste-based political to class-based redistribution of income and wealth," he said. Piketty was called "the modern Marx" by The Economist magazine.
Indian-American economist Abhijit Banerjee is the professor of economics at the Massachusetts Institute of Technology (MIT). He was recently in the Indian media because he attacked the Modi government for appointing retired bureaucrat Shaktikanta Das as the RBI Governor. He said that the decision leaves a lot of "frightening" questions about governance issues at major public institutions.
On Gandhi's basic minimum income promise, Raghuram Rajan told NDTV, "What matters is the details. Is it going to be an add-on or substitute a bunch of things? How do we get to the poor? We have seen over time that giving money directly to the people is often a way of empowering them. They can use that money for the services they need. What we need to understand is what are the things or schemes (subsidies) that will be substituted in the process."
Congress President Rahul Gandhi on Tuesday said that Rajan was among top economists that the party consulted to draft its minimum income guarantee scheme Nyuntam Aay Yojana or NYAY. "...we will turn this thought into reality. We have consulted economists, including Raghuram Rajan," he said in Jaipur.
Arvind Subramanian, former Chief Economic Adviser, had floated the idea of a Universal Basic Income (UBI) of Rs 1,500 a month for every poor rural household in the Economic Survey for 2016-17. In June 2017, Jaitley had said while he was fully supportive of the UBI plan, but it won't be feasible at the time due to "political limitations". He added that the people will demand the continuation of the subsidies over and above UBI and the Budget will not be able to afford it. NYAY kind of schemes have been trialled in small-scale all over the world, including in Finland, Kenya and the Netherlands.
Congress is also preparing a report on national security and the team for it is headed by Army Commander DS Hooda, who led the 2016 surgical strikes on terror launch pads in Pakistan.
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