To counter the shrill and muscular nationalist campaign of the Modi camp, and to bring back the debate to domestic issues from Pakistan and terror, the Congress and Rahul Gandhi have announced an attractive minimum income guarantee scheme. Called the Nyunatam Aay Yojana – the acronym NYAY or ‘Justice’ – it promises a guaranteed income of Rs 12,000 a month to the country’s very poor if the pary is voted to power in the coming Lok Sabha elections.
NYAY seems to be designed on the hugely successful ‘Garibi Hatao’ slogan that won the 1971 polls for Rahul Gandhi’s grandmother, Indira Gandhi. ‘Garibi Hatao’ remained pretty much a slogan, and that can be the fate of NYAY too. BJP’s finance minister Arun Jaitley has dubbed it a “bluff announcement”. So what can we expect?
SOME DEEP THINKING
Reading the declarations of Congress spokespersons, the income guarantee scheme is not just an election gambit, but is designed as a future policy. It is targeting high joblessness and rural distress – the two big drags on the Indian economy. Congress spokesperson Rajeev Gowda says it is aimed at the bottom 5 crore families or 25 crore people who will receive a guaranteed earning of Rs 72,000 a year. It is estimated that these families have an average monthly income of Rs 6,000; which means the state’s direct benefit transfers (DBT) will average Rs 6,000 per month per family.
This translates into provisioning for a humungous Rs 3.6 lakh crore per annum. Former finance minister P Chidambaram said on Twitter that the Congress has “consulted economists, this is doable, and we will adhere to fiscal discipline”. That the party has been consulting former RBI governor Raghuram Rajan, British economist Angus Deaton and Frenchman Thomas Piketty, called by The Economist as a ‘Modern
Day Marx’, shows it means business.
It is hardly certain that the Congress will win to implement its NYAY scheme; or even if comes to power, whether it will have the will to garner the resources. However, as a minimum income programme, NYAY is the need of the hour. People are without work and the rural economy is crumbling. Till things are brought to an even keel, direct income support targeting the very poor is necessary. Vague subsidy schemes that are on paper and spread out too thin over the entire population do not make sense.
INCOME SUPPORT NEEDED
Sample the unemployment scenario: The leaked National Sample Survey Office’s 2017-18 report says that the unemployment rate (6.1 per cent) has reached a 45-year high; worse, the workforce has shrunk by 47 million since 2011, showing a sharp fall in jobs. Those who have support jobs through the Mahatma Gandhi National Rural Employment Guarantee Scheme have just received a laughable average hike of Rs 2.16 per cent – the lowest ever in the history of the scheme. From April 1, rural labour in six states will get no wage rise, while in another 15 states, the rise varies from Rs 1-5 per day.
The idea of a minimum income guarantee is not new. The Economic Survey for 2016-17, authored by the then Economic Advisor Arvind Subramanian, makes a case for a ‘Universal Basic Income’ suggesting a starting point of Rs 1,500 per month. This was not implemented. What was announced was a niggardly dole in the latest interim budget, where farmers were to be given an assured income of Rs 6,000 per annum in three installments. Called the Pradhan Mantri Kisan Samman Yojna, ‘income support’ meant the princely sum of Rs 500 a month!
The Congress has also been showing some alacrity in spelling out its other economic and business plans. In a recent interview with news agency PTI, party president Rahul Gandhi promised to support entrepreneurship with a regulation-free passage for new ventures for the first three years and easy access to bank credit. He also said the controversial ‘angel tax’ on start-ups would be done away. Angel tax is an impost on investments in start-ups that are considered above ‘fair market value’.
With this package, the Congress has stolen a march on the ruling BJP, which is yet to come out with any definitive economic programme. Its manifesto too will only be released in the beginning of April. Meanwhile, Prime Minister Narendra Modi, who flagged off his election circuit with rallies in Meerut, Rudrapur and Jammu, chose to fire a heavy barrage of ‘the Opposition-is-aiding terrorism-and-Pakistan’ accusations on the Opposition.
Wonder what the people will bite?