Will the minimum income guarantee scheme, dubbed NYAY, help the Congress regain lost electoral momentum after the Pulwama terror attack and the Indian Air Force’s Balakot strike? The scheme offers the poorest households a direct transfer of Rs 6,000 per month to ensure they have a minimum guaranteed monthly income of Rs 12,000. The total universe is estimated at five crore poor households—about 25 crore people.
The NYAY scheme has three built-in flaws. First, it will be logistically impossible to identify people, who collectively as a family have a household income less than Rs 12,000 per month (Rs 1.44 lakh per year), eligible for the scheme. Such low earners are below the tax threshold. Most, if not all, don’t file tax returns. Many will be tempted by the scheme to under-report their real income.
The second: It could violate the Fiscal Responsibility and Budget Management Act of Parliament. To avoid that, NYAY’s approximate annual outlay of Rs 3.60 lakh crore (1.9 per cent of 2018-19 GDP) will need to come at the expense of all other subsidies (fuel, fertilizer and food) which amount to over Rs 2.95 lakh crore. If these are not terminated, NYAY will lead to the fiscal deficit shooting up from 3.4 per cent of GDP to 5.3 per cent. That will trigger an immediate downgrade by international rating agencies like Moody’s, Standard & Poor’s and Fitch. India’s borrowing costs will rise significantly, hurting the economy.
The third defect in NYAY is that doles create dependencies. As the old saying goes: “Give a man fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”
Congress president
Rahul Gandhi is keen to change the narrative from national security to the economy. But party leaders wittingly or unwittingly continue to undermine the strategy. For example, Rajiv Gandhi’s telecom czar and Rahul’s current mentor, Sam Pitroda, said last week: “Pulwama-type attacks happen all the time.” He added: “There was no need to bomb Pakistan” and asked pointedly if the IAF “had hit the right targets”.
This is where the Congress narrative comes apart at the seams. During the Doklam standoff, Rahul paid a personal visit to the Chinese ambassador, subverting protocol by not briefing the government on what was said during a period when the Indian and Chinese armies were eyeball to eyeball in Doklam. Countries like Pakistan and its all-crisis ally China thrive on internal divisions in Indian politics. The Pakistani media has gleefully headlined pro-Pakistan statements by Congress leaders like Navjot Singh Sidhu and Pitroda.
Some Indian journalists, longtime favourites of the Pakistani establishment, nip in and out of the Pakistan High Commission, a warren of ISI officers and Kashmiri separatists who subvert them with generous largesse. According to a report in a daily, “the Enforcement Directorate (ED) recently found that Kashmiri separatists have allegedly received at least Rs 7 crore from across the border to fund unrest in India. Identifying the money as proceeds of crime, the ED has alleged that the funds were disbursed by conduits and the Pakistan High Commission in India.”
The opposition has rightly criticised the Narendra Modi government for its inconsistent policy on Pakistan. Indian officials are frequently wrong-footed by devious Pakistani tactics on, for instance, the Indus Waters Treaty (IWT) and the Kartarpur Corridor. Pakistan craves for equivalence with India. Irresponsible statements by some Congress leaders add to the problem.
The problem with periodically hurling charges of corruption against the prime minister is that they won’t stick. It is far better to focus on the economy. Unemployment figures from the Centre for Monitoring Indian Economy (CMIE) have shown significant job losses. However, the latest data from the Annual Survey of Industries (ASI), furnished by the Central Statistical Office (CSO), point to robust job growth. The truth lies somewhere in-between.
In an interview to a prominent business daily, chairman of Godrej Group, Adi Godrej said: “I think our measurement of employment is still not very good. I don’t think anybody who needs work is not able to get (a job). So it is a question of not being able to get what you want. In fact, there is shortage of people. All sorts of people - doctors, nurses, teachers. To my mind, this is a wrong perception. Generally, it is a political perception created by the Opposition. Otherwise, you would not be the fastest growing economy in the world. In almost all our businesses, rural growth is faster than urban growth and this is true for all companies. Rural India is growing very well. ... Growing of vegetables, fruits as a business is growing dramatically. A lot of retail outlets are opening in rural India. ”
With less than two weeks left for the first phase of the 2019 Lok Sabha elections, the Congress should produce a series of white papers on economic, foreign and social policy. The party has a talented group of lawyers and technocrats who could by now have presented an alternative policy framework. The Congress has very little time to regain momentum in what will still be a close election.
Minhaz Merchant
The author is an editor and publisher
Tweets @MinhazMerchant