Rahul Gandhi's big-bang minimum income scheme is too expensive to be implemented; here's why

Rahul Gandhi’s minimum income plan providing Rs 72,000 per annum to the poorest 20 per cent of households has become a hotbed issue for many political analysts, economists and financial institutions.

Congress President Rahul Gandhi (Photo: PTI)

Congress will provide Rs 72,000/ year to poorest 20 per cent of households

The scheme would cost Rs 3,60,000 crore annually

Rahul Gandhi said that his party has done its homework

New Delhi: Congress President Rahul Gandhi’s minimum income plan providing Rs 72,000 per annum to the poorest 20 per cent of households has become a hotbed issue for many political analysts, economists and financial institutions. While several call it an astute political move and a bluff announcement by Congress, if implement at all it will make India a zero poverty nation. It is also worth noting that the announcement made by Congress President is twelve-times what Prime Minister Narendra Modi has promised to give to the poor farmers of this country. The scheme would cost Rs 3,60,000 crore – an amount which is way more than what the Central government spends on various prime subsidies including food, electricity, water, rations and others. The scheme, if at all implemented, will disrupt the country’s economic balance. Niti Aayog Vice-Chairman Rajiv Kumar stated that Gandhi’s promise of providing Rs 72,000 annually to five crore families if voted to power will create strong incentives against work and burst fiscal discipline. “The cost of the minimum income guarantee scheme at 2 per cent of the gross domestic product and 13 per cent of the budget will "ensure" that the real needs of people remain unsatisfied,” Kumar added. The promise made by Congress chief is about 13 per cent of Rs 27,84,200 crore budgeted expenditure for the current fiscal and slightly more than the entire money Modi government has allocated for centrally sponsored schemes. As Gandhi’s minimum income scheme would highly impact the fiscal balance, it is highly possible that all other subsidies will be removed. This means there would be no subsidies on water, electricity, fertilizers, rations and others. However, the announcement made by Gandhi does not mean that every poor will get Rs 12,000 dole. If a family makes Rs 6,000, the scheme would help to chip in the rest to raise the monthly family income to Rs 12,000. Explaining the possibility of implementation of the scheme, Gandhi said that his party has done its homework. “We have checked it again and again and again. It is fiscally, perfectly possible. We committed MGNREGA (rural job guarantee scheme), we did it. We will eradicate poverty from India,” he said. The announcement has faced fierce criticism from ruling Bharatiya Janata Party (BJP). Finance Minister Arun Jaitley described the scheme announced by Gandhi as a ‘bluff announcement’. “If the Congress Party's announcement is tested on simple arithmetic, Rs.72,000 for five crore families works out to be Rs.3.6 lakh crore, which is less than 2/3rd of what is being given (by the current government)- A bluff announcement,” Jaitley said. Even the Economic Advisory Council to the Prime Minister (EAC-PM) also criticised the pre-poll announcement by Gandhi in series of tweets, but later deleted them after it was pointed by a Twitter user that they were in violation of the model code of conduct. Congress needs to figure out the implementation of the scheme (if it is voted to power), BJP, on the other hand, must come up with a similar poll promise in its manifesto to stay ahead in the election game.

Published at : 26 Mar 2019 09:13 AM (IST)

Tags :

Follow Election 2024 News on ABP Live for more latest stories and trending topics. Watch breaking news and top headlines online on ABP News LIVE TV Khelo khul ke, sab bhool ke - only on Games Live

View More