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'NYAY pro-people, not populist': Congress defends minimum income scheme, seeks to clarify doubts on funding, implementation

In an attempt to clear the air over its much touted Nyuntam Aay Yojana (NYAY) or  Minimum Income Support Programme (MISP) scheme, the Congress party has released a FAQ document to dispel the controversies surrounding the scheme.

The ambitious scheme is one of the key highlights in Congress manifesto, and it promises Rs 72,000 per year (Rs. 6,000 per month) to the poorest 20 percent families (5 crore families) in India living Below the Poverty Line (BPL).

 NYAY pro-people, not populist: Congress defends minimum income scheme, seeks to clarify doubts on funding, implementation

File image of Congress president Rahul Gandhi. PTI

For beginners, the party has finally clarified that the scheme will not be a top-up scheme but a flat cash transfer, which means that Rs 6,000 per month will be transferred per eligible family irrespective of their current annual or monthly income. Earlier there were rumours that the party would transfer just enough money to bring up each BPL family's income to Rs 12,000 a month, leading to the criticism that red-tapism, corruption and difficulties in verifying declared income of a family will render the scheme useless.

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Touted to be a scheme that will yield the final blow to poverty, NYAY scheme is expected to achieve twin objectives of giving money to 20 percent poorest families and firing up the economy.

Congress president Rahul Gandhi has said that by implementing the NYAY scheme justice will be delivered to India's poorest and it will ensure eradication of poverty. "We want to return to deprived sections what Modi has snatched from them," the Congress chief said.

The Congress document also has a header dedicated to the source of funding for the scheme, one of the most common pointers used by critics to flay the scheme; Finance Minister Arun Jaitley called it a bluff announcement and experts, too, questioned whether the scheme is economically feasible.

The document, however, does not explicitly answer questions on fiscal prudence of the scheme. It merely indicates that the scheme will hand out the trickle-down benefits of GDP growth to the poorest sections of the Indian society, who were so far left behind in country's economic growth.

The party claims that the estimated cost of NYAY scheme will be less than 1 percent of GDP (at current prices) in Year I and less than 2 percent (at current prices) of GDP in Year II. Once the scheme is fully implemented, it will cost approximately Rs 3.6 lakh crore. The current size of GDP is Rs 200 lakh crore.

It vaguely mentions "new revenue opportunities" but does not detail on any of them: "We may look at new revenue sources, but will ensure that there is no extra burden on the poor and middle class. There are other ways to increase revenue, apart from taxes. There are many new revenue opportunities including asset monetisation"

However, the FAQ sheet stays mum on the rising fiscal deficit and how the party wants to bridge that gap while also managing to fund the ambitious scheme.


The obvious answer, also backed by Congress' primary rival BJP and several experts, was that the government will have to cut or streamline expenditure somewhere else, which would most likely mean eliminating some other welfare schemes. The party's FAQ document gives out mixed signals on this as well.

It categorically states that the Congress will "not roll back the 11 core subsidy schemes that exist for the poor today, comprising health, fuel, agriculture, food and education." However, the Congress admits that "rationalisation of current expenditure" will be needed without going into details of which government schemes or expenditures, in the party's opinion, can be rationalised.

The party merely refers to the success of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the criticism levelled at the time of its launch to 'prove' that social welfare schemes can be a part of policy making without burdening the exchequer. MGNREGA expenditure was 0.6 percent of GDP. It has now fallen to less than 0.3 percent.

On questions about identifying the beneficiaries and ironing out fiscal difficulties, the Congress said that it has relied upon extensive financial modeling exercise before deciding to include the plan in its Lok Sabha election manifesto. "For example, we evaluated income distribution data of households in India, household consumption patterns, global surveys and other data sets from the Government and private sector."

Ironically, Congress named some of the BJP's flagship schemes to obtain the data of India's poorest households.

"There are several data sets that are available like the Socio-Economic Caste Census (SECC) 2011 and household data. For example, SECC data was used to identify families for the PM Awas Yojana. There are also several targeting-based schemes that the Government is currently running like Antyodaya Anna Yojana, Ayushman Bharat, Ujjwala, PM Awas Yojana and PM Kisan Yojana from where we will obtain relevant data. The Antyodaya Anna Yojana, under PDS, covers 2.36 crore families."

Another curious observation from the party document was its supposed disclaimer. The party admitted that the document was merely a "research input" but added that it does not represent the "official party line" "This document is research input for the Indian National Congress and does not represent the official party line."

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Updated Date: Apr 02, 2019 10:57:07 IST

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