Rahul Gandhi has sought to up the ante in election rhetoric promising Rs.72,000 per annum to the poorest 20 % of families. If proposed by a government, this will be hailed as a welcome social security measure that seeks to banish 'absolute poverty'. If proposed by an opposition party with all relevant calculations and plans on raising requisite funds, it will be praised as a sincere attempt to convince the electorate as to why the party deserves a chance to govern. If proposed by an opposition party at the last minute just ahead of the elections sans any sincere attempt at economic arithmetic, it will be dismissed as nothing more than deceitful election rhetoric.
NYAY (Nyuntam Aay Yojana - Minimum Income Guarantee Scheme [MIGS] ) announced by the Grand Old Party on March 25th is long on promises and short on planning. 50 million poorest families are promised Rs.72,000 p.a. each to enable them to have a minimum yearly income of Rs.144,000 each. Those families falling short of annual income of Rs.144,000 despite the government's proposed assistance will be assisted by the Congress party with additional funds to bridge the gap. Assistance by the Congress party was mentioned only in one report. Many reports of the scheme have emerged with inconsistent details.
It is a top-up scheme ,assures one and therefore it will not be fiscally taxing. It is not a top-up and all these families will be given Rs.72,000 p.a. as claimed by another report. Further details will be provided by the architect of the scheme, P.Chidambaram in due course. It is really funny that different leaders come up with different versions. (Chidambaram has since confirmed that Rs.6,000 per month will be provided to each of the poorest 20% of families. He has discounted any difficulty in identifying such families. An expert committee will be appointed if the party comes to power and the MIGS scheme will be rolled out in stages. The amount will be directly credited to the bank account of a woman member of the family. Poverty abolition and women empowerment at one stroke! )
It sounds more like a battle cry with military metaphors thrown in. "It is the final assault on poverty." "It is a surgical strike on poverty." We are led to believe that India will become a poverty-less (Garibi-mukt) nation within five years if only the Congress party is voted to power. What the grandmother could only promise but not deliver ('Garibi hatao'), the worthy grandson wants to deliver!
P.Chidambaram is confident that the scheme will not require more than 2% of GDP for its implementation. So, if the scheme does not lead to withdrawal of any subsidy scheme and if additional taxes are not levied, fiscal deficit (that is the amount to be borrowed by the government as % of GDP) will increase by 2%. Fiscal Deficit is now 3.3%
Direct income transfer to the poor cannot be questioned on ethical grounds. Even the most fiscally imprudent social welfare scheme can work well if accompanied by administrative efficiency and political rectitude. At the same time, even a fiscally prudent social welfare scheme will come a cropper if accompanied by administrative bungling and political duplicity.
We are not sure if the Congress party is chastened by the debacle it faced in 2014 on account of its multiple scams. If it has not learnt any lessons, MIGS will degenerate into PIGS (Political Income Guarantee Scheme). As of now, it looks as though NYAY or MIGS is a desperate gamble by the Congress party to oust Modi from power. Even if there is a change in government, Congress may at best be a coalition partner in the government. "Coalition Dharma" will provide an excuse for non-implementation of poll promises. The much wanted relief for the poor is not likely anytime soon.
NYAY (Nyuntam Aay Yojana - Minimum Income Guarantee Scheme [MIGS] ) announced by the Grand Old Party on March 25th is long on promises and short on planning. 50 million poorest families are promised Rs.72,000 p.a. each to enable them to have a minimum yearly income of Rs.144,000 each. Those families falling short of annual income of Rs.144,000 despite the government's proposed assistance will be assisted by the Congress party with additional funds to bridge the gap. Assistance by the Congress party was mentioned only in one report. Many reports of the scheme have emerged with inconsistent details.
It is a top-up scheme ,assures one and therefore it will not be fiscally taxing. It is not a top-up and all these families will be given Rs.72,000 p.a. as claimed by another report. Further details will be provided by the architect of the scheme, P.Chidambaram in due course. It is really funny that different leaders come up with different versions. (Chidambaram has since confirmed that Rs.6,000 per month will be provided to each of the poorest 20% of families. He has discounted any difficulty in identifying such families. An expert committee will be appointed if the party comes to power and the MIGS scheme will be rolled out in stages. The amount will be directly credited to the bank account of a woman member of the family. Poverty abolition and women empowerment at one stroke! )
It sounds more like a battle cry with military metaphors thrown in. "It is the final assault on poverty." "It is a surgical strike on poverty." We are led to believe that India will become a poverty-less (Garibi-mukt) nation within five years if only the Congress party is voted to power. What the grandmother could only promise but not deliver ('Garibi hatao'), the worthy grandson wants to deliver!
P.Chidambaram is confident that the scheme will not require more than 2% of GDP for its implementation. So, if the scheme does not lead to withdrawal of any subsidy scheme and if additional taxes are not levied, fiscal deficit (that is the amount to be borrowed by the government as % of GDP) will increase by 2%. Fiscal Deficit is now 3.3%
Direct income transfer to the poor cannot be questioned on ethical grounds. Even the most fiscally imprudent social welfare scheme can work well if accompanied by administrative efficiency and political rectitude. At the same time, even a fiscally prudent social welfare scheme will come a cropper if accompanied by administrative bungling and political duplicity.
We are not sure if the Congress party is chastened by the debacle it faced in 2014 on account of its multiple scams. If it has not learnt any lessons, MIGS will degenerate into PIGS (Political Income Guarantee Scheme). As of now, it looks as though NYAY or MIGS is a desperate gamble by the Congress party to oust Modi from power. Even if there is a change in government, Congress may at best be a coalition partner in the government. "Coalition Dharma" will provide an excuse for non-implementation of poll promises. The much wanted relief for the poor is not likely anytime soon.
No comments:
Post a Comment