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Rahul Gandhi promises minimum income scheme

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  • UBI was first flagged in the Economic Survey 2016-17 as a conceptually appealing idea and a possible alternative to social welfare programmes
  • The Congress president’s minimum income guarantee for the poor is a spinoff of the concept of UBI
  • Rahul Gandhi did not, however, go into the details of his proposal, but said there was enough money in India to be given to the families
 

Congress chief Rahul Gandhi on Monday decribed his newly made poll promise -- a minimum income guarantee (MIG) scheme -- as a "groundbreaking" measure to end poverty. He said if Congress came to power after 2019 Lok Sabha polls, 20 per cent families in poorest of the poor category would be given Rs 72,000 each annually as a minimum income.

"The time for change has come," Rahul said while making this promise. Five crore families and 25 crore people will directly benefit from the scheme, he claimed, terming it is a "final assault" to eradicate poverty in the country.

"5 crore of the poorest families in India, will receive Rs 72,000 Per Year. #NyayForIndia is our dream and our pledge. The time for change has come," he later said on Twitter.

Until a few years ago, UBI -- the idea that government guarantees a fixed monthly income to every citizen of a country -- was largely utopian. But now, with Rahul Gandhi's announcement, the idea has entered the mainstream.

UBI was first flagged in the Economic Survey 2016-17 as a conceptually appealing idea and a possible alternative to social welfare programmes.

The Congress president’s minimum income guarantee for the poor is a spinoff of the concept of UBI, which is a model for providing all citizens of the country or a geographic area with a sum of money.

Rahul Gandhi did not, however, go into the details of his proposal, but said there was enough money in India to be given to the families.

Rahul Gandhi made the scheme public soon after discussing it at the meeting of the Congress Working Committee. The Congress chief said the party had studied the fiscal implications of the scheme and had consulted renowned economists and experts before finalising it.

So no UBIquitous

UBI is a fixed income provided to every adult -- be it the rich, poor, working or idle by the government. The core idea of UBI is to eliminate poverty or at least ensure survival of individuals in the country or within a certain area/state. It is defined by Basic Income Earth Network (BIEN).

UBI FOR INDIA -- the formula

Poverty line or the estimated minimum level of income needed to sustain life was fixed at Rs 7,620 per person/annum, based on economist Suresh Tendulkar’s poverty line formula.

The survey had estimated that such a model of UBI will cost 4.9 per cent of India’s GDP in comparison to 5.2 per cent of GDP spent on all 950 central sector and centrally sub-sponsored schemes.

Under the scheme, income transfer was envisaged through direct benefit transfer to the concerned individual using Aadhar. It was also recommended to start the scheme with women, elderly people, widows, and persons with disability.

While Tendulkar's version fixed 22 per cent of the population as poor, C Rangarajan later pegged the figure of poor families at 29.5 per cent or 363 million.

The per capita rural spending level was also revised from Rs 27.2 in 2012 to Rs 32 in 2014-15 while it was changed to Rs 47 from Rs 33.3 for urban areas.

Despite Rangarajan’s assessment, the Niti Aayog's Task Force on Elimination of Poverty report supported Tendulkar's formula, adding that Rangarajan's formula had not been officially accepted.

NATIONAL SOCIAL ASSISTANCE PROGRAMME

Under the National Social Assistance Programme (NSAP) since 1995, the central government gives pensions to the elderly, widows and disabled.

The Centre’s contribution is between Rs 200 and Rs 300.

However, India's income diversity makes implementation more difficult. Thus, Indians have not had a satisfactory experience with NSAP.

UBI vs MIG

A universal basic income provides a monthly stipend that would ensure that a person would be above the poverty line without any other source of income. (Thus, the Economic Survey of India suggested a UBI of Rs 7,620 per annum).

A minimum income guarantee, on the other hand, is pretty much at the discretion of the government of the day -- it can be equal, more or less than the poverty line expenditure.

Suresh Tendulkar and C Rangarajan headed committees that studied poverty in India. Both arrived at different qualification of poverty.

The Economic Survey of India's model of UBI suggested providing Rs 7,620 per annum to 75 per cent of India's population. The income was based on Tendulkar's poverty line of 2011-12 inflation-indexed to 2016-17.

Rahul Gandhi's plan, however, targets only the poor. Rahul Gandhi has not said whether his proposed minimum income guarantee will cover 22 per cent of the population (as fixed by Tendulkar) or 29.5 per cent (fixed by Rangarajan).

DOES IT STAND TO WORK FOR INDIA?

Such a spending can have a macro-economic impact. Experts say that fiscal deficit may increase further if subsidies are not rationalised.

Experts also say inflation may increase, so can the basic expenditure by the poor.

It's said the cost of poverty is very high and the cost of its elimination is even higher. It remains to be now seen how, if at all, Modi-led Centre counters the masterstroke by Congress.

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I6MTW Collaborator

I6MTW

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15 minutes ago, randomGuy said:

Hope 70%-80% muslims of UP and WB vote for INC, that i guess would be a good vote division to help BJP. 

No, a good majority of the Muslims in UP are supporting bjp this time due to Yogi Adithyanath govt, they're saying after his arrival, electricity has been coming regularly, more peaceful , and stable , development is there ,before the environment and situation was unstable. There were a few videos circulating around, where Muslims of UP were saying this. So Muslim votes will be more this time.

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DHONI_FANN Newbie

DHONI_FANN

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2 minutes ago, I6MTW said:

No, a good majority of the Muslims in UP are supporting bjp this time due to Yogi Adithyanath govt, they're saying after his arrival, electricity has been coming regularly, more peaceful , and stable , development is there ,before the environment and situation was unstable. There were a few videos circulating around, where Muslims of UP were saying this. So Muslim votes will be more this time.

Muslims can die premature for 72 goats but they will never vote for modi. 

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I6MTW

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1 minute ago, DHONI_FANN said:

Muslims can die premature for 72 goats but they will never vote for modi. 

Lol, but there were videos saying Muslims are voting for bjp, this time. I dont have it now, my friend showed me the videos, u can google it online .

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DHONI_FANN Newbie

DHONI_FANN

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1 minute ago, Turning_track said:

Minimum income guarantee will cost around 3.6 Lac crore, which will need about 14 % of yearly budget allocation. Total RBI reserves are 10 Lac crore and from where do they intend to get so much of money? 

Itna to khangressi 2-3 ghotalo me bana lenge. Not a big deal

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