Former prime minister Manmohan Singh yesterday said a minimum income guarantee scheme proposed by the Congress will end poverty and restart the economic engine which has “come to a stop” under the Bharatiya Janata Party government.
In a statement, Singh said that implementation of Nyay scheme, which envisages giving Rs72,000 per family every year to the poorest 20% of the population, would not entail any new tax on the middle class.
He said that the Congress is committed to fiscal discipline and Nyay would cost between 1.2% and 1.5% of the Gross Domestic Product (GDP) at its peak.
“Our nearly $3tn economy has the fiscal capacity to absorb this expenditure. There will be no need for any new taxes on the middle class to finance Nyay. The economic stimulus that Nyay will provide will further help in fiscal discipline. It has been conceptualised after much thought and consultations with experts,” Singh said.
He said Nyay is a powerful idea with dual objectives.
“On March 25, 2019, Congress president Rahul Gandhi unveiled Nyay – Nyuntam Aay Yojana – to wipe out the last remnants of poverty and to restart stalled economic activity in our nation,” Singh said.
He said that Nyay has been received with tremendous enthusiasm by people and discussed widely across the nation.
“Nearly 70% of Indians were poor when India attained Independence in 1947. With sound policies adopted by successive governments over the last seven decades, poverty levels have been brought down from 70% to 20% now. It is time now to renew our pledge to wipe out the last remains of poverty,” he said.
The former prime minister said Nyay would ensure a basic level of dignity and respect for every Indian family.
“By providing direct income support, Nyay will empower our poor with economic freedom and choice. With Nyay, India will usher in an era of a minimum income guarantee and help create a new social contract for a new welfare state,” Singh said.
“Nyay will also help restart our economic engine that has come to a stop today. Money in the hands of the needy will stimulate demand in the economy which can then lead to increased economic activity and job creation, referred to as the Keynesian effect by economists. At a time when private investment and industrial production are low, Nyay can help bring our economy back to life and create new factories and jobs,” he added.
Singh referred to the economic reforms when he was the finance minister in 1991 and to the rural employment guarantee scheme brought by the Congress government led by him.
“Just as we brought in a new paradigm for India’s development with the de-licensing regime in 1991 – a rights-based approach to governance including the Right to Work under MGNREGA, I am confident a Congress Party-led government in 2019 will implement Nyay successfully and usher in a new model for social justice and prudent economics,” he said.
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