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Rahul Gandhi’s NYAY scheme; Can Indian economy afford this?

HIGHLIGHTS

  • the scheme is for the poorest 20 percent of families in India
  • Scheme for the poor- NYAY
  • Existing scheme or a completely different plan?
  • India can’t add again a 7 crore to the subsidy.

As election campaigns in India are on fire, leaders from different political parties are in a hurry to influence the decision-making process in many ways. Political parties are busy scheduling their rallies and door to door campaigns. Apart from campaigns and rallies to attract the voter’s national leaders are announcing schemes for the weaker groups in the country. In the Modi led ministry, Piyush Goyal announced various schemes in the Interim Union Budget 2019-20 on February 1, 2019.

Rural India

 Rural development

These schemes have been announced with the objective to uplift the poor, women and farmers.  The budget speech by interim finance minister Piyush Goyal placed a large emphasis on rural development. Interim budget 2019 unveiled a minimum income support scheme for farmers in. Under the scheme, titled Kisan Yojana, cash will be transferred to beneficiaries, which hold 2 hectares of land or less, in three installments of ₹2000 a year, culminating in a total payment of ₹6000 per year.

And now Rahul Gandhi has announced that if the Congress is voted to power, it would launch a new scheme for the poor call “NYAY”. A scheme which promises Rs 72,000 per year to 5 crore households.

Scheme for the poor- NYAY

This scheme is for the poorest 20 percent of families in India. Rahul Gandhi at a press conference refers to the scheme as a “final assault on poverty”. He announced that it will be called as Nyuntham Aaj Yojana (Minimum Income scheme “or in other words, NYAY which means, justice in Hindi. According to some guesses, there are several centrally sponsored schemes with a large budgetary issuance like PDS, Urea, and MNREGA.

The NYAY would cost an estimated Rs 3.6 lakh crores to work it out. This would be a big fiscal liability on the Government. This amount is estimated to be a deeply 12 to13 percent of India’s Budgetary issuance.

Rising GDP

GDP and Growth

When you try to help the weaker section in the country, it will encourage income and lead to inflationary drifts. For sure it will lead to right stimulation in GDP and growth. After all, if the scenario of inflationary remains, we would witness an increase in interest rates.

If Congress can work out this out minimum guarantee scheme can make many huge changes in the Country. There are many ways to implement the scheme in a way that it will reach in the hands of weaker sections in the country. The scheme will help people to take financial decisions alone. The dilemma here is what is the basic plan to make this live?  Will it add on to existing schemes or is this completely different plan?

Considering the current economic condition of India, Congress’s NYAY scheme may not be achievable, because we can’t add again a 7 crore to the subsidy. Announcing the scheme  Rahul Gandhi had said, “The time for change has come”. 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. “We will wipe out poverty from the country,” “This is a historic scheme which has not happened anywhere in the world. It is an extremely powerful, ground-breaking and well-thought through idea. We have consulted many economists on the scheme”, He added.

 

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