Rahul Gandhi Promises Rs 72,000/Year To 25 Crore Poor Indians – 3 Reasons Why This Is Infeasible
Does this massive social welfare scheme makes sense?
Congress President Rahul Gandhi has declared the “final assault on poverty” in India. In a press conference today, Rahul Gandhi promises that if Congress is voted to power, then they will provide Rs 72,000 per year as financial assistance to 20% of the poorest Indians.
This scheme has been named as ‘Minimum Income Guarantee’.
A rough calculation will reveal that 20% of the poorest Indians translate to 5 crore families and with an average of 5 members in each family, this translates to 25 crore Indians, who are living below the poverty line.
Hence, if this is true, and if Congress returns to power, then these 5 crore families will receive Rs 6000 per month, or Rs 72,000 per year as financial aid.
Rahul Gandhi said, “The time for change has come”, adding, “The final assault on poverty has begun. We will wipe out poverty from the country.”
Later, a Congress official stated that the benchmark of being poor is any family, earning less than Rs 12,000 per month.
Based on various analysis and observations, we have scooped out 3 reasons which convince us that this scheme is not feasible in India right now:
Reason #1: 13% Additional Budget Requirement?
Rs 72,000 or Rs 6000 per month for 5 crore families in India will mean an additional burden of Rs 3.60 lakh crore on the state exchequer. The whole burden of executing this scheme will fall on the tax-payer. This is roughly 13% of the overall Rs 27,84,200 crore which has been already allocated to the Union Budget.
Hence, from where will the next Govt. arrange this 13% additional budgetary allocation?
Reason #2: Compromising Other Welfare Schemes?
Present Govt. under PM Modi has already announced state welfare schemes, whose budget has been allocated as Rs 3.27 lakh crore for next 5 years. Hence, the announcement of Minimum Income for the poorest families is even more than all the combined budget of all state welfare schemes, which needs to be executed in the next 5 years.
If this Minimum Income scheme is indeed executed by Congress, then it will leave a big hole in the state exchequer’s overall budget. Is spending so much money on a single project worthwhile, when it compromises all over welfare schemes?
Reason #3: Big Impact On India’s GDP
In case Congress led Govt. comes into power, and decided to execute this scheme, then the total expenditure of Rs 3.60 lakh crore would be 2% of India’s GDP.
This is a huge gamble to play, and it can ruin entire India’s economy. In order to arrange this extra fund, India will have to go back to its fiscal discipline route or cut back on other welfare schemes, both of which is infeasible under present circumstances.
Congress Is Determined; BJP Laughs Off The Idea
It seems that Congress has consulted several economists and financial experts before announcing this mega-scheme of offering minimum income guarantee.
While addressing the press, Rahul Gandhi said, “After doing all the calculations several times, we have found that this scheme is fiscally possible,”
Arch-rivals BJP has laughed off the idea, stating that this is impossible and doesn’t makes sense.
BJP’s national general secretary Ram Madhav said, “If you are sure about your defeat, you can promise moon. Who takes it seriously? Already under different schemes poor families get much more support. Is it in addition to those schemes or they all will be subsumed in it?”
Last year, BJP Govt. announced world’s largest health insurance scheme for the poor, Ayushman Bharat, which guarantees Rs 5 lakh insurance for 10 crore poor families.
We will keep you updated, as we receive more details.