Rahul Gandhi has announced a big scheme to guarantee a minimum income to 20% of the poor in the country. It is estimated to have an annual burden of Rs 3.6 lakh crore on the country.
India’s median household income in 2013 was USD 616 per annum. That is, 50% of households make less that $616 (Rs. 42,410) per annum. Inflation has been around 5% in the last 5 years, GDP growth around 7% and the $616 in today’s time should be around $900 – 1,000 (around 65,000 – 70,000 INR)
If we give bottom 20% of households income equivalent to 72,000/-, it would mean we would have around 30% of population making less than 72,000/- but who can’t avail this scheme.
For example, a household A making 30,000/- annum and his neighbour B makes 40,000/- per annum. A comes in the bottom 20% and B comes in at the bottom 30%. This scheme would push A’s income to 72,000/- (top 50% of the population) whereas his neighbour B would be in the bottom 10%.
A race to the bottom scheme
If 20% of poor people get Rs. 72,000 per year, then people in bottom 20-30% will be at a disadvantage. It would be a race to the bottom. Who would not want to get free 72,000 annually instead of working for 90,000?
Giving Rs. 72,000 annually to 5 crore households every year means that it will cost Rs 3.6 lakh crore to the government treasury. It is about 13% of the budget of Rs. 27,84,200 crore fixed for the next financial year i.e., 2019-20. So, this single scheme will cost India 13% of the entire fiscal year budget.
Not only this, it will be more than the proposed budget of 3.27 lakh crore for the centrally sponsored schemes like MNREGA, Swachh Bharat Abhiyan, National Health Mission, National Literacy Campaign etc. by the Narendra Modi government in the 2019-20 budget. This will be about 2% of India’s total GDP.
The Largest Welfare Scheme in the World
This plan will be implemented when Congress comes to power. But in reality, if the Congress came to power and implemented it, it can prove to be the biggest welfare scheme in the world. The population of 25 crores is equivalent to a country like Indonesia. Prior to this, the Universal Basic Income or Minimum Income Guarantee Scheme has not been implemented on such a large scale anywhere in the world.
Rahul Gandhi said that this scheme is ready and it is financially viable. Under this, five crore families or 25 crore people will get the benefit of the scheme. Rahul Gandhi said that if the Congress government came to power then this plan would be implemented in many phases. Rahul said that Congress has studied the financial implications of this scheme and before taking this final decision, consulted the country’s leading economists and experts in 4-5 months.