A year ago, the concept of having a fixed monthly income, with or without any actually source of employment of income, would be laughable. In fact, even today, the thought is not completely believable. It is unheard of, and cannot be accepted by our minds very easily. A monthly stipend, without even working? Who in the right minds would ever depend on that happening?
But the fact remains that such a promise has been made to our country, by none other than Rahul Gandhi, who is currently the most prominent member of the Congress political party. Obviously, the promise was made on the condition that the Congress is elected in the 2019 Parliamentary Elections.
Seeing as the condition failed to come through, we will never know whether this promise would actually have been carried out or whether it was just another false vow, another bluff to gain favour and earn votes, especially from the needy economically poorer sections of society. However, we can still analyse and understand when and how this scheme was thought of, and how many billion people it would help out.
The basic idea of the scheme
It is not acceptable to the Congress that there is poverty in India in the 21st century. The final assault on poverty has begun.” This is how Rahul Gandhi began his announcement on the scheme that the spotlight currently is shining upon.
The scheme is called, in short and simple words, the ‘Minimum Income Guarantee Scheme’. In the scheme, the Congress party promises to give six thousand rupees on a monthly basis to certain families. The challenge is of course, deciding who the recipients of this income would be.
The scheme is targeted at the poorest houses, who earn 20% or below of the normal income. Families that earn less than twelve thousand rupees in a month, considering the joint income of all the earning members, are eligible for the stipend. That would imply approximately 250 million people. Seeing as there is 6000 rupees for a month, the families would have been receiving approximately 72000 in a year.
The money would be transferred directly into the accounts of the 20% of the poorest families of India. This expenditure will be worthy indeed because it would be lifting almost five crore families and twenty five crore people out of the trapping hands of poverty.
Rahul Gandhi has not exactly gone into the details of the minimum income guarantee scheme, but he has ensured the public that there is enough money in India to the families of India that are in need. He has described the scheme as an extremely powerful, extremely dynamic well-thought through idea and he calls it nothing less than “historic”.
When and why was the scheme announced?
Rahul Gandhi made an announcement of the scheme public soon after it was discussed at one of the meetings 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. He stated that the planning for the Minimum Income Guarantee Scheme had begun in almost September of 2018.
In fact, it was announced on the very same day that the poll process had formally taken off. He had already announced the frame work of the scheme in January. It is in fact, in competition with Narendra Modi, our current Prime Minister’s newly implemented scheme of helping out farmers, popularly known as the Kisan plan. In this, 6000 rupees a year is being promised to be given to all small and marginalised farmers. This plan aims at a 12.5 crore beneficiary.
The minimum income guarantee scheme is also a way of attacking the current government’s erroneous actions. Some of their actions were not exactly mistakes, but there were mixed feelings about it, such as the demonetization and the lack of employment opportunities.
The Congress has left no opportunity to attack the BJP government on these events, and this scheme is also one among many attempts to portray the Congress in better light.
People’s opinions about the scheme
Of course, as always there is a mixed bag of reactions to the minimum income guarantee scheme. Some people are calling it a bluff, some are glorifying it, some are supporting it but are not believing it is possible, while some could not care less and are simply ignoring it.
It is difficult to make out whose side to believe in politics, because every good politician, as well as their devoted supporters, know how to paint very fine pictures of their own stories. The best thing to do in such cases, is to form your own opinions and stick to it, without the influence of any other individual or party. However, it cannot hurt to hear the various opinions regarding the scheme.
Our Finance Minister Arun Jaitley, for one, completely trashed this Congress scheme. He termed it as chhal-kapat, which is Hindi for complete deceit. He called it a bluff, and he stands firm with his opinion. He was even quoted saying, “Congress has historically believed in political transactions in the name of removing poverty”. All in all, he aims to make it clear that he believes the scheme is a fool’s plan.
I would like to bring in Jean Dreze, a development economist, who seems to be on the fence, who said, “NYAY reflects a welcome commitment to social security. The soundness of this proposal, however, depends on how it is to be financed and how the poorest 20 per cent are to be identified.
Hopefully, the proposal will improve even as the commitment remains.” NYAY refers to Nyuntam Aay Yojana, which literally translates to “Justice”. It is simply another term for the minimum income guarantee scheme.
Rahuram Rajan, the RBI governor, was also consulted before the idea of minimum income guarantee scheme was announced to the public, and he was in complete support with it. It has also been called the best thing that the Congress has done in multiple places.
Understanding what is Universal Basic Income
UBI stands for the Universal Basic Income. It is basically a monthly stipend that would ensure that a person would be above the poverty line without any other source of income. Its core idea is to completely eliminate poverty or at least ensure that all individuals have an equal chance of survival in the country or within a certain city or state.
Universal Basic Income was first flagged in the Economic Survey of 2016- 2017, and considered to be very conceptually appealing idea. It is also thought to be an excellent alternative to social welfare programmes.
Minimum income guarantee for the poor is obviously based on the concept of Universal Basic Income, which is a model for providing all citizens of the country or a geographic area with a sum of money. There are only two small differences. Firstly, the Universal Basic Income of a country is universal, just as the title suggests.
It is given to at least 75% of the citizens of the country, regardless of their income. On the other, minimum income guarantee scheme, the stipend is given only to certain families, the poorest households falling below the 20% minimum wages level to be accurate.
Secondly, there is a fixed stipend for the citizens, which is supposed to be fixed at 7620 rupees per person 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 to, more or less than the poverty line expenditure.
To conclude, the Minimum Income Guarantee Scheme would have been a blessing to many people, had it come through. However, seeing as the Congress was defeated by the BJP government in the 2019 General Elections, we will now never know what would have come of it.