India's nearly $3 trillion economy has the fiscal capacity to absorb the expenditure to fund NYAY, the minimum income support scheme promised by Congress Party, without the need for any new taxes on the middle class, former Prime Minister of India, Dr Manmohan Singh, said.
NYAY scheme -- announced by Congress Party as India conducts polls for the 2019 -- will cost between 1.2 – 1.5 per cent of GDP at its peak, said Dr Singh, former Prime Minister of India, in a release issued by the Congress Party.
The economic stimulus that NYAY will provide will further help in fiscal discipline, he added.
At a time when private investment and industrial production are low, NYAY – Nyuntam Aay Yojana – can help bring our economy back to life and create new factories and jobs. The Congress party is also committed to fiscal discipline.
On the 25th of March 2019, the President of the Congress party, Rahul Gandhi unveiled NYAY or Nyuntam Aay Yojana, which promises the poorest 20 per cent of Indian families an annual income support of a uniform amount of Rs.72000 each.
With sound policies adopted by successive governments over the last seven decades, poverty levels have been brought down from 70 to 20 per cent now. Nearly 70 per cent of Indians were poor when India attained Independence from the British in 1947, it added.
NYAY will 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. 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. NYAY has been conceptualised after much thought and consultations with experts, he added.
“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 added.
“It is my sincere belief that NYAY has the potential to catapult India into the club of ‘poverty free’ nations in the world and I hope to be able to live to see our nation achieve this historic milestone,” said the former Prime Minister.