Rahul Gandhi’s pledge to give Rs 6,000 a month has to have sound logic or could look like a vote-grabbing exercise
Forty years ago, Rahul Gandhi’s grandmother made ‘Garibi Hatao’ (remove poverty) the centrepiece of her poll campaign. India was a horrendously poor country after decades of failed socialist economics and it was believed that the only way to drastically reduce the poverty rate was through a system of handouts. So unsurprisingly, some are mocking Rahul Gandhi’s promise of giving Rs 6,000 per month to India’s poorest 50 million households as a sort of income guarantee to make up for the failure of 40 years of economic development, which it is, though Gandhi and the Congress are not alone in adopting the handout culture. Several of Narendra Modi’s flagship schemes are handouts too and other State Governments run all sorts of cash subsidy schemes. But nothing has ever come close to the scale of Gandhi’s proposed scheme which, at almost four lakh crore, will account for almost three per cent of India’s Gross Domestic Product (GDP). Apparently this scheme for social equity and justice — lovingly called NYAY — has been thought up by several noted economists but will it work?
That is a million dollar, rather a multi-billion dollar question. If this plan supersedes several other schemes and is driven by an Aadhaar-based direct-benefits model, it might hold. For one, if this replaces existing programmes, cuts down on routine subsidies and becomes a single poverty-benefit driven one, it might even end up saving some money. Additionally, it will dramatically reduce the bureaucracy required to administer, implement and monitor the relief package on the ground. But for all these to happen, the fiscal burden needs to be absorbed and that can only happen if the GDP grows at about 7.5 per cent a year and produces commensurate tax and non-tax revenues. Other challenges lie in setting a template to identify the socio-economic strata considering there are too many variables in a country like India. For without percolation, this would vapourise into thin air. Besides, executing what Gandhi calls a “surgical strike” on poverty might involve cutting expenditure for other schemes and those related to the social sector are usually the first to face the axe. Can we afford compromises in spending on public health and education? Undoubtedly, Gandhi is hoping to take advantage of several steps taken by the Modi government, notably the Jan Dhan Yojana and increased digitisation. But there have to be measures put in place to ensure that the beneficiaries do not develop a dependency on the State and should be weaned off as soon as possible, maybe after a few years, to make sure that they do not live lazily and try and look for methods of self-improvement and employment. For without job creation, a dole economy serves no purpose whatsoever. As it is, joblessness is currently on record highs and there is lacuna in training our youth to be industry-ready with routine skilling failing to get the desired results. So this will not be an easy promise to deliver on. First, Gandhi has to win the election. Modi had in 2014 promised Rs 15 lakh in the account of every Indian but that never came to fruition. However, there is still a chance that he competitively implements or promises something similar in his campaign.