On 25 March, Congress president Rahul Gandhi declared the Nyuntam Aay Yojana or NYAY scheme. The idea is to offer ₹6000 every month to the bottommost 20% of the population of around 5 crore families or 25 crore people if, voted into power. Rahul’s plan isn’t that of Universal Basic Salary (UBI). UBI is primarily a small amount of cash paid each month to every citizen of the nation, with no terms and conditions. With NYAY scheme, the idea is to pay cash only to the base 20% and not every citizen as UBI predicts.

Congress has an old tradition of making grand promises before elections. The average voters initially had faith in these promises, and elected the leaders, based on declarations and pre-election statements. However, when those promises were left unattended for years, the voters started to unite and now the votes are given to the party who works for them.

Today again Congress president utilized the expression ‘final assault on poverty’ to win the elections but, this time they won’t be able to attract the voters with these fake promises.

Here’s the reason why:

Indira Lao, Garibi Hatao

In 1971, Indira Gandhi approached India to vote in favor of her if they desired to get rid of poverty. Unfortunately, according to the World Bank in 2012, one of every five Indians continued to live in miserable poverty. ‘Indira Lao, Garibi Hatao’ has visibly remained a simple motto.

Nationalization of banks supervised by Indira Gandhi was believed to be yet another ‘assault on poverty’; it was an additional attempt to hold power. Less than 50% of Indians had bank accounts in 2014.

OROP

In 2004 announcement, Congress assured “One Rank One Pension” to our defence soldiers. Unfortunately, this scheme wasn’t executed and was just used as a medium to pursue the voters. The current government, on the other hand, has taken actions and has allocated Rs 35,000 crore after the complete execution of the plan. 

The Food Security Act implied allegedly realized in only 11 states until 2014. Post-2014, the NDA government implemented “The Food Security Act” over all states and Union Territories of India.

Loan Waiver Announcement

The loan waiver scheme announced by the UPA government in 2003, promised to keep farmers from falling into the nasty trap of debt. Later, its inability to give any arrangements clarifies that the declaration was a mere political inspiration without farmer’s welfare.

In the last couple of state elections — including Karnataka, Madhya Pradesh, Rajasthan, and Chhattisgarh —Congress performed better, but, in reality, there is an urgent need of reliability to address defaulting election promises which were made by UPA government. While farm loan waivers in Karnataka continues to being work in progress, most declarations made in the parties ‘vachan patra’, including Rs 10,000 as joblessness settlement for one youthful part for each family for a time of three years, are yet to commence.

Corruption

We have understood in the past, how the poor (who are the target audience in election campaigns) held deployed by local officials.

Rahul Gandhi’s NYAY scheme, according to me, this scheme will only increase the corruption nexus between receiver and officials. With lots of paperwork involved in the process of enrolment, it will ultimately have the possibility to benefit the ones who would offer bribes and commissions to get their names on the list. 

Also, another concern with NYAY scheme is, it is expected to cost ₹3.6 trillion or around 1.7% of the projected gross domestic product (GDP) for 2019-20. As Chidambaram had said, “Our calculation shows that it will not cross 2% of the GDP, it will be 1.8% of the GDP at any given point of time”. There’s a lot of cash involved in this scheme, and Congress government has not stated any sources of cash inflow. In financial matters, there is no free lunch; the primary concern is the place from where the cash would originate from. Congress has indicated getting rid of certain sponsorships, imparting the expense to the state governments, and building new duties. The total food, fertilizer, and oil subsidies in 2019-20 are ₹2.97 trillion, or 1.41% of the GDP.

Conclusion:

In my opinion, the major problem in the economy is employment; poverty reduction by income transfers is not a solution. Under NYAY scheme, families will have no motivation to work and increase their incomes. Once NYAY is incorporated, they would get the reason to stop working and avail the Rs 12,000 cash transfers. That’s the reason I feel cash transfers will not eliminate poverty and is not a long term solution. Instead, the schemes implemented by the Modi government have motivated people to work and set up their businesses & grow. The aim of the NDA government is, to make sure that every person in the country is working and is contributing his/her part in growth.