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LATEST NEWS UPDATES | Will Congress's NYAY Really Mean Justice for the Poor? -Anjana Thampi and Ishan Anand

Will Congress's NYAY Really Mean Justice for the Poor? -Anjana Thampi and Ishan Anand

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published Published on Mar 27, 2019   modified Modified on Mar 27, 2019
-TheWire.in

Any policy that seriously intends to reduce poverty and deprivation should increase social sector spending and look to universalise basic services.

On Monday, Congress president Rahul Gandhi promised a minimum income guarantee scheme or Nyuntam Aay Yojana (NYAY) if voted to power in the upcoming Lok Sabha elections. The proposal involves a transfer of Rs 72,000 per year to 20% of the poorest families in India. He claimed that this “is an extremely powerful, ground-breaking and well-thought through idea”. While all this sounds good, the devil is in the details.

Only time will tell if this is just another election promise or a serious policy proposal. It still needs to be discussed with some seriousness, as universal basic income (or its variants) is increasingly capturing the imagination of economists and policymakers around the world.

Rahul Gandhi claims that NYAY will “wipe out poverty from the country” – a tall claim to make when the proposal only targets 20% of families in the country. This is even lower than the pitiful and controversial poverty line that set the poverty rate at around 29.5% (Rangarajan committee) in 2011-12.

The 20% cut-off is extremely arbitrary. What about families who are not among the bottom 20%, but still fall below the frugal poverty line? Moreover, any poverty-based targeted scheme ignores lakhs of poor who are marginally above the poverty line and need state support for survival.

There are more issues that remain unanswered. How will the eligible households be identified, given that India does not collect income data at all? Hypothetically, India can start collecting data on income to implement this scheme. But it is extremely difficult to collect income data of all individuals on an annual basis. This is primarily because of the nature of the Indian economy, in which about 90% of the population is engaged in informal work, which does not have a fixed pay structure. The incomes of the self-employed, farmers, agricultural labourers, migrants and urban informal manual workers differ significantly from year to year.

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TheWire.in, 26 March, 2019, https://thewire.in/rights/congress-rahul-gandhi-nyay-minimum-income-guarantee


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