Rahul’s income plan for poor may cost more than Budget 2019’s subsidy bill

Congress’ proposed minimum income guarantee scheme will reportedly require Rs 3.5 trillion at its peak

If fully implemented, Rahul Gandhi’s proposed minimum income guarantee scheme, or NYAY, would cost more than Interim Budget 2019’s total subsidy expenditure of Rs 3.34 trillion. Its envisaged annual outlay, at a reported Rs 3.5 trillion, would amount to about 1.7 per cent of the Budget’s estimated GDP for 2019-2020 at Rs 210.07 trillion — or about half of the fiscal deficit for 2019-2020 at 3.4 per cent of GDP.

Congress President Gandhi on Monday said that if his party were to come to power at the Centre, it would provide a minimum income of Rs 6,000 per month to 20 per cent poorest households.(Economy News)

At its peak, the cost of the Congress’ proposed scheme would be nearly six times the 2019-2020 Budget Estimates for the outlay on the Mahatma Gandhi National Rural Employment Guarantee Program (MGNREGA) at Rs 60,000 crore. In January 2019, the government made an additional allocation of over Rs 6,000 crore to MGNREGA, taking the total allocation to Rs 61,084 crore, which was highest ever in a financial year. Congress reportedly intends to continue MGNREGA even if the minimum income plan is implemented.

It would also amount to over 4.5 times the cost of the Rs 75,000-crore Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme. Under the latter, Rs 6,000 per year would be disbursed in three instalments to around 125 million small and marginal farmers who hold cultivable land of up to two hectares.