Rahul Gandhi’s announcement on minimum income for poor has nothing to do with budget: Chidambaram
Congress president Rahul Gandhi has promised a Minimum Income Guarantee (MIG) scheme for the poor if the party comes to power in 2019. HT spoke to former finance minister P Chidambaram, also the chairman of the Congress 2019 Lok Sabha manifesto committee, about MIG.Updated: Jan 30, 2019 07:41 IST
Hindustan Times, New Delhi
Congress president Rahul Gandhi has promised a Minimum Income Guarantee (MIG) scheme for the poor if the party comes to power in 2019. Aurangzeb Naqshbandi and Roshan Kishore spoke to former finance minister P Chidambaram, also the chairman of the Congress 2019 Lok Sabha manifesto committee, about MIG. Edited excerpts:
The timing of Rahul Gandhi’s promise of an MIG scheme is interesting. Was the party expecting something similar on these lines in the budget?
Our announcement has nothing to do with the interim budget. In fact, we ought not to expect anything in the interim budget. If this government breaks the convention and makes far-reaching announcements in the interim budget, that would be completely unconstitutional.
Mr Yashwant Sinha, their own party (Bharatiya Janata Party) member has pointed that out. Therefore, please do not link the Congress president’s announcement with the forthcoming interim budget. We are in the process of formulating a manifesto and the Congress president has articulated an idea that will find a place in it.
Has the party arrived at some kind of a figure on the cost and payments under the MIG?
Obviously not. We have a broad idea. We are not the first ones to discuss it (MIG). There is a whole body of work on Universal Basic Income (UBI) and quasi-UBI. There are eminent economists in India and elsewhere who have written about it. Dr Arvind Subramanian is one of them. We have looked at all that material...the time has come when such an idea can be implemented by the next government.
Will the MIG be like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) where the Centre gave 90% funds, or will the cost be equally distributed with the states?
We are not in government to discuss with the states. It is only when we form the government that we can discuss these things with the states.
This could be the first scheme where beneficiaries in urban areas might get more money than in rural India as the urban poverty line is higher than the rural poverty line.
We don’t know what the numbers will turn out to be. It is only when the party is in government that it will have access to all the numbers. The chief statistician said a couple of days ago that the new poverty figures will be published in June 2019... It will be able to consult with the state government who will have more information...to form a firm estimate of the number of people in rural and urban areas. Thereafter the scheme will be designed to meet the needs of the poor people. At this stage, it is an idea which has developed and the contours of the scheme will be revealed in the Congress manifesto...
The MIG scheme can turn out to be pro-cyclical unlike the MGNREGS, which was demand-driven and sees large demand when there is a slump in the rural economy.
Because poverty numbers do not come out everyday, the government will be committed to giving MIG payments no matter what is the state of the economy. The objective of MGNREGS was very different. It was to ensure that people who do not have any income at all that day or that week will have a minimum income that will ensure that they had food on their plate that day. The objective of MIG is very different. Between 2004 and 2014 we lifted 140 million people out of poverty. Now we have to make a determined drive in the last mile... The objective of this scheme is to eliminate abject poverty.
You have expressed confidence that the scheme can be financed. While direct taxes have shown growth, indirect tax collections haven’t . Do you see future tailwinds to economic growth and tax collection to fund such a scheme?
Why should I estimate the revenue performance of the next government using the benchmark of the current government? The benchmark of the present government is completely irrelevant. We are confident that a Congress government can find the sources.
Will the Congress manifesto also contain a promise on farm loan waivers?
Farm loan is state-specific and contextual...
There has been criticism the newly-elected Congress state governments have not implemented loan waivers fully yet.
They have been in government only for three weeks. Why should you do anything in a hurry and make mistakes? ...It was not anybody’s case that within 24 hours of the formation of the government, money will be given to the farmer...
First Published: Jan 30, 2019 07:13 IST