Former Finance Minister P Chidambaram. (Source: PTI)

Congress Beats BJP To Income Guarantee Plan But Leaves Math To Manifesto

Jan 29 2019, 2:59 AMJan 29 2019, 2:59 AMJanuary 29 2019, 2:59 AMJanuary 29 2019, 2:59 AM

The Congress which beat the BJP to announce a minimum income guarantee scheme on Monday, will divulge the details only in its election manifesto.

Making a distinction between the Uniform Basic Income and the Minimum Guarantee Scheme, former Finance Minister P Chidambaram said the Congress’ proposal is progressive in terms of the fund transfer. He did stop short of discussing the financial implications in detail. “All I can say is that it is doable”, said Chidambaram in an interaction with BloombergQuint.

We will do the math when we are in government. Because all the information will only be available when we are in the government. Once we have a number and we are in the government and we assess the resources and the sources of revenue, we will tell you exactly how to implement it.

P Chidambaram, Former Finance Minister

Congress President Rahul Gandhi yesterday promised a minimum income guarantee scheme for the poor if they are voted to power. Arvind Subramanian, India’s former chief economic adviser, had floated the idea of a universal basic income for the poor in the Economic Survey for 2016-17. The Congress’ promise is not exactly the same, according to Chidambaram.

"What we are talking about is a nationwide scheme which is an adaptation of the universal basic income idea. It is not UBI," he said. "Under UBI the same amount of money is given to everyone, including you and me. This minimum income guarantee is progressive. Once you agree upon a minimum level of income a family must have depending upon the distance of the family's current income from the desired income, that gap will be covered under the scheme."

Some families will be 10 percent below the minimum level, some 30 percent and some 70 percent. So the amount that will reach each family will obviously be different.

P Chidambaram, Former Finance Minister

Chidambaram also said that some of the “demerit subsidies” will be terminated to make fiscal space for such a scheme. "Take for example ICDS (Integrated Child Development Services). It is a scheme intended to achieve certain objectives. As long as those objectives are valid and good that scheme will continue. But some schemes will outlive its utility," Chidambaram noted. "So we will ask ourselves in May or June, which are the schemes that have outlived their utility. And whichever are the ones that continue to deliver the outcomes, those schemes will continue."

Therefore each scheme designed to achieve certain objectives as long as the objectives are good and valid they will be continued.

P Chidambaram, Former Finance Minister.

The senior Congress leader added that the government will have to "rearrange" its priorities, and when it does that, fiscal space will automatically open up for such schemes. "We find resources to fund a bullet train of Rs 1 lakh crore. We find funds to send a mission to moon and Mars. I am not questioning the correctness of those ideas in this moment. If we can find funds for those schemes, we can and we must find funds for what I am proposing and what the Congress President proposed earlier today. We can do it."

Congress Beats BJP To Income Guarantee Plan But Leaves Math To Manifesto

Watch the full interview here: