Under the "Adopt-a-family" scheme, 7 lakh families (28 lakh individuals) would receive a combined monetary benefit of Rs 3,500 crore, according to a calculation by economists at SBI.
Economists at State Bank of India (SBI) have recommended a scheme called "Adopt-a-Family", where taxpayers are incentivised to support a BPL family amid the pandemic.
"In this way a BPL family which is badly hit due to COVID-19 will get support of Rs 60,000 without any fiscal burden on Government," SBI's Economic Research Department said in a note.
Under the voluntary scheme, taxpayers (possibly those with an annual income of Rs 10 lakh and above) can provide a family with financial assistance for a specified amount each month (Rs 5,000 for instance).
India has around 70 lakh taxpayers who have the above mentioned annual income, and even if 10 percent opt for the scheme it can benefit around 7 lakh families, the economists said.
"To boost the scheme, Government can ideally incentivise say Rs 50,000 tax deduction over and above 80C limits to the taxpayer and nudge agents to adopt a poor family," the report said.
The 7 lakh families (28 lakh individuals) would receive a combined monetary benefit of Rs 3,500 crore.
The transactions can be monitored by bank accounts through payments enabled by Aadhaar.
The economists estimate that the government will have to forgo income tax worth Rs 1,050 crore, but the proposal would result in a consumption boom of Rs, 11,666 crore.
The scheme is in line with Prime Minister Narendra Modi's Jan Bhagidari (people’s participation) vision, the report said.