Journalism of Courage
With the BJP arguing that the minimum income guarantee scheme promised by the Congress was not implementable, former Prime Minister Manmohan Singh on Saturday said the scheme will not be a strain on the economy and that there will be no need for any new taxes on the middle class to finance NYAY.
Issuing a statement as part of the Congress’s attempts to project an economic narrative against the national security narrative of the BJP government, Singh said that NYAY was a powerful idea with dual objectives —- “to wipe out the last remnants of poverty and to restart stalled economic activity in our nation”.
He said the scheme was conceptualised after “much thought and consultations with experts” and that the Congress is committed to fiscal discipline. “NYAY scheme will cost between 1.2 per cent to 1.5 per cent of GDP at its peak. Our nearly $3 trillion economy has the fiscal capacity to absorb this expenditure. There will be no need for any new taxes on the middle class to finance NYAY. The economic stimulus that NYAY will provide will further help in fiscal discipline,” he said. Follow more election news here.
Singh said the scheme will not just empower the poor with economic freedom and choice and usher in an era of a minimum income guarantee and help create a new social contract for a new welfare state, but also help restart the economic engine that has come to a stop today. “Money in the hands of the needy will stimulate demand in the economy, which can then lead to increased economic activity and job creation, referred to as the Keynesian effect by economists. At a time when private investment and industrial production are low, NYAY can help bring our economy back to life and create new factories and jobs,” he said.
