The leader of India’s main opposition Congress party, Rahul Gandhi, promised on Monday to provide the poor with a minimum income if Congress wins an upcoming general election, a pledge the ruling party dismissed as an unaffordable gimmick.
Congress officials said the proposal would help eliminate poverty and could be fulfilled with funds now spent on food subsidies and other programs that often do not reach the poor.
“We have decided that every poor person in India would be guaranteed a minimum income after the Congress forms the government in 2019,” Gandhi told a farmers’ rally in the central state of Chhattisgarh.
“No one will go hungry in India, no one will remain poor.”
Anger over joblessness and economic hardship, especially in agricultural areas, has turned the national election due by May into a tightening race between Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) and Congress.
The BJP dismissed Gandhi’s promise of a basic income.
“Where will the money come from? He’s promising the moon to fool the people,” said Gopal Krishna Agarwal, a party spokesman specializing in economic issues.
He said the government had looked at the issue of a basic income in 2014 but concluded that eliminating all subsidies would provide only enough funds to pay 6,000 rupees ($84) per family per month, not enough to feed them.
Modi’s proposal
Modi’s administration is weighing measures of its own to woo farmers, small-business owners and those who are less well-off, expected to be unveiled in its final budget before the election.
A government economic adviser, speaking on condition of anonymity, said Gandhi’s promise showed the “competitive populism” among politicians, which raises concern that whoever wins, India may breach goals to rein in its fiscal deficit.
Providing the poor with a universal basic income is an idea that is gaining attention in wealthier countries such as Finland and France. India has had rapid economic growth but is still home to one in three of the world’s extreme poor, with millions more at risk of becoming poor from an emergency medical payment or bad harvest.
Luke Martinelli, research associate at the Institute for Policy Research, University of Bath said the Congress move was significant, although short of universal coverage.
“Obviously, a means tested guaranteed income for the poorest is very different from a universal basic income per se. Having said that, obviously, in terms of income security there are some significant overlaps and this will be treated with enthusiasm, I’m sure, by the basic income community,” he said.
Reallocating funds
Congress says diverting funds from India’s expensive subsidy programs would provide enough money to eliminate poverty.
India’s 2018/19 food subsidy bill alone was estimated at 1.7 trillion rupees, roughly 7 percent of total federal spending.
“We do not want two Indias in this country. There will be only one India and the Congress Government will ensure a minimum income to every poor person in the country,” Gandhi said.
Former Congress finance minister P. Chidambaram said the party will find the resources to implement the promise.
“The poor of India have the first charge on the resources of the country,” he said.
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