Monday, March 1, 2021
Home Economy and Finance Rahul Gandhi’s economist advisor says high inflation is good for economy, NYAY scheme will...

Rahul Gandhi’s economist advisor says high inflation is good for economy, NYAY scheme will be funded by high taxes and inflation

The economist said that stopping the “inflation tax” by the NDA government has hurt the economy badly.

As the main election promise for Lok Sabha elections, the Congress party has announced a minimum income guarantee scheme, the Nyuntam Aay Yojana (NYAY). According to this scheme, 20% poorest people in the country of 5 crore families will be paid Rs 72,000 per year. This means an outgo of Rs 3,60,000 crore per year, but the party didn’t provide details of how they propose to fund this massive scheme. Now noted economist Abhijit Banerjee, who advised the Congress party on the formulation of the scheme, has made some startling revelations about the thinking behind the scheme.

In an interview with Times Now, Banerjee said that the NYAY will have to funded by new taxes. He said that at present India’s fiscal deficit is so large that the scheme is simply not sustainable without raising taxes.

When asked whether the NYAY will have to be funded by a tax or a series of taxes, Banerjee replied, “that is correct”. He also said that India will have to have new fiscal resources, saying that the country is at present “undertaxed”. He said that India needs to desperately raise taxes irrespective of the NYAY scheme. He also talked about expanding the tax base.

When asked whether the scheme will be viable without increasing taxes, Banerjee tried to avoid the question saying that the economy itself is not viable without increasing taxes. Nothing is viable without raising taxes, he emphasised, implying that the minimum income guarantee scheme is also not viable without increasing taxes.

Banerjee also said that India has been hurt by low inflation during the NDA government, and budgets of NDA government are not viable. He said that stopping the “inflation tax” by the NDA government has hurt the economy badly. He said that during UPA government, although the interests were high, due to the use of “inflation tax” by the government, the share of government debt in GDP was falling. According to Banerjee, now that the NDA government is not using the “inflation tax”, it has meant there are few sources of revenue for the government.

Abhijit Banerjee also said that the implementation of NYAY will mean that lots of current welfare programs will have to be scrapped. He said that many of the current schemes have no purpose, and nobody knows what their purposes are, and they will be replaced by NYAY. He said that subsidies provided for fertilizer, power, water etc are distortionary subsidies, and they need to go. Banerjee said that these subsidies are not good for the economy, they are not good for efficiency.

From the comments of economist Abhijeet Banerjee, it is clear that for the Congress scheme to be implemented, the government will have to increase taxes, raise inflation, and scrap existing welfare schemes, something which Congress party is not telling the people while talking about it.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

Searched termsAbhijit Banerjee
OpIndia Staff
Staff reporter at OpIndia

Related Articles

Trending now

Madhya Pradesh is preparing to change the names of Bhopal, Idgah Hills, Obedullahganj, Begumganj and others: Report

The BJP Government in Madhya Pradesh is preparing to change the names of numerous places at once, which includes Bhopal.

Congress IT cell passes off old images of left parties rally to claim lakhs of people attended their rally in Bengal

Several Congress shared images of a political rally claiming lakhs of people had gathered in Kolkata for a Congress rally

Gujarat local body polls: State Congress President Hardik Patel could not vote for his own party. Here is why

Earlier, sedition accused Hardik Patel had said that Congress has not been able to utilise him fully.

Watch: Mother of BJP worker recounts the horror of Friday when Trinamool goons attacked her and her son

Visuals of the old injured mother of the BJP worjer has caused much anguish among people on social media

Punjabi daily Rozana Pehredar tries to whitewash atrocities of Khalistani terrorist Bhindranwale

Rozana Pehredaar compared Bhindranwale with revered Sikhs like Baba Deep Singh and Amar Shaheed baba Naudh Singh

Ghulam Nabi Azad praises PM Modi day after show of strength in Jammu, netizens take potshots at Congress party

Ghulam Nabi Azad hinted at the lack of 'reality check' within the party while praising Narendra Modi for not forgetting his roots.

Recently Popular

Did Aamir Khan’s daughter Ira Khan elope with her Hindu servant? Here is the truth

The image that is being used to claim that Iran Khan has 'eloped with her Hindu servant' was originally shared by Nupur Shikare, her fitness trainer. The two were posing on the occasion of Diwali.

US President Joe Biden casually drops the N-word during Munich Security Conference, accused of racism on social media

The N-word is considered as one of the hateful words that were first uttered in the 17th century. Its origin can be traced back to the Spanish word 'negro', which is often used by white supremacists to deliberately offend the African-American community.

Father of Richa Bharti, the girl who had refused to distribute Quran to secure bail, shot dead in native Bihar village: Read details

The father of the daring Bihar girl Richa Bharti has been shot down by assailants in her native village of Nalanda district in Bihar.

“A contest between my ball and your ball”: Netizens in splits after comments of Harsha Bhogle go viral

Harsha Bhohgle said that a cricket contest should be between bat and ball, not between bat and bat or ball and ball

Spokesperson of Samajwadi Party resigns after workers abuse his wife for sharing anti-Akhilesh Facebook post: Details

Anil Yadav of Samajwadi Party has resigned from the party after his wife, Pankhuri Pathak, was abused by SP workers.

‘I’m Akhlaq you killed for one cow’: Islamic terror outfit Jaish-ul-Hind claims responsibility for placing bombs outside Mukesh Ambani’s residence

In the threat message that is addressed to the Ambanis, the Jaish-Ul-Hind terrorists said, "Next time the SUV will ram into your fat kids car you if don't agree to the demands now".
- Advertisement -


Connect with us