On 25th March, Rahul Gandhi announced the Congress party’s main promise for the 2019 Lok Sabha elections, a Minimum Income Guarantee Scheme. Addressing media, the Congress president had said that the scheme will ensure that poorest 20% of India’s population will be ensured a monthly income of Rs. 12,000 with this scheme. He had explained that each household in bottom 20% in terms of income will be paid Rs. 72,000 per year, and this will be paid as gap funding to ensure that monthly income a family becomes Rs. 12,000. For example, if monthly income is Rs. 8000, Rs. 4000 will be paid, and if monthly income is Rs 6000, the government will pay Rs 6000 so that the income becomes Rs. 12000. The scheme will benefit 5 crore families or 25 crore Indians, Rahul Gandhi claimed.
But the chairperson of Data Analytics Department of the Congress party Praveen Chakravarty posted some detail about the scheme which contradicts the explanation given by Rahul Gandhi. Chakravarty posted on Twitter that every poor family in the bottom 20% will get the same, uniform amount of Rs. 72,000 a year.
1: Every poor family in the bottom 20% will get the same, uniform amount of ₹72000 a year
2: Beneficiary identification at every decile is possible
3: Will be a federal scheme with state participation
4: Will be rolled out in phases https://t.co/oFzzKoqcJz
— Praveen Chakravarty (@pravchak) March 25, 2019
This is completely opposite of what Rahul Gandhi had said earlier in the day. Paying a fixed amount per year and paying the differential amount between actual monthly income and Rs 12,000 is totally different, and Rahul Gandhi and Praveen Chakravarty are providing contradictory versions of the same scheme.
Congress leader Randeep Singh Surjewala also addressed a press conference today contradicting Rahul Gandhi. He clarified that this scheme is not a Top-Up scheme as claimed by Rahul Gandhi, and 5 crore families will receive a fixed amount of Rs. 72,000 per year. Surjewala also added a new dimension to the scheme, saying it will be a women-centric scheme, and Congress Party will deposit Rs. 72,000 in the bank account of the woman of the family.
Praveen Chakravarty also revealed a very important detail of the scheme which was not disclosed by Rahul Gandhi, that the scheme will be a federal scheme with the participation of states. This means, states will have to bear part of the expense of the scheme, and it will not be entirely funded by the central government. This provision plants the seed of divide between centre and states, as many states may not be willing to participate in such an expensive scheme. And if states ruled by opposition parties refuse to participate, the Congress party retains the opportunity to attack such opposition parties saying they are refusing to pay the poor their due.
Congress party’s Data Analytics chairperson also made a sensational claim which does not pass the basic test of logic and arithmetic. He said, with this scheme, “no Indian family will fall below a minimum income threshold of Rs.12000 a month”.
But for this be true, the number of families with monthly income of Rs.12000 at present has to be 20% of the total number of families in the country or less than that, and the rest 80% or more families must have an income of Rs. 12,000 or more per month. The party itself says that the scheme will be limited to 20% poorest families in the country which comes to 5 crore families, so if families with Rs. 12,000 as monthly income exceeds 20% or 5 crores, not all of them will be covered under the scheme.
As per the World Inequality Database, the average income of the bottom 50% of the Indian population was around Rs. 43,000 in 2015, and the average income of the next 40% was Rs. 1,06,795. This means a whopping 90% falls below the average monthly income of Rs. 12,000. Therefore, even after the Congress scheme raises the income of the bottom 20% to Rs. 12,000, there will be still a large portion of Indian population earning less than Rs. 12,000 per month.
Moreover, there are a large number of households earning below Rs. 6,000 a month, and even if they are paid Rs. 72,000 per year, their monthly income will still remain below Rs. 12,000. For example, if a family earns Rs. 4,000 per month, after getting the benefit of this scheme the family’s income will go up to Rs. 10,000 per month, not Rs. 12,000.
Hence the claim by Praveen Chakravarty that no Indian family will fall below the minimum income of Rs. 12,000 a month is completely baseless and misleading, and not based on reality.
The proposed scheme of the Congress party has another logistical nightmare which needs to be addressed. The scheme is based on identifying the bottom 20% of the population in terms of income but at present there no comprehensive data on the income of each citizen. What we have are various surveys which are done on samples of various sizes, and there is no detail income data at present. Other than those who work in the organised sector, there is no dependable source to obtain income data of people. The census of India does not collect income data of households. This means a complete census of income of Indian population will need to be undertaken to identify the beneficiaries of this scheme. As that will be a time-consuming job, even if somehow Congress party comes to power and implements this scheme, it is unlikely that it will be rolled out all over the nation by the time the term of the government ends.