Competitive
Poverty Alleviation Is The Ticket
Will the proposed Nyuntam Aay Yojana (NYAY), the subject of
both consternation and heated discussion, be a game-changer for the
Congress? Rahul Gandhi likes to think
so. He calls the Rs. 72,000 per annum dole for an estimated 25 crore poor
people (five crore families), who earn Rs.12,000 or less a month, “a surgical
strike on poverty”.
He says, with his usual disregard for the facts, and a
pitch at being a Robin Hood figure in a Gandhi cap, that if the Modi government
gives away money to the rich, the Congress would do so to the poor. That there
is little hope of Congress coming back to power on its own in 2019 is another
little factoid he chooses to ignore. But for the moment, he thinks he has found
the magic bullet.
Gandhi says Congress will implement the fiscal mathematics
busting scheme if it “comes to power”. He says Congress has consulted leading
economists. Celebrity economists Angus Deaton and Thomas Piketty are mentioned
and Raghuram Rajan too. Rajan has gone
on record saying that NYAY is fiscally imprudent and very hard to implement,
but also that space should be made for such schemes. Nobel laureate Amartya Sen’s poverty
alleviation economics may also have been an influence on the contours of NYAY.
But as timings of announcements go, is what is good for the
goose also good for the gander? If not, then how is this highly politicised
announcement, with its eye firmly on swaying the voter, not a violation of the
code of conduct?
At the same time, the Congress has been complaining to the
Election Commission (EC) about the release of the Modi biopic and the Tashkent
Files soon after , the latter being a film on the rumoured Congress conspiracy
to murder Prime Minister Lal Bahadur Shastri and clear the path for Indira
Gandhi. The movies, slated to be released in the first half of April, even as
some places go to the polls on April 11th, are said, by Congress, to
be an attempt to influence the electorate through the election season up to May.
The Niti Aayog Vice-Chairman Rajiv Kumar has been quick to
sharply criticise both the content and the timing of NYAY. And it has promptly
earned him a notice for an explanation of his comments from the EC.
But the competitive welfarism with an eye to the 2019
general elections has not begun with NYAY. The Modi government’s humungous
universal health insurance programme, Ayushman Bharat-National Health
Protection Scheme (AB-NHPS) announced on 15th August 2018, covers about
50 crore people, from the poorest of the poor. This scheme, with a government
funded insurance cover of Rs. 5 lakhs on a floater basis per family, for hospitalization
and secondary and tertiary care, has already benefited millions.
The Modi government, has in recent times since, also unveiled
a universal pension plan for informal
sector workers - the Pradhan Mantri Shram Yogi Maandhan(PMSYM) that will, over
the next five years, embrace some 10 crore people. And then there is the
PM-Kisan Scheme, with a cash dole of Rs.
6,000 per annum paid in three tranches, helping an estimated 12 crore small
farmers with land holdings of 2 acres or less. The first tranche of Rs. 2,000
each, costing the exchequer Rs. 75,000 crores, has already been paid into the
bank accounts of the small and marginal farmers.
Will Rahul Gandhi’s brand new attempt at mega populism put
Narendra Modi’s modest dole in the shade?
Early reports show cautious anticipation of the proposed freebie along
with skepticism in equal measure. The Congress promises of small farmer farm loan
waivers have virtually not been implemented in the states it has recently won.
And then there are a clamour of questions. Is this a full
dose scheme of Rs.72,000 for all the eligible as some Congress people have said,
or a top-up based on the sliding scale of actual earnings that Rahul Gandhi has
announced? How will earnings in cash be verified?
How will the data on
applications and qualifiers be handled? How much inefficiency and middle-man
corruption are we going to see? Will NYAY cannibalise the federal allocations
for other programmes? Will it flounder on the shores of various states,
reluctant to pony up their share, just as it has happened with Modi’s health
insurance scheme in West Bengal and other states? Will it become a bone of
contention at all, because a UPA win and government formation in May 2019 is
far from certain?
It will cost at least 2% of GDP, almost a fifth of India’s
tax collections at present, or 13% of the Union Budget –some 3.6 lakh crores.
Consider than the defence budget is at 11% of the Union Budget now, though many
purchases of equipment and weaponry are being paid for outside the annual
budget allocations.
Congress has been busy reimagining itself as the main contender
despite several headwinds. Its position and acceptability as leader within a
future winning UPA line-up is uncertain. Will it better its 2014 tally and if
so by how much? And even if it is the single largest component of the UPA,
Rahul Gandhi himself may have to settle for a back-seat for the sake of
cohesion. How many of his partners, let alone those in the NDA will be willing
to implement NYAY after the elections? But it appears that the main purpose of
NYAY is to win the elections rather than worry about its implementation.
Modi’s welfare and poverty alleviation schemes, including
many started by the UPA, have taken care to not adversely impact the deficits
or inflation. More money has also been poured into long-standing schemes like
MNREGA in successive Union Budgets over the last five years. And yet, inflation
has more than halved. The fiscal deficit has been lowered from 5.1% to 3.4%, and
was headed towards 3.2% if it wasn’t for the recent farmer dole announced in
the Interim Union Budget of February 2019.
Congress, on the other hand, is banking on future growth in
the economy to cushion the impact of
NYAY. It ignores the inflationary effect of minimum universal incomes seen in
other countries, and the economists that would argue doles are unproductive
expenditure.
The broader picture of a socialist hangover made up of
subsidies and grants is a historical legacy that is very hard to shake off.
This even though it could destroy the economic health of the country and ruin
its international ratings in a global environment. And yet, with a huge and
ever growing population of over 1.3 billion, poverty alleviation in all its
forms must be a major goal of any ruling dispensation. Besides, the electorate
has grown used to the government and opposition wooing it with benefits.
There is a case however to achieve a balance between
economic imperatives and populism. The Modi government has done this admirably,
but the Congress has traditionally worried less about the effects of its
largesse. Is the electorate mature enough to see through the short- term
benefits of doles which are invariably inadequate as contrasted with emphasis
on growth and development?
Past experience would suggest otherwise, but the country
has a new demographic of young, aspirational people. Will they be able to
outweigh the appetite for benefits from the poor? Did they vote for Modi in
2014 because of his promised benefits or his vision for Vikas? Does the
majority that supports him as prime minister today do so because they expect
him to accelerate development?
It certainly appears so, with considerations of national
security also playing an important part, particularly when contrasted with the
weak showing of the various other leaders in the Opposition. Even then, it is clear neither side is taking
any chances on its competitive welfarism.
It is advantage Modi as the incumbent prime minister who is
seen as tireless and honest. As someone who has curbed corruption and delivered
in good measure on several of his promises.
Rahul Gandhi, on the other hand, has absolutely no track
record in governance. Nevertheless, Congress has ruled this country for decades
in the name of the poor, with indifferent results on their upliftment. For a
scion of the grand old party to not use the allure of this tried and tested
formula on voters would be unlikely.
The question is, has
the country decided it wants much more than a modest hand out promised at
election time?
(1,400
words)
For: The
Sunday Guardian
March
27th, 2019
Gautam
Mukherjee
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