29/01/2019 3:00 PM IST

Congress Explains How Rahul Gandhi's Minimum Income Plan Will Actually Work

Congress MP Rajeev Gowda said in an interview that Socio-Economic Caste Census and other data will help target families below a certain income threshold.

A woman labourer pacifies her child while cleaning a manhole on a sidewalk in Mumbai. The number of poor people in India is disputed, but the existence of a stubbornly persistent poverty on a substantial scale is not.

On Monday, Congress president Rahul Gandhi announced at a public meeting in Chhattisgarh that if voted to power in the upcoming general election, his party would guarantee a certain minimum income to every poor person in country. Both the substance and the timing of Gandhi’s announcement drew attention—the idea of a universal basic income has been debated in India’s police circles for some time now, and the Narendra Modi government will present the last budget of its current term on Friday. There was speculation that there may be an announcement of this nature then. 

Professor Rajeev Gowda, Rajya Sabha MP, member of the Congress’s Manifesto Committee for the Lok Sabha election and head of its Research Department, told HuffPost India in an interview that it is understandable if Gandhi’s announcement is seen as a “well-timed, pre-emptive strike” before the budget. He also drew a distinction between the minimum income guarantee and the universal basic income proposal.

“This is not universal at all. Universal means you and I will get some. This is a targeted thing for the poor,” he said.

Edited excerpts from an interview:  

What does the promise of a minimum income guarantee for the poor mean in practical terms?

These are early days and a lot of implementation-related fine tuning will be done. But the basic principle is, if you’re poor, we are not going to let you suffer. We are going to reach out to you and lift you up to a certain level so that your basic life is taken care of and you can start focusing on education, healthcare, aspirations and jobs. That’s the real thrust.

As a contrast, you take the Economically Weaker Sections reservation. The definition for that is very broad so it would probably benefit the well-to-do than the poor who really need it in that section. So that’s more like a jumla. Our idea will be much more finely targeted. Today it is possible thanks to Socio-Economic Caste Census, other kinds of data available plus bank accounts and Direct Benefits Transfer, other schemes already operating under this government, it is possible to finely target certain families below a certain income threshold.

If your income is Rs 10,000 in the family and we believe that your income should be Rs 25,000 then you will get a bank transfer of Rs 15,000. If we say your income should be Rs 25,000 and you are at Rs 22,000, you will only get Rs 3,000. These are, of course, hypothetical numbers and I am giving them as examples.

Basically, there are 2-3 steps in this. One, identifying what is the cut-off. Who is poor? What is the definition? Second, what is the minimum income that we would like to see them have? And then what is their current income and how do we top up the difference? Thanks to technology today, it should be much more manageable.

Among the things that is also being speculated is that the minimum basic income will essentially be a sum of around Rs 1,500. Is there any truth to this?

This could be seen as the other approach. But there could be multiple approaches to this and the details of are yet to be worked out. The top-up idea is one of the ideas. Different approaches have different fiscal implications.

Hindustan Times via Getty Images
Gowda (left) with P. Chidambaram, head of the Congress's manifesto committee and former finance minister.

How is this not a dole?

Personally for me, words like dole, sop, populist―for me, those words are meaningless for a government. The government’s job is to provide a social safety net. The government’s job is not to set up companies and compete. Government’s job is to look after those who are left behind, fallen through the cracks. If you don’t show that much empathy towards your fellow citizens... the chattering class may say what they want. More than that, remember, if the government doesn’t signal to the people that it cares for the poor, there will be a lot of unrest. You won’t be able to run a business either.

Is this a deliberate announcement by the Congress President to preempt the much speculated announcement by the Modi government in its interim budget?

This idea is the Congress President’s vision and part of deliberations going on for the Congress party’s Manifesto. What the Modi government chooses to do or not does not affect us. We do what we care about and are committed to. I can understand if people see this as a well-timed, pre-emptive strike.

How is this similar or different to the Universal Basic Income idea floated by the ex-CEA Arvind Subramanian in the Economic Survey of 2016-17?

This is not universal at all. Universal means you and I will get some. This is a targeted thing for the poor.  Even today, there is a poverty line, forget the technicalities of it. We are concerned about the 15-20% of the population which is still poor. We have to see it in that context.

Thanks to Socio-Economic Caste Census, other kinds of data available plus bank accounts and Direct Benefits Transfer, other schemes already operating under this government, it is possible to finely target certain families below a certain income threshold.

One of the concerns raised is also about fiscal discipline; whether we can afford a scheme like this. How do you respond?

We will work it out in such a manner that it (becomes feasible).

Does this mean cutting down on welfare programmes?

See, we have got to do a lot of fine tuning about this and these questions will be answered once we come out with the finer details of the idea.

But you are not ruling it out. Would it mean cutting down expenditure on things like food security, for instance?

Improving subsidies, rationalising them, all that (is part of this). But I think the aim is to see that other leakages and inefficiencies are addressed in the overall subsidy architecture.

Does this mean that the Congress is doing away with its rights-based entitlement framework as seen during UPA years to a cash transfer approach?

No no. Those things are very much there. These all operate in tandem. That’s why I said, we will give you a floor. A minimum income. After that, if you still want to work in MGNREGA, nobody is stopping you. So the rights-based approach is very much there. MGNREGA will continue to exist as an additional income. It is a demand-driven scheme and people are free to look for different work options beyond MGNREGA as well.

In the context of raising resources and ensuring that the fiscal impact of this is not adverse, it was suggested by Praveen Chakravarti, the head of Congress’s Data Analytics department, that a combination of rationalisation of expenditure and increased revenues is being considered to fund this. Exactly what came up during deliberations?

All I can say is that we are committed to fiscal discipline. We will do this but the details, numbers etc can be shared once it is final.

If your party comes to power after the polls, how soon do you think you will be able to implement this?

It will have to be put in the full budget.

In the very first budget?

I expect so.