Congress's minimum income plan will eat into the vitals of economic growth

Written By: Lalit Shastri
Bhopal, Madhya Pradesh, India Published: Mar 27, 2019, 11:42 AM(IST)

File photo of Congress President Rahul Gandhi. Photograph:( ANI )

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It is a move that has nothing to do with channelising resources for building a robust economic infrastructure, improving education and skill development, creating jobs

Rahul Gandhi's sop of direct money transfer to 50 million poor families in the country as an electoral promise should rattle every right thinking and discerning Indian citizen.

One is seeing with a deep sense of concern, how a particular breed of politicians, represented by the Congress bandwagon led by Rahul Gandhi, is rapidly following theism of neopatrimonialism and doing everything to usurp and stay riveted to the seats of power.

There is a background to the Congress politics revolving around neopatrimonialism. The Hugo Chavez model of politics (the world is aghast by what's happening in Venezuela today) was followed to a great extent by the previous Manmohan Singh led UPÀ government at the Centre, presided over by the Congress party led by Sonia Gandhi and her band of loyalists.

Venezuelan President Hugo Chávez had crafted the Bolivian Missions focusing on social sectors and his populist policy included "redistribution of wealth". It is now clearly documented that in the early 2000s, when oil production brought rich dividends to the Bolivarian Republic of Venezuela due to soaring oil prices, the Chavez Government went on a spending spree on social programmes without caring a hoot for future eventualities. The upside of Chavez's Bolivian model was a big drop in inflation and unemployment and the downside, especially linked to the oil price collapse and the US sanctions is the economic turmoil that has gripped Venezuela, especially during the disputed second term of Nicolás Maduro, who succeeded Chavez in March 2013.

The Congress-led UPA government at the Centre, went a step ahead and put itself on the pedestal and all along pretended as if they were the only ones to shape the destiny of Indian people through newly created Acts passed by Indian Parliament to guarantee jobs, food, and education. While doing this they also aped the cash transfer policy that was being followed in Brazil and Mexico without bothering even an iota about its pitfall and the impact it would leave on the middle-class wage earners and the economic growth of the country.

It will be interesting to recall how on the eve of the 2014 Parliamentary election, UPA-II led by Manmohan Singh had launched the ambitious scheme of "direct cash transfer" of subsidy to bank accounts of beneficiaries with the then finance minister P Chidambaram describing the move as a "game changer".

During the run-up to the 2019 Lok Sabha election, Rahul Gandhi has announced that the poorest families in India will receive Rs. 72,000 per year. “We will wipe out poverty by guaranteeing a minimum income to Rs 5 crore to 20 per cent of the poorest families," he said.

The Congress functionaries are describing this as a historic decision. Addressing media persons at the Madhya Pradesh Congress headquarters in Bhopal on Tuesday, the chief spokesperson of the party for Madhya Pradesh, Shobha Oza, lashed out at the BJP leaders criticising Rahul Gandhi’s decision and dubbed their party as anti-poor. 

She was emphatic in pointing out that some front ranking economists have studied the intricacies involved, vetted and validated Rahul Gandhi’s decision for direct cash transfer to the poor. One of her co-spokesperson even came on the sidelines and said that former Reserve Bank Governor Raghuram Rajan and a few other top economists would soon be speaking in support of this policy.  

The input by the Congress spokesperson that in next few days some renowned economists are going to openly support the Congress party’s “direct cash transfer” plan to "wipe out poverty" would mean that these economists would be supporting a move that would eat into the vitals of economic growth in India.  

It is a move that has nothing to do with channelising resources for building a robust economic infrastructure, improving education and skill development, creating jobs and adding to the purchasing power of the people through multifarious economic activities and thereby improving their quality of life. If the Congress move brings in votes and power, it will benefit immensely the wheeler-dealers and agents in the corridors of power who are not used to living in the wilderness. Let's not talk of crony capitalists. One has seen them flourish everywhere under Congress rule.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

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