What Arun Jaitley Got Wrong While Calling Rahul Gandhi’s ‘Bluff’

NYAY promises benefits for the excluded poor. Is it a “bluff” still, dear Finance Minister?

Image of Rahul Gandhi and Arun Jaitley used for representational purposes.

(Photo: Kamran Akhter / The Quint)

Before calling the Congress’s poll promise of minimum income guarantee scheme a “bluff announcement”, Union Finance Minister Arun Jaitley should have read a few lines of the 2016-17 Economic Survey, that had a full chapter on the virtues of a guaranteed income scheme.

Quoting a study, the survey said that “more than 50 percent of rural households across India face one or more forms of shock, with the most prominent being aggregate shocks (crop loss, water borne diseases, loss of property, cyclones, drought, etc.).”

It added that “about 60 percent of individuals use personal savings to cope with these shocks. Government assistance comes a distant second with only close to 10 percent of individuals accessing it.”

The survey therefore advocated “a guaranteed basic income” that “can provide a basic form of insurance.”

Subsidy Schemes Aren’t The Same As Minimum Income Guarantee Schemes

The direct benefit transfer (DBT) existed in 2016-17 also, and so did several welfare schemes. DBT alone is supposed to have benefited 36 crore people with the total disbursal in excess of Rs 74,000 crore in 2016-17. Yet, only a handful of needy households could get access to government assistance when required. Why? Because most of the subsidy schemes miss targeted beneficiaries by miles, and they also suffer from huge misallocation. The Economic Survey candidly admits as much.

Other than calling the promise of Nyuntam Aay Yojana (NYAY) a “bluff”, the finance minister also claimed that his government disburses a sum of Rs 5.34 lakh crore, which is 1.5 times more than what the Congress has promised. Arun Jaitley’s tweet gives a complete breakup of what all his government gives every year.

The FM, however, forgot to mention that subsidy schemes are not quite the same as minimum income guarantee schemes.

That the benefits of most of the doles he has listed out—from selling railway tickets below cost, to providing access to subsidised food grains at fair price shops—are meant for the entire population, and not just for the poor. And most of these welfare schemes have existed for years.

Very Little For Poor Among The Schemes Under DBT

The government claims to have transferred nearly Rs 1.9 lakh crore directly to the 55 crore intended beneficiaries in 2018-19. As many as 440 schemes of 55 ministries are covered under the Direct Benefit Transfer. However, if you take a look at the schemes covered, you will realise that many of them do not touch the lives of the poor at all.

Let us take a look at some of the schemes covered under the DBT:

• ICAR Emeritus Professor
• India-Afghanistan Fellowship
• Short-term and Summer Training Programme at Advanced Centre for Treatment, Research and Education in Cancer
• Coffee Board
• Agri Clinics and Agri Business Centres
• Dairy Entrepreneurship Development Scheme
• Distinguished Biotechnology Research Professorship Award
• Rajbhasha Gaurav Purashkar Yojana
• Payment to Contractual Staff

A perusal of the list shows that many of the schemes are fellowship programmes run by different ministries. Some of them are related to promoting sectors like fisheries, dairy, coffee, tea, tobacco and spice. Anything for the poor here which the Congress’s income guarantee scheme seeks to cover?

The DBT list, however, includes schemes like PM Kisan, direct cash transfer for food grains, fertiliser subsidy and rural employment guarantee scheme, whose benefits can potentially reach some of the poor. Since the benefits of PM Kisan are meant only for land-owning small and marginal farmers, it excludes landless households.

NYAY Promises Benefits For the Excluded Ones

According to the 2011 Socio-Economic Caste Census, of all the households in the country, as many as 39 percent of them are of “landless households deriving major part of their income from manual casual labour.” Isn’t it fair to assume that there is very little in the PM Kisan Scheme for very poor landless households? How did the finance minister arrive at the Rs 5.34 lakh crore figure?

Other than the DBT, Arun Jaitley has also listed schemes like food and fertiliser subsidies and PM Kisan, and arrived at this figure which is already being given to the people.

In any case, fertiliser subsidy is given to companies to keep the retail price of nutrients below the cost. And the bulk of food subsidy is spent on procurement of food grains, storage and distribution through the chain of fair price shops. Both these subsidies are meant to keep the food prices down. Do they benefit the poor alone? Once again, the 2016-17 survey gives us a picture. It says: “An estimate of the exclusion error from 2011-12 suggests that 40 percent of the bottom 40 percent of the population are excluded from the PDS. The corresponding figure for 2011-12 for MGNREGS was 65 percent.”

The Congress’s NYAY therefore promises benefits for the excluded ones. Is it a “bluff” still? Will the FM still say that his government gives a sum which is 1.5 times more than what the Congress has promised for the excluded ones?

NYAY, if at all it comes into being, will have a fair share of implementation challenges. But it certainly is different from what this government or all previous governments have done for the targeted beneficiaries.