Dear Indian voter, this is how dangerous Rahul Gandhi's NYAY gimmick is

In my earlier article, I had critiqued the Nyuntam Aay Yojana -- the "narrative setting, election winning" strategy devised by Rahul Gandhi and his group of economists. However, new information has trickled in since. The Congress party has given a lot of statements and clarifications. This has made the scheme scarier than what I had thought. 

The idea itself is absurd. This sole purpose of this piece is to stop as many citizens as possible from falling for such blatant election gimmick. First, is the Congress capable of delivering on its promise? Second, let us assess the scheme simply on its merits.

Can Congress deliver anything for the poor?

Congress was in power for 54 years and 7 days, with ten governments starting from Jawaharlal Nehru to Manmohan Singh. During all these decades the country could not: 

1. Electrify every village

2. Electrify every house

3. Provide every household with LPG cylinders

4. Connect every village with roads

5. Provide every house with toilets

6. Provide 24x7 electricity

7. Provide universal healthcare

8. Provide financial access to all

9. Provide housing to the poor

10. Eradicate poverty

The list can go on. Do I mean Congress governments did not electrify a single village or household? No. Obviously not. But the pace and cost at which they did was always too late and too high. 

Let us look at one such. In August, 1969, then Prime Minister Indira Gandhi addressed the citizens of India on radio and informed them about bank nationalisation. She said the idea was to remove control by a few people and to provide adequate credit for agriculture, small industry  and exports. 

Also read: Rahul Gandhi's NYAY will make foes of his friends

So, she nationalised banks to allow easy financial access to the masses. But India had to wait for a Narendra Modi to fulfill this dream. How? 

Modi government opened 35.16 crore bank accounts under Jan Dhan Yojana out of which 20.84 crore are in rural, 14.33 crores are in urban areas. In fact, 18.69 crore are female beneficiaries. These accounts hold Rs 95382.14 crores as deposits. So, what took so long?

Let us talk about credit. It was only under the current PM that we are seeing bank credit schemes like Mudra Yojana, which has a stunning 17 crore people who have taken loans. Mind you this is a huge number. Contrary to the objectives of bank nationalisation, the successor UPA government delivered 'phone-banking services' to cronies and left nationalised banks in the lurch. It took Modi to bring the Insolvency and Bankruptcy Code (IBC) to clean the non-performing assets (NPA) issue.

Now, let us delve into Congress's fight against poverty. First used by Nehru as a poll plank, Congress has consistently given promises and slogans to the people of the country.  

In 1957 — Jawaharlal Nehru: We must take a leap, end poverty and backwardness

In 1971 — Indira Gandhi: Garibi Hatao

4th Five Year Plan: Central theme was fight poverty and inequalities

5th Five Year Plan: "The objectives in view are removal of poverty and achievement of self-reliance"

6th Five Year Plan — Indira: "In this five-year period we expect to see progressive reduction in the incidence of poverty"

Then came the Rajiv Gandhi government and the UPA regime led by UPA chairperson Sonia Gandhi. Today we have Rahul Gandhi who is literally saying the same thing. 
According to the Tendulkar Committee estimate, we still have approximately 21% of our population below the poverty line. This was the situation before Modi when assumed office:

50 crore Indians without healthcare

7 crore houses with no LPG

1.53 crore families with no houses

2,62,84,350 houses with no electricity

5,56,361 villages with open defecation

14,64,00,000 people with no insurance

9,79,89,606 places which needed toilets

35,00,00,000 people who needed a bank account

25423000 pensioners who needed social security

3,38,00,000 who needed vaccination

17,000 villages that had no electricity

All of the above have been solved in the past five years. Result? 44 Indians are being pulled out of poverty every minute. We don't have the highest number of poor in the world anymore.

So, I am constrained to ask the Congress government: Given the track record of your party, why should anyone trust you?

Also read: 5 promises in Congress manifesto why anti-nationals will wish Rahul Gandhi becomes PM

I end this para with this image tweeted by the Bharatiya Janta Party (BJP) and I find it absolutely fair on their part to do so.

Is NYAY a suitable solution to address poverty?

So, what exactly is the NYAY plan? It sounds pretty clear to begin with: If voted to power, Congress government will pay Rs 6,000 per month or Rs 72,000 per annum to 20% poorest of the country.

When you start digging a bit, important questions arise.

1. How will INC identify the 20% beneficiaries who have no income data?

2. How will INC ensure that people don't cheat the system by faking wages in cash and availing NYAY?

3. Paying cash to remove poverty is like giving fish to feed hunger. What about tomorrow? 

4. How will you absorb the shock to the economy?

5. Why will people have incentive to work?

6. Why should the middle class who are honest tax payers bear the brunt?

7. What about inflation?

8. How will you fund the deficit because 3.6lac crores is not a small amount

9. Can anyone from the Congress answer these? How will one solve a problem like the one below?

Scenario A

Mr X works in a shop and earns 12,000 per month which the shop owner transfers via bank account to Mr X's Jan Dhan account. Total income of Mr X is 12,000 per month.

NYAY is introduced and we have Scenario B

Mr X tells his employer to pay 6,000 of his salary via bank account and Rs 6,000 via cash. This way suddenly Mr X becomes eligible for NYAY. Mr X therefore is eligible to receive Rs 6,000 per month from the government. He can then work out a method with the shop owner that he will give (example) Rs 3,000 of NYAY funds to him for this arrangement. So Mr X's total income is: 

1. Rs 6,000 from shop owner in bank

2. Rs 6,000 - Rs 3,000 (bribe to shop owner for scheming) = Rs 3,000 from NYAY

3. Rs 6,000 in cash from shop owner so total Rs 15,000 and shopowner gets to make Rs 3,000 by just changing one thing: mode of salary payment. Loss to exchequer: Rs 6,000

How will a Congress government deal with such cases? There is no way one can trace this. Will it not keep poor people poor forever? Will it not add black money and leakages? Will it not destroy the social fabric of this country?

Now let us see how the Congress intends to fund this scheme.

The P Chidambaram plan

"The size of India's economy is $200 lakh crore and in nominal terms, this size will increase by 12% every year. Therefore, after 5 years, the GDP would have grown to about $400 lakh crore. The expenditure of the government and all the states put together is US $60 lakh crore. Revenues are growing at 18%. Therefore, the amount available to the central and state governments will double in 5 years."

First, thanks for accepting that the economy is doing fantastic under Narendra Modi government. Coming back, how will the INC exactly make the budgetary allocations though? NYAY is expected to cost Rs 3.6 lakh crore or around 1.7% of the forecast gross domestic product (GDP) for 2019-20. That's a huge cost. We are running a deficit government. We haven't met the targets set under the Fiscal Responsibility and Budget Management Act, 2003. An increased allocation of this size means doom for the CAD, Fiscal deficit and the inflation numbers. I would like to remind Mr Chidambaram the wise words of Manmohan Singh: "Money doesn't grow on trees."

The Sam Pitroda plan

"Taxes may go up but I do not think that's a major issue. Don't be selfish, have big heart," said the advisor to Rahul Gandhi, Sam Pitroda. To be fair, he is at least very clear about how the INC must go about it. 

But Rahul Gandhi, Randeep Surjewala and a plethora of INC leaders have "distanced themselves" and "disowned" the comments on NYAY made by Pitroda. Isn't this the easiest modus operandi INC has time and against used to avoid any criticism? 

However, it is clear that middle class will have to bear the brunt of higher taxes and now it is upto them to decide if they can afford minimum Rs 3.6 lakh crore per annum for time immemorial so that Rahul Gandhi can be the Prime Minister. 

Else, subsidies will have to be removed. There is no fiscal room to fit such an insane, impractical plan otherwise. It is up to the poor of this country to decide if they want to give up subsidies worth about average Rs 1 lakh that the government currently gives which includes the Direct Benefit Transfer spending which is currently at Rs 312,180 crore, and total spending by Modi government on schemes for the poor which is currently at Rs 5,34,000 crore.

The Rahul Gandhi plan

"The money will come from the people who have dominated the banking system and not given anything in return to crony capitalists. That's where the money will come from." Yes, these were the exact words Rahul Gandhi used. 

He fails to understand that when a bank gives a loan to anyone it comes from the deposits that common people have made into the banking system. When a person returns the loan the money belongs to the bank and not the government.

If a crony capitalist doesn't pay up then their assets are sold out and the money goes to the bank that gave the loan. Not the government.

There are no provisions under RBI Act or Banking regulation act which allow the government to take out money from Banks for such schemes.

No corporate loans are waived off. That's farm loans. Written off is not waiver.

One can't nationalise any asset of a big company because we have a document called the Constitution.

RaGa's idea is so wrong at multiple levels. It is shocking that the principal opposition party is indulging in such fraud with the electorate. It is clear from the above that there is no fixed plan for the implementation or the funding. The only plan, as revealed by Rahul Gandhi himself, is to "change the narrative".

Our nation works best when the Congress sits in opposition. We have set ourselves on the right path in the past five years and the pace of growth is sustainable. We should reject lethargy, cronyism, povertarian ideas, desperation for power of dynasts, and keep moving on the path of empowerment and development.