Minimum Income Guarantee (MIG) is basic income which a government guarantees to the poor so that they can be brought to a certain pre-decided financial threshold.

Suppose the government sets a limit that each family must earn at least Rs 12,000 per month and currently their income is say Rs 5,000 a month, the government will pay them Rs 7,000 a month to bring it up to Rs 12,000. If they earn nothing, the government pays all of Rs 12,000.

This grand plan ever done in India?

You can see details regarding a pilot project done in Madhya Pradesh Here. I shall try to explain the details briefly.

In all, 6,000 people were paid Rs 200 for 12 months in about 12 villages and their saving and spending pattern was analysed. The experts, after examining the results, opined that the scheme shall work only if all other subsidies are removed and just these payments are kept.

A quick glance at what such payments lead to:

1.      Removal of subsidies

2.      It is not an incentive to work

3.      Income can be a tool for leakage

4.      Makes the rest of society feel left out

5.      It is a huge cost on state finances if kept in addition to subsidies

6.      Inflation will hit the economy and the increased income will be wiped off in buying food

7.      It is too costly

It would be disastrous to roll out such a plan.

What Rahul Gandhi has promised

Rahul Gandhi wants to ensure MIG for 20% of the nation’s poor families with Rs 72,000 per annum each. Let us look at some of the numbers.

Our population is about 130 crores and on an average as per census we have about 4.8 members in a family. So, 20% of India’s poorest households translates to 5 crore households approximately. Rs 72,000 per year to each of these households means a total bill of Rs 3.6 lakh crores. This is assuming all these families earn nil income. Who is going to fund this?

We have Rahul Gandhi promising that he will reduce GST and corporate taxes. Earlier, UPA government had extended subsidies. He wants to spend 6% of GDP on education and healthcare each.

This new illogical promise of MIG will cost us 2% of the GDP and a whooping 10% of the entire budget for the year. Well, who is going to keep a track of the monthly fluctuating incomes? I don’t think Rahul Gandhi would volunteer for that.

All this just because he wants to win an election. All this because he and his family is not used to be away from power. All this because Rahul Gandhi has no concern for the future.

What if the country’s deficit goes up? Nobody is going to ask him to foot the bill. It’s the hardworking taxpayers who shall foot the bill because Rahul Gandhi has to be the Prime Minister.

What’s done for poorest of the poor

The Narendra Modi government has always worked with the intent to reach the last mile. What the poor of this country need are not doles and vote purchase fraudulent schemes. They need enablers like PM Kisan Samman Nidhi Yojna, PM Suraksha Bima Yojna, PM Shram Yogi Mandhan Scheme, Ayushman Bharat, Ujjwala, Saubhagya, education subsidy and Skill India.

As Arun Jaitley tweeted, the Modi government is already giving much more than what Rahul has promised.

If you add the value of all this per family, its way beyond Rs 72,000 per annum. It would amount to a fraud on the poorest of the poor if these are taken away from them and cash is given. If these are kept and both are given, it would lead to a disaster for the economy.

One can’t give a fish for a day and expect the problem to vanish. What Narendra Modi government is doing is its enabling people to learn how to fish. These are long-term solutions. One hopes better sense prevails and people don’t fall for such fake promises. We are much better than this.