In the run-up to elections, Congress president Rahul Gandhi yesterday announced a minimum income scheme for poor if his party comes to power. However, the scheme is not fiscally tenable in the current scenario, said former RBI Governor Raghuram Rajan, adding Nyuntam Aay Yojana (NYAY) success mainly depends on the fiscal space available with the next government.
“At this point you ask me given way where we are can we add another Rs 7 lakh crore, the answer is no”, he told Indian Today in an interview. The fiscal space is currently tight, he added. “This is really what any sensible government post election will have to think out”, he also said.
It is the details that matter in such schemes, said the professor at Booth School. How well the scheme gets targeted towards its beneficiary is also important, he noted. More than anything else, the country needs strong growth as it’s the best way possible for economic inclusion, he said. India currently needs next generation reforms, he noted.
Meanwhile, in an interaction with CNBC TV18, the globally renowned economist highlighted the three top priorities if he were the finance minister of the country. Raghuram Rajan’s focus areas are: solving issues of land acquisition, focusing on bank cleanup and coming up with policies to revive agriculture.
“Certainly I would focus on short-term actions that could put a lot of projects back on track that are still stuck, clean up the banks as quickly as possible and set them back on credit growth, some of which is happening and try and find two or three key reforms which could unleash growth,” Raghuram Rajan said.
via Rahul Gandhi’s NYAY: Raghuram Rajan tells why it’s not easy to implement minimum income scheme for poor – The Financial Express