Not by breaking the bank rahul gandhi

Not by breaking the bank rahul gandhi

Globalised growth, not fiscal populism, will work.

‘If voted to power in 2019, the Congress is committed to a Minimum Income Guarantee for every poor person, to help eradicate poverty & hunger. This is our vision & our promise’ — so tweeted Rahul Gandhi, prefacing this with the statement that we cannot build a new India when millions of our brothers and sisters suffer the scourge of poverty. Bleeding-heart commitment of a neophyte on a new Discovery of India? Hard-headed politics of pre-empting a similar promise in the works at the BJP’s election headquarters? Fiscally profligate populism that, in combination with the promise to waive farm loans, jack up minimum support prices and cure rural distress through handouts, will set a high-inflation trajectory for India if Congress gets to head the next government? The answer, in politics, is rarely exclusively one or the other; more often, one blurs into the other.

Income support for the poor is not quite a new policy. This is exactly what the Congress-led UPA government had implemented through the employment guarantee scheme, in which employment, in the form of manual work, was meant as a self-selection tool to weed out the non-poor from the dole’s claimants. It has been carried forward by the present NDA government as well. If the new scheme supplants that old scheme in rural areas, and expands to urban areas, but subsumes old-age and other pensions, the additional outlays on such income support is unlikely to be all that high. What really will break the fisc’s back is any attempt to seriously use budgetary resources to end rural distress, whether through loan waivers or ratcheting up procurement prices. Policy that empowers the farmer to get globally benchmarked prices for his produce is what is called for, via radical overhaul of farm and agri-produce marketing and processing policy.

Fast, participatory growth is what will rid India of poverty. Budgetary outlays, politics and policy must all aim to produce broad-based, globalised growth and policies to empower Indians to embrace global opportunities, via better social and physical infrastructure.