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Congress can fund minimum income scheme by taxing super-rich, say economists Lucas Chancel & Abhijit Banerjee

Updated : March 26, 2019 09:55 PM IST

Two economists, Lucas Chancel and Abhijit Banerjee, who aided the Congress with its Minimum Income Guarantee programme on Tuesday suggested that Rahul Gandhi can tax the super-rich to fund the scheme if his party comes to the power in the centre.

Yesterday, Rahul Gandhi said 20 percent families in the ‘poorest of the poor’ category will be given Rs 72,000 each annually as a minimum income.

Making the announcement at a press conference in New Delhi, Gandhi said, “The time for change has come”. Five crore families and 25 crore people will directly benefit from the scheme, he claimed, terming it is a “final assault” to eradicate poverty in the country. “The final assault on poverty has begun. We will wipe out poverty from the country,” he said.

“I promise that there will be justice for the poor. The Congress guarantees that 20 percent families belonging to poorest of the poor category in India will be given Rs 72,000 each annually,” he said. The Congress chief termed it a “historic day”, saying the Congress had launched its final assault on poverty on the day.

To take this forward, CNBC-TV18's Latha Venkatesh is joined by Abhijit Banerjee, professor at Massachusetts Institute of Technology; Lucas Chancel, co-director at the World Inequality Lab and Himanshu, professor at Jawaharlal Nehru University.

Chancel said, "First I should clarify that I was really not directly involved in the preparation of this scheme. However, as independent researchers and as a group of international researchers, we have done scenarios and evaluations of different ways that could be used in order to implement this minimum income. I think this election is a good moment to ask the question of how to finance additional social expenditure. We need to implement more taxes and if you compare it from an international perspective, the amount of taxes collected by India is relatively low."

Banerjee said, "At some point, we have to bite the bullet and decide that every year the tax cut for the middle classes as the justification of the budget that gas to go. This is for every government. Basically, we need to move to from an under-taxed economy to a reasonably taxed economy. We are not overtaxed and we have pretty low taxes."
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