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P Chidambaram promises fiscal prudence even as Congress assures minimum income guarantee for poor families

Updated : January 29, 2019 06:26 AM IST

After Congress president Rahul Gandhi announced that his party would ensure Universal Basic Income (UBI) in the country, senior Congress leader P Chidambaram on Monday promised fiscal prudence and assured a minimum income guarantee scheme for the poor families.

Chidambaram said the Congress government if comes to power in 2019 will work out the math to make minimum income guarantee workable and the idea was not borrowed from the BJP as the saffron part has practically nothing to teach Congress.

In an interview to CNBC-TV18's Shereen Bhan, Chidambaram said, "Let’s assume that 20 percent of India are the very poor and we must find the way in which that 20 percent families are assured an annual income at a minimum level. At a level, where they will have enough food, clothes, roof over their head, can send their children to school and access healthcare, and that’s the absolute minimum in a civilised society."

"Our employment is in the unorganised sector. Bulk of them are in rural India and a very large number is in urban slums. Therefore, the target is the poorest families. The mode is to transfer money to those families so that the family will have a minimum income," he said.

Former finance minister said India will be adapting the idea of universal basic income to our situations and to our needs, “It will be through a transfer of money to families, the poorest families of India. The Minimum Wages Act will imply only to an employment in the organised sector. Developed countries do exactly what I am saying by periodically increasing the minimum wage. America does it, but that is because most employment there or almost 100 percent employment is in the organised sector.”

"Dr Arvind Subramanian for example has calculated a UBI to be 1.5 percent of GDP and others have made the calculation. I think the way we are approaching the problem, namely wiping out of poverty as the goal, it is eminently doable. We are a large economy and given the size of our GDP and annual expenditure, we can do it," he added.

Chief economic advisor (CEA) Arvind Subramanian in the Economic Survey 2016-17 had mooted the idea of UBI or a uniform stipend paid to every adult and child, poor or rich. UBI will guarantee all citizens enough income to cover their basic needs and would be easier to administer than the current anti-poverty schemes, which are plagued by waste, corruption and abuse.

Claiming that fiscal deficit will remain around the level of three percent, Chidambaram said the United Progressive Alliance (UPA) government has progressively brought it down every year and the Congress is committed to FRBM (Fiscal Responsibility and Budget Management Act).

Talking on method of implementation, Chidambaram said the party will answer this question when it forms the government and added that bulk of obligation will be carried by the central government, but will find ways to see how it can be shared with state governments.
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