Former Reserve Bank of India governor Raghuram Rajan on Thursday said that he advised Congress on the minimum income guarantee scheme, which was announced by the party president Rahul Gandhi on Monday.
Under the Nyoontama Aay Yojana or NYAY scheme, the party has promised to give Rs 72,000 annually to each poor family, earning less than Rs 12,000 per month.
"I have offered my views to Congress on the 'NYAY' scheme," Rajan told CNBC-TV18's Shereen Bhan.
He further said that both, the BJP and the Congress have been firm in saying that targeted income transfers are the way forward.
“I think there is a reasonable agreement that empowering people with cash transfers can be a very positive step and to the extent that you can do that within the budgetary space and by eliminating distortionary schemes, I think it is well worth thinking about and the key is to make it work,” Rajan said.
Talking about job creation, he said, “You have to create the jobs that people need and at the same time you have to create capacity."
On the infrastructure front, he said, “If you look at how China grew, if you look at how many of the countries in East Asia grew, it was through a tremendous expansion of infrastructure including affordable housing, strong roads, ports, airports. That created a logistic structure for manufacturing to pick-up, for services to pick-up and that’s something we need to think about."