Nyuntam Aay Yojana

The Nyuntam Aay Yojana (; abbr. Nyay; a Hindi word meaning "justice") was a proposed social welfare program by the Indian National Congress in its 2019 general election manifesto. It promised that the party, if voted to power in the 2019 Indian general election, would enact a law under which it would distribute cash to the bottom 20 percent of India's families in terms of wealth, as a minimum guarantee programme. These households would each receive up to a year, a program the Congress claimed would benefit 250 million people in India.
In May 2020, a reworked version of the "Nyuntam Aay Yojana", named as the "Rajiv Gandhi Kisan Nyay Yojana" (RGKNY; ) in honour of former Indian Prime Minister Rajiv Gandhi, was announced. Under the scheme, up to Rs 10,000 per acre a year will be transferred into the bank accounts of farmers; the first instalment totalling Rs 1,500 crore was transferred by Chief Minister of Chhattisgarh Bhupesh Baghel to nearly 2 million farmers during the launch.
Background.
The Nyuntam Aay Yojana was proposed as part of the Indian National Congress campaign for the 2019 Indian general election, which primarily focused on agrarian distress while the Bharatiya Janata Party campaign for the 2019 Indian general election focused on infrastructural development and anti-immigration policies. The program was announced on 3 March 2019, at the manifesto’s release event at the All India Congress Committee’s headquarters at New Delhi.
The scheme was backed by Rahul Gandhi, then-president of the INC, who stated that "the "Nyantam Aay Yojana" is "an extremely powerful, extremely dynamic, extremely well-thought-through idea"", claiming that it is supported by "the best economists"". According to Bhalchandra Mungekar – a former member of India's Planning Commission and a member of Congress party's manifesto committee, the scheme would redistribute about a year. Mungekar stated that the Indian GDP in 2018 was $2.67 trillion, and the promised welfare program of the Congress party, if enacted and implemented, would collect and redistribute 1.9 percent of India's Gross Domestic Product to the poor. He states that the welfare program would be an affordable and just redistribution of national income. According to P Chidambaram – former Finance Minister of India, the proposed welfare program "will not affect other welfare program subsidies India already operates, will constitute 1.8 percent of India's GDP, and benefit 50 million families".
Criticism.
The Nyuntam Aay Yojana has been criticised by newspapers, politicians and economists on grounds of impracticality and the large expenses of maintaining such a scheme.
According to "The Economic Times", the "Nyantam Aay Yojana" is "yet another welfare program for India, but one that is "between promising the moon and simply loony". It will lead to fiscal ruin if existing welfare programs and food, fuel and other subsidies operate in parallel to the "Nyantam Aay Yojana". The program will cost between and a year, worsen the fiscal deficit of the Indian government, lead to "soaring inflation" and a "flight of capital" from India. To pay for the new welfare program and maintain India's current deficit level, the Congress party will need to raise GST rate, income taxes and wealth tax. Since the proposed welfare program would be a cash redistribution without any link to work or jobs, it will create no new jobs and worsen the recent productivity growth India has witnessed". The UK-based weekly "The Economist" stated that "India already has "over 950 centrally-funded schemes and subsidies", but the benefits of these welfare programs never reach the poor because it typically lands up in the government officials' pockets and those of the wealthier sections of society who are politically and bureaucratically well connected. Welfare programs that "prevent participants from doing any other work" are problematic. Another major flaw in "Nyuntam Aay Yojana", stated by "The Economist" is its assumption that the government officials will be able to identify the poor. Given the incentive of government income for being within the poorest 20%, people will likely compete to be poor or appear to be poor so as to avail the benefits". 
According to Raghuram Rajan – the former governor of Reserve Bank of India, the "Nyuntam Aay Yojana" was "good in theory but needs to take into account the fiscal realities of India". The program details and "how it will roll out" are unclear, states Rajan, and such a program if implemented properly at the grassroots level can revolutionise things, but "given where we [Indian government fiscal deficits] are, can we add another 7 lakh crore subsidy? The answer is no." Any Direct Bank Transfer scheme, such as the "Nyuntam Aay Yojana" should aim to alleviate poverty, but to be effective they should bring "more people into productive work force" and they "should not discourage work". James Crabtree – a professor of Public Policy Practice and the former Mumbai Bureau chief of "The Financial Times", states that the "Nyuntam Aay Yojana" idea is not supported by the "best economists" contrary to Rahul Gandhi's beliefs. The idea is a copy of Universal Basic Income idea that is currently fashionable among left-wing advocacy groups worldwide and is innovative compared to past proposals of the Congress party. However, it is unworkable, states Crabtree, in part because it is politically infeasible as it promises to discriminate between the poor by targeting the lowest 20% when similar impoverishment affects far more Indian families. Even if "Nyuntam Aay Yojana" can politically ignore the impoverished families above the bottom 20%, it is fiscally unaffordable because it would cost about 2% of India's gross domestic product, according to Jamestree. The "Nyuntam Aay Yojana" cannot end poverty in India, predicted Jamestree.
Mayawati – the president of Bahujan Samaj Party and a former Chief Minister of Uttar Pradesh, asserted that the "Nyantam Aay Yojana" was "just vote bank politics" of the Congress party.
The Ford Foundation International Professor of Economics at MIT Abhijit Banerjee criticised NYAY, asserting that "it will only be funded with high taxes and inflation".
Notes.
Nyuntam is a Hindi word meaning "minimum", and is not to be confused with "NYAY" meaning justice.