Ex-PM Manmohan Singh backs NYAY, says no need for new taxes to finance the scheme

NEW DELHI: Former Prime Minister Manmohan Singh on Saturday broke his silence on Congress' poll promise of NYAY (Nyuntam Aay Yojana), stressing that no new taxes will be required to implement this scheme successfully in the ground.

The Congress has promised in its manifesto that under NYAY the party will provide an income support of Rs 72,000 annually to around 5 crore families, if it forms the government after winning the 2019 Lok Sabha poll.

"Congress is committed to fiscal discipline. NYAY scheme will cost between 1.2 - 1.5 per cent of GDP at its peak. Our nearly $3 trillion economy has the fiscal capacity to absorb this expenditure. There will be no need for any new taxes on the middle class to finance NYAY. The economic stimulus that NYAY will provide will further help in fiscal discipline," Singh said in a statement.

Singh, who is a noted economist, added that NYAY will play an important role in restarting the Indian economy which has come to a grinding halt under Prime Minister Narendra Modi's leadership.

"NYAY will also help restart our economic engine that has come to a stop today. Money in the hands of the needy will stimulate demand in the economy which can then lead to increased economic activity and job creation, referred to as the Keynesian effect by economists. At a time when private investment and industrial production are low, NYAY can help bring our economy back to life and create new factories and jobs," he said.

Talking about NYAY, the former premier said that around 70% Indians were living below poverty line when India got independence in 1947 but the policies of the Congress government over the last seven decades had helped in bringing down this number to only 20%. 

"Nearly 70 per cent of Indians were poor when India attained Independence from the British in 1947. With sound policies adopted by successive governments over the last seven decades, poverty levels have been brought down from 70 to 20 per cent now. It is time now to renew our pledge to wipe out the last remains of poverty."

Singh expressed confidence that NYAY provide a basic level of dignity and respect to every family in the country. He added that the scheme will provide an opportunity to the poor to live a better life.