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| John Maynard Keynes |
“Endorsing” NYAY – Nyuntam Aay Yojana – announced by Congress president Rahul Gandhi, former Prime Minister Manmohan Singh has called it “a powerful idea with dual objectives – to wipe out the last remnants of poverty and to restart stalled economic activity in our nation.” Under NYAY, the poorest 20% of Indian families will be given an annual income support of a uniform amount of ₹72000 for each family.
Singh in a statement said, “By providing direct income support, NYAY will empower our poor with economic freedom and choice” and it will “usher in an era of a minimum income guarantee and help create a new social contract for a new welfare state.” He added, “NYAY will also help restart our economic engine that has come to a stop today.”
According to Singh, who is known as a keen supporter of free market economics, “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.” He added, “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.”
Criticising those who say it will affect fiscal discipline, Singh said, “NYAY scheme will cost between 1.2% - 1.5% of GDP at its peak. Our nearly $3 trillion economy has the fiscal capacity to absorb this expenditure.” He added, “There will be no need for any new taxes on the middle class to finance NYAY.”
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