(Bloomberg) -- India’s main opposition Congress party has promised income support for each poor family as part of its electoral giveaways aimed at wresting power from Prime Minister Narendra Modi’s ruling coalition.
Describing it as the world’s largest minimum income plan, Congress President Rahul Gandhi said 20 percent of poor families across the country would receive 72,000 rupees ($1,046) annually through their bank accounts if the party comes to power. It is to ensure that basic income of every poor family does not fall below $174 per month.
“It is an extremely powerful, dynamic and well-thought through idea,” Gandhi said at a press conference in New Delhi on Monday, adding 50 million families, or 250 million people, will benefit from the plan. “The final assault on poverty has begun. We will wipe out poverty from the country.”
The federal government and states will together implement the program in a phased manner after conducting a pilot project and taking the views of experts into account, said Praveen Chakravarty, head of the Congress party’s data analytics department. It will be cost 3.6 trillion rupees every year at its peak, he said. “At no point it will be greater than 1.2 percent of GDP.”
Congress’s pledge comes as Modi’s Bharatiya Janata Party is banking on about 220 million Indians it says directly benefited from the government’s flagship programs -- providing toilets, electricity connections, houses, cooking gas, crop insurance and loans for small businesses.
Finance Minister Arun Jaitley said at a press conference in New Delhi that Congress had always provided slogans for the poor but never any resources.
The Congress, which won just 44 seats in 2014’s national vote versus Modi’s 282, is looking to leverage recent state election victories that came on the back of widening disenchantment over Modi’s policies on jobs and agriculture.
“The catch here is, how would they find out who makes how much given the nature of India’s informal economy?” said Abhijit Sen, a Delhi-based economist and former member of India’s Planning Commission. “Unless you can measure that, it sounds like a very preliminary, undergraduate exercise.”
India’s general elections will take place in seven phases between April 11 and May 19, with results to be announced on May 23.
“It’s a fiscally prudent scheme,” said Gandhi, adding the party had consulted renowned economists and experts before finalizing the program.
(Adds cost of the program in fourth paragraph.)
--With assistance from Abhijit Roy Chowdhury and Nupur Acharya.
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