The Central Government of India might announce a National Social Security Scheme that will offer Rs 1,500 allowance for poor and unemployed citizens of the country. The Prime Minister Narendra Modi-led government could announce a national social security scheme in the upcoming Budget 2017.
Currently, the government is discussing the pros and cons of such scheme that will have a huge impact on fiscal deficit. Under the scheme, the government will provide a financial assistance of Rs 1,500 per month to poor and unemployed.
The Modi Government is thinking of a new social security scheme for poor and unemployed for the solution of the issue of poverty. A discussion is running to finalize the basis of a national social security system and assess its impact on country’s economy. The government is currently discussing whether the scheme should be like a universal basic income or more focused support limited to the most vulnerable.
According to a report, if the government plans to give Rs 1,500 to 200 million poor of the country, it will cost them about Rs 3 lakh crore. This is being discussed by the government that whether there should be universal basic income or the scheme should target specific groups. The impact of such scheme on fiscal deficit is also being discussed. A government official said that there is a thinking… pros and cons of having such a scheme are being examined.
The government is trying to lower the fiscal deficit to 3 percent of GDP in FY18 but the cost of the universal basic income might be a big problem. If resource generation rises in the wake of demonetization and the rollout of the goods and services tax (GST), the government hopes to announce such social security scheme.
In October, the Chief economic adviser Arvind Subramanian had said that the people are dragged into poverty due to droughts, declining agriculture opportunities, disease and so on. So the safety net provided by the government should be quite wide and that’s why this UBI (universal basic income) has some merit.
‘Whether the allowance of Rs 1,500 should be given to everyone living under poverty line or only to unemployed people with no source of income’, this topic is being discussed by the government. Policymakers believe that Pradhan Mantri Jan Dhan Yojana accounts and the Socio-Economic and Caste Census of 2011 will play the key role in finalizing the targeted groups.
News Source: http://www.india.com/news/india/budget-2017-narendra-modi-govt-planning-rs-1500-allowance-for-poor-unemployed-1763987/