NYAY will end poverty without new taxes: Manmohan Singh

New Delhi, Apr 20: Claiming that Nyuntam Aay Yojana (NYAY), proposed by the Congress party in its election manifesto, will restart the country's economic engine, former Prime Minister Manmohan Singh on Saturday expressed confidence that NYAY has the potential to catapult India into the club of 'poverty free' nations in the world.

"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.

"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," he said.

"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 added.

Singh said that Nyay has been received with tremendous enthusiasm by people and discussed widely across the nation.

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

"By providing direct income support, Nyay will empower our poor with economic freedom and choice. With Nyay, India will usher in an era of a minimum income guarantee and help create a new social contract for a new welfare state."

"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 added.

Singh referred to the economic reforms when he was the Finance Minister in 1991 and to the rural employment guarantee scheme brought by the UPA government led by him.

"Just as we brought in a new paradigm for India's development with the de-licensing regime in 1991 - a rights-based approach to governance including the Right to Work under MGNREGA, I am confident a Congress party-led government in 2019 will implement Nyay successfully and usher in a new model for social justice and prudent economics," he said.

"It is my sincere belief that Nyay has the potential to catapult India into the club of 'poverty-free' nations in the world and I hope to be able to live to see our nation achieve this historic milestone," Singh said.

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.