Former Prime Minister Manmohan Singh on Saturday said that Nyay scheme of the Congress will usher in an era of minimum income guarantee in India, end poverty and restart the economic engine which has "come to a stop" under the Narendra Modi government.

Share Market Live

NSE

In a statement, Singh said that implementation of Nyay, which envisages to provide Rs 72,000 per family every year to the poorest 20 percent of population, would not entail any new tax on the middle class.

He said that Congress is committed to fiscal discipline and Nyay would cost between 1.2 per cent and 1.5 per cent of the Gross Domestic Product (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. It has been conceptualised after much thought and consultations with experts," Singh said.

He said Nyay is a powerful idea with dual objectives.

"On March 25, 2019, Congress President Rahul Gandhi unveiled Nyay -- Nyuntam Aay Yojana -- to wipe out the last remnants of poverty and to restart stalled economic activity in our nation," he said.

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.

Singh said Nyay would ensure a basic level of dignity and respect for every Indian family.

"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.