Manmohan Singh said the proposed scheme will ensure a "basic level of dignity" for the poorest.

Former Prime Minister Manmohan Singh today endorsed the Congress' NYAY scheme, claiming that its promise of providing annual income support of Rs 72,000 to each of India's poorest families will not only restart the nation's growth engine but also stimulate demand in a manner leading to increased economic activity and job creation.

The statement released by Dr Singh also dismissed claims that the proposed scheme will strain the country's monetary reserves, saying that it will only cost anywhere between 1.2%-1.5% of the Gross Domestic Product -- an expenditure that can be easily absorbed by India's $3 trillion economy. He clarified that the scheme, which was conceptualised after extensive consultations with experts, will not lead to imposition of new taxes on the middle class.

Another eminent economist, former Reserve Bank of India Governor Raghuram Rajan, had earlier confirmed advising the Congress leadership on the proposed minimum income guarantee scheme unveiled by the opposition party ahead of the Lok Sabha elections. He said that the scheme was perfectly implementable as long as ground realities of the country are taken into consideration.

Dr Singh said that the scheme will 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 minimum income guarantee and help create a new social contract for a new welfare state," his statement read.

The proposed scheme has been criticised by the ruling BJP. Union Finance Minister Arun Jaitley had earlier dismissed it as a "bluff announcement", claiming that the money promised through the proposed scheme only comes up to Rs 3.6 lakh crore -- which is "less than 2/3rd of what is already being given" under the current administration. He also accused former Congress Prime Ministers Jawaharlal Nehru and Indira Gandhi of "redistributing poverty" in the years following India's Independence, preventing its growth.

Dr Singh, however, rejected the argument that the country saw minimal growth in its initial decades under Congress governance. "Nearly 70% of Indians were poor when India attained Independence from the British in 1947. With sound policies... adopted over the last seven decades, poverty levels have been brought down to 20%. It is now time to renew our pledge to wipe out the last remains of poverty," his statement read.

Congress president Rahul Gandhi claims that the NYAY scheme will revive an economy wrecked by the Narendra Modi government through initiatives such as the Goods and Services Tax and demonetisation.