When something sounds too good to be true, it probably is. Beware of populist promises, which might give an instant kick like what you would get when you eat sweet halwa (it is called sugar rush, which will leave you just as fast as it comes). Most of these are not kept and this can be easily traced from the track record of the party making it.

Rahul Gandhi – Rs.72,000 per year per family

Today is a historic day.. It is on this day that the Congress party launched its final assault on poverty. 5 Crore of the poorest families in India, will receive Rs. 72,000 Per Year#NyayForIndia is our dream & our pledge. The time for change has come. — Rahul Gandhi (@RahulGandhi) March 25, 2019

On March 25th, Rahul Gandhi promised that families earning below Rs.12,000 per month salary will get Rs.6,000 per month (Rs.72,000 per year). In his estimate, 5 crore families would benefit from the cost to the exchequer of Rs.5 crores X 72,000 (Rs.3.6 Lakh crores). This is more or less the income that the Government gets from all the personal income taxes paid! And when this is implemented, I will bet my last paisa that instead of 20 percent of India, 50 percent will claim this benefit. Much of the salaries paid for low paying jobs such as daily wages or small store collections are all cash-based and it would very easy to claim this credit. Many able-bodied people, who might otherwise seek employment, would end up staying at home (Mai baap ki sarkar syndrome) putting stress on daily wage based jobs and perhaps attract illegal migration from the poorer neighbors. If you don’t believe me, look at how many menial jobs in the North Indian cities are being handled by migrant labor from Bangladesh/ Rakhine.

What is wrong with this plan?

It would make the salaried class extremely upset. They would feel that all of their hard earned money is being handed over to the poorest of the poor (and then some). We must remember here that a farmer in India does not pay any taxes. And the ultra rich have Chartered Accountants who will figure out every possible tax break (including adding new exemptions in the tax code that only the ultra rich can avail) so they pay almost nothing. That this was done in consultation with economists is baffling. So when all is said and done, when the dust settles, it will be apparent that it was merely a political jumla.

Did farmers in MP, Karnataka get their loans waived?

How can a State Government waive the loans of farmers unless it (the state) disbursed the loans in the first place? In Karnataka, a Rs.44,000 crores farm waiver only helped 800 farmers[1]! The promise was that within 24 hours, all loans would be waived off. It is now more than 8 months and it is expected that about 43 lakh applications would be processed (of which 20 lakh have taken loans from co-operative banks or nationalized banks). Three months have passed since this Times of India article and one can only guess that there is no money to pay anyone. This is the correct conclusion because all State governments are struggling to pay wages, pensions, and other project-related expenses.

The experience in Madhya Pradesh, Rajasthan and Chattisgarh, where Congress rode to power on the farm loan waiver promise has been no different[2]. Farmers were shocked to see that they were going to get a loan waiver of Rs.13! Shivnarayan and Shivlal from a village in Agar Malwa, 190 km from Bhopal, could not believe their eyes when they saw Rs. 13 mentioned against their names.

The new Madhya Pradesh government led by Chief Minister Kamal Nath had announced to waive off loans up to Rs.2 lakh. The two farmers have taken over Rs.20,000.

These were poll promises made by Mr. Rahul Gandhi and he cannot wish them away. Voters are cautioned that if something sounds too good to be true, it probably is.

References:

[1] Rs.44,000 crore loan waiver has helped only 800 farmers so far: Karnataka, Dec 13, 2018. Times of India

[2] Farmers shocked to get Rs.13 Loan Waiver in Madhya Pradesh – Jan 24, 2019, NDTV.com