That India is facing a huge economic slowdown is no longer a secret. GDP growth has slumped to 5 per cent in the first quarter of this fiscal. India has handled similar situations in the past. In 2008, the sub-prime crisis saw the world plunge into recession. But India consistently registered quarterly growth of over 6 per cent (above 8 per cent based on the new GDP formula) through the 12 months of September 2008-09 and came out relatively unscathed from the recession.

However, the impending 2019 economic crisis in India is slightly different because it is not the consequence of a purely external event like the US-China trade war, but is also due to the aggravating effect of measures like demonetisation and a hastily implemented GST.

The government’s measures to tackle the oncoming crisis has been muted, with a few sops to the automobile sector, tinkering with GST and merger of public sector banks. It is clear that the government is trying to revive the economy from the supply side with many sops. But the problem is that private investors — both domestic and foreign — will loosen their purse strings and invest only if they believe that their goods or services will be consumed by people. This cannot immediately happen given that the Indian economy is in a negative spiral with lay-offs all around. No amount of jawboning the RBI to loosen the monetary policy and declare exorbitant dividends to the government will boost private investors’ confidence.

Hence, this problem must urgently be tackled from the demand side. In such situations, Keynesian economics advocates a government-backed fiscal stimulus. But because this is often carried through capital investment, it is slow in reviving demand. Injecting immediate purchasing power into the hands of the poor through a universal basic income (UBI) programme like NYAY (Nyuntam Aay Yojana), as proposed by the Congress before the 2019 elections, is perhaps the best way to revive demand and consumption.

Will Prime Minister Modi implement a scheme that was proposed by the Congress party? A brief perusal of the past proves that he may not be opposed to borrowing certain good ideas. For instance, before the 2014 Lok Sabha elections, Modi was one of the staunchest critics of Aadhaar and Goods and Services Tax (GST). Yet, within the first 100 days of forming the government in 2014, he understood the wisdom behind the Aadhaar and expanded the scheme much beyond the scope previously envisioned by the UPA. In 2017, the Constitution was amended and the GST was passed, albeit hastily. The time has come now for the government to seriously look at NYAY — a scheme to cover five crore ‘poorest families’ (25 crore people) by guaranteeing them a minimum income of ₹6,000 per month. The idea itself is a modified version of the UBI idea mooted by the PM’s own Chief Economic Advisor in the 2016-17 Economic Survey.

An advantage of such an income support scheme is that it would target not just rural poor (like the MGNREGA) but also urban poor, leading to demand picking across the country. The financials too are prudent. The scheme will require ₹3.6-lakh crore per year. This amounts to 1.9 per cent of the GDP.

Another benefit is that with JAM (Jan Dhan – Aadhaar – Mobile) infrastructure in place, this UBI programme can be rolled out immediately. It will not only be politically popular but will also make economic sense and boost investors’ confidence.

V Narayanan is a spokesperson of the Tamil Nadu Congress. Kavya Narayanan is an entrepreneur