Can India really afford such an Employment Guarantee Programme?
Various estimates of the cost of an Employment Guarantee Programme have been proposed, ranging between Rs 20,000 crores and Rs 45,000 crores per year. In the note circulated at the National Advisory Council, where the Programme is gradually extended to the whole of India over a period of four years, starting from the poorest districts, the cost rises from 0.5% of GDP in the initial year to 1% of GDP in the fourth year. Is this is an exorbitant price to pay to protect the bulk of the rural population from hunger, insecurity and unemployment? Surely not. This is not to deny that in the short term, bold initiatives would be required to finance an Employment Guarantee Act. One way forward is simply to tax the rich. They are the main beneficiaries of India’s rapid economic growth – let them share with the less privileged. As the Finance Ministry’s own recent studies and reports show, there are vast possibilities for broadening the tax net in India, reducing tax evasion, and raising the tax/
