We will create the fiscal space for implementing the scheme, P Chidamabaram said.
Amid concerns that the Congress' election promise of a minimum income guarantee scheme for the poor will hurt the middle class as taxes might be raised to finance the subsidy, senior party leader and former finance minister P Chidambaram on Tuesday said that the tax burden of the middle class will not go up.
"With more efficient tax administration... I give you my, our word that the tax burden of the middle class, the average tax payer will not increase," Mr Chidambaram told NDTV.
Under the Nyuntam Aay Yojana or NYAY scheme, announced by Congress president Rahul Gandhi on March 25, the party has proposed to transfer Rs 72,000 a year - or a standard amount of Rs 6,000 a month - to 20 per cent of India's poorest families if it is voted to power in the upcoming elections. Mr Gandhi described the proposal as a "final assault on poverty".
The Congress says the NYAY scheme will not be implemented "rashly" like demonetisation and GST initiatives by the BJP-led NDA government. The party has also rejected claims that the annual expenditure of Rs.3.6 lakh crore would aggravate India's fiscal deficit.
"We are pegging our scheme at about 1.3 per cent of GDP or 1.4 per cent of GDP when we roll it out for the bottom 10% and when fully rolled out, the GDP would have increased remember, fully rolled out, it will be about 1.5 per cent of GDP," Mr Chidambaram said.
Explaining how resources will be raised for the scheme - dismissed as a bluff by the BJP - the former finance minister said, "The government of India's resources does not rise at a pace at which resources of some individuals rise. Therefore, there are ways to raise resources. Number 2, there is a huge scope for rationalisation without touching any subsidy that was given to meet a specific socio-economic objective. Let me repeat that. A subsidy that has been given to meet a specific socio-economic objective will not be touched... We will create the fiscal space for implementing the scheme."