Income support scheme can be realised by cutting other doles: Reddy

Congress President Rahul Gandhi's minimum income support scheme for the poor can be implemented by curtailing other doles and allowing fiscal deficit to widen, former RBI Governor Y V Reddy said.

However, it would be difficult for state governments to implement a similar scheme as they largely depend on the Centre for finance and borrowing limit, he told PTI in an interview.

"I talk only in terms of central-state fiscal relations. The state governments have budget constraints that means state governments can't spend more money because borrowing requires permission of the Government of India. So, there is a limit (for state borrowing). If they implement some schemes like this (minimum income support scheme) that has to be within their own budget limit," he said.

However, he said, the Centre has some liberty to increase fiscal deficit and there is no such hard fiscal constraints.

"So, such programmes are implemented better if the Centre takes over. If the Centre is able to accommodate ..