SBI economists propose 'Adopt-A-Family' scheme: Here's all you need to know about the voluntary scheme

Economists at State Bank of India (SBI) have proposed "Adopt-a-Family" voluntary scheme, where taxpayers are incentivised to support a BPL family amid the coronavirus pandemic.

SBI economists in a statement said: "Echoing the concept of Jan Bhagidari to public goods, we proposed a scheme called “ADOPT-A-FAMILY". Under this scheme, which is purely voluntary, a taxpayer (probably annual income of Rs 10 lakh or more) may be incentivized to adopts a BPL family for a year with a specified amount (say Rs 5,000 per month)."

The further added that in this way a BPL family which is badly hit due to COVID-19 will get support of Rs 60,000 without any fiscal burden on Government.

Under the voluntary scheme, taxpayers (possibly those with an annual income of Rs 10 lakh and above) can provide a family with financial assistance for a specified amount each month (Rs 5,000 for instance).

The SBI economists said that India has around 70 lakh taxpayers who have the above mentioned annual income, and even if 10 percent opt for the scheme it can benefit around 7 lakh families. "To boost the scheme, Government can ideally incentivise say Rs 50,000 tax deduction over and above 80C limits to the taxpayer and nudge agents to adopt a poor family," the economists said in the statement.

"Even if 10% enroll under this scheme, it will benefit around 7 lakh families (or 28 lakh family members). To boost the scheme, government can ideally incentivise at least 50,000 tax deduction over and above 80C limits to the taxpayer. This can be monitored by Bank accounts enabled through Aadhaar payments," SBI economists said.

Under this scheme, SBI economists noted that the cost to government is only the income tax, foregone of Rs 1050 crore. However, if government gives Rs 50,000 support to 7 lakh families, the fiscal cost would be Rs 3500 crore, that could result in a consumption boom of Rs, 11,666 crores, they added. The scheme is in line with Prime Minister Narendra Modi's Jan Bhagidari (people’s participation) vision.

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