Today I came across an article "Why Montek must go back to school" on Yahoo Finance. The writer of the article compares Poverty line in India with that of US and UK and also praises the statistical techniques used by those countries to keep track of their poor. With the recent mood in nation against the ruling Congress coalition, the reactions visible on social networking sites and web are all expected. However most of these reactions are just for the sake of criticizing govt. which is in fashion today. How many of those criticizing the poverty line today know exactly the concept of poverty line. Neither am I pro govt. nor do I say that this poverty line is actually measures poverty. But, two things that I do accept is that this line is definitely an improvement over the earlier one. As I mentioned in earlier blog the main flaw is in the criterion we use to measure poverty. It is based on calorie intake that makes Poverty Line a mere "Starvation Line".
However before going all outrageous over the poverty line methodology we must remember 'Education and Health' the two added ingredients that are considered important for Human Development and good quality of life are absolutely free in India. Govt. delivers these services to the society irrespective of a person's income. The flaw is the rampant corruption that makes these services worthless. But, the question is that "Is this corruption a new phenomenon created by the UPA Govt." and "are all the doctors and teachers in the Public institutions being directed by the UPA govt. to not deliver services to the society". The answer to non of these questions is affirmative. However, I do accept that the govt. hasn't done its bit to eliminate corruption but, then even we haven't done our bit to eliminate it.
The second thing is this Poverty Line isn't going to be used for the delivery of Food grains under the long due National Food Security Bill. So, the poverty line doesn't lead to delivery of food, education and health. It is used for other purposes like implementation of social security programs and poverty eradication program. My Question is that " How many of Us protesting against this Poverty line are actually ready for a tax hike". Almost all of us will be ready to dethrone the govt. the moment it increases taxes or removes subsidy on LPG. So, if no. of poor increases by virtue of raising the poverty line who is going to pay for it. We are the ones who are also outrageous over rising deficits and inflation. Raising the poverty line will increase govt. deficit and fuel inflation and in turn nullify the impact of rise in the poverty line as the indexes we use to adjust poverty line for inflation are flawed. So, this is a long chain of reforms we need to go through before we talk of relative poverty and compare our poor with that of UK and US.
So for all those protesting for the first time against poverty line just think an answer to whether you are ready to pay for it or not as In India even the richest of the lot takes shelter of flaws of Section 80 G of Income tax to save taxation leave beside the black ways of saving it. So, it might not be very developmental to have such low poverty line but, it definitely is prudent for a nation which itself is poor. In economics every thing is related to demand and supply and the govt wants to keep level of poverty at a point till which it can deliver benefits However, there definitely are ways to improve the situation, one being that the rich forego the subsidies govt. provide them. Other ways are also there but, that requires political will and I don't deny that not only this UPA govt. but, every govt. lacks political will. Its only that this govt' has been exposed due to over lethargy. Reforms are the way out and we are undergoing the process. With corruption it will be a lengthy process but, we definitely will emerge developed.
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