prasad1
Active member
All manifestos in this election contain promises to make India a more equal place by diverting funds to those who suffer most from the current inequality. While the Congress is promising Rs 72,000 each year to the 20% of the population who are poor, the Bharatiya Janata Party (BJP) is promising Rs 6,000 a year to small and marginal farm households (that is, farmers who have land holdings of up to 2 hectares). In Odisha, where elections to the assembly are also taking place, the BJP is trying to rival Naveen Patnaik’s existing provision of rice to the poor at Rs 1 per kg with a commitment to provide 1.5 kg rice with dal and salt free. In West Bengal, the Trinamool Congress has pointed out that it already provides grain at Rs 2 per kg.
It would be harsh to deny the benefits the poor enjoy from these schemes but their effectiveness is limited. A dole, which is what free or heavily subsidised food is, doesn’t help the poor to earn a decent living, nor does it provide them with dignity. Being on the dole is not dignified.
The series of loan waivers for farmers demonstrate that they only solve the problem for the moment. Farmers still can’t find markets to sell their produce at prices which enable them to balance their books. While writing a chapter on farmer’s suicides in a book 17 years ago, I visited the University of Agricultural Sciences, Dharwad, where a plant physiologist said: “Farmers come to us and say, ‘We did everything you told us to produce crops, now tell us where to sell them’. This bitter lesson has only just been learnt.” But it hasn’t. If it had been then, distress in the countryside wouldn’t be an issue this election. The vice-chancellor of the university blamed governments for farmers not getting their rewards. “Governments are on the side of the consumers entirely. All they want is cheap food,” he said.
I would say relying exclusively on short-term solutions such as debt relief is another cause. But I would like to suggest there is a more fundamental reason for the inequality in India, of which the need to provide doles and debt relief is only one sign. This reason is that India is misled by what is known as neoclassical economics, which relies on the market to distribute a nation’s resources. But markets take no account of equity. When I was discussing neoclassical economics with Ramgopal Agarwala, who was once the head of the economics unit of the World Bank in China, he said to me: “A self-equilibrating market is nonsense”.
https://www.hindustantimes.com/colu...l-economics/story-k5xVvEzxZ63UJtLxGp1wiN.html
It would be harsh to deny the benefits the poor enjoy from these schemes but their effectiveness is limited. A dole, which is what free or heavily subsidised food is, doesn’t help the poor to earn a decent living, nor does it provide them with dignity. Being on the dole is not dignified.
The series of loan waivers for farmers demonstrate that they only solve the problem for the moment. Farmers still can’t find markets to sell their produce at prices which enable them to balance their books. While writing a chapter on farmer’s suicides in a book 17 years ago, I visited the University of Agricultural Sciences, Dharwad, where a plant physiologist said: “Farmers come to us and say, ‘We did everything you told us to produce crops, now tell us where to sell them’. This bitter lesson has only just been learnt.” But it hasn’t. If it had been then, distress in the countryside wouldn’t be an issue this election. The vice-chancellor of the university blamed governments for farmers not getting their rewards. “Governments are on the side of the consumers entirely. All they want is cheap food,” he said.
I would say relying exclusively on short-term solutions such as debt relief is another cause. But I would like to suggest there is a more fundamental reason for the inequality in India, of which the need to provide doles and debt relief is only one sign. This reason is that India is misled by what is known as neoclassical economics, which relies on the market to distribute a nation’s resources. But markets take no account of equity. When I was discussing neoclassical economics with Ramgopal Agarwala, who was once the head of the economics unit of the World Bank in China, he said to me: “A self-equilibrating market is nonsense”.
https://www.hindustantimes.com/colu...l-economics/story-k5xVvEzxZ63UJtLxGp1wiN.html
