Why is India not able to take care of its poor like most other countries who are neither great democracies nor economic powers or the military power that we boast of? The new economic policy of liberalization, privatization and globalization has done wonders for the moneyed class but for the vast majority of poor, now intended to be covered under MNREGA, it has not delivered. MNREGA is not a ‘guarantee’ in the same sense as a person in service sector is guaranteed to get his salary at the end of the month or a company is guaranteed a pre-determined rate of return in a Public Private Partnership. Poor are left dying as a result of starvation and malnourishment, high mother and child mortality rates, committing suicides or anti-naxal operations. Is that how we’ve decided to eliminate our poor? Just last week a 12 years old girl has been killed in police firing in Kalingnagar, Orissa. Certainly, she cannot be a naxalite.
There needs to be a peace and equity audit of our budget and planning process. We need to examine to see whether the economic policies that we’re adopting are increasing the gap between the rich and the poor and causing more social unrest. Basic services such as food, education, health care, work and social security must be universally available for all. Also, further affirmative action is required for those who are socially excluded.
The basic minimum wages need to be revised. Very recently the Rural Development Ministry has revised the MNREGA wages considering the inflation and on the basis of consumer price index. While indexing wages with inflation recognises the fall in real wages it does not resolve the core issue. The minimum wages should be rationalized on the minimum need based norms proposed by 15th Indian Labour Conference way back in 1957 and further endorsed and enhanced by the Supreme Court of India. Creating a category if MNREGA workers in worrisome and institutionalises the discrimination. Ideally, the people who are involved in producing material items, like roti, kapda and makan, essential for the survival of all should get highest remuneration in the society. The people in service sector can work for daily wages. This may be considered a utopian dream. So, a more practical suggestion is to accept the demand of some people’s movements of Rs. 250 per day as the minimum wage rate for a day.
The Prime Minister appointed expert group headed by C. Rangarajan has rejected the National Advisory Council proposal of supplying subsidised foorgrains to 75% of the population citing lack of procurement capability. The number of poor is much larger than what the government has agreed to accept, i.e., recommendation of Tendulkar committee of 37.2 %, or even that of N.C. Saxena committee of 48 %. It is closer to the suggestion made by NAC. The present procurement is 50-55 million tonnes of foodgrains. In 2009-10 the foodgrains production was estimated to be 218.20 million tonnes. To fulfill the NAC requirement procurement of 65 million tonnes is necessary. If the government was to improve its procurement policy there certainly should be no problem in procuring enough to guarantee food security to all the country’s poor. Presently, because of harassment faced at government procurement centres the farmers prefer to sell their foodgrains to private parties even at a price lower than the minimum support price. The procurement itself in the last rabi season started late. Procurement must be improved by encouraging decentralized procurement, ensuring timely payments, procuring directly from the farmers, including millets in PDS and so on. Procurement for an expanded PDS will give a boost to production and can become an important instrument for revitalisation of agricultural economy. Food security cannot be provided without considering production aspects. In actuality production, procurement and distribution have to be considered together. Moreover, procurement and distribution should be done locally.
The PDS must not be replaced by direct cash transfers, as is being suggested by many, as the PDS plays multiple roles of providing food security at the household level, encouraging foodgrain production, ensuring availability in food deficit areas and so on. Further, it has been seen that there is better intra-household distribution when the transfer is in the form of food, whereas when cash comes into the household men have greater control over it. Instead of dismantling the PDS, reforms such as ensuring doorstep delivery of foodgrains to FPS shops, end-to-end computerisation, putting in place effective transparency and grievance redressal system must be carried out. Experiences of states such as Tamil Nadu and Chhattisgarh have shown that such measures can greatly reduce the leakages in the PDS.
It is a pity that agriculture sector records a slower growth rate than the industry and service sectors. It is not that the production in agriculture is any less. It is because of the prices set and wage rates, which are not determined by free market alone, that we get a skewed picture. Industry will not record a high growth rate without a number of concessions from the government. The tax waived by the central government on corporate income tax, personal income tax, excise and customs was Rs. 5,02,299 crores in 2009-10, which was 79.54 % of aggregate tax collection. Similarly, without the high salaries, which are not commensurate with the effort or the performance, the service sector will not exhibit high growth rate. We must give up trying to move people from agriculture to industry, the basic thinking underlying the new economic policy. We must strengthen what we are good at. The agricultural produce must get a respectable support price and people in primary sector decent remuneration. Agriculture must have a separate budget like the Railways.
The new economic policy has also failed to check corruption and inflation like the poverty. Big bills like those of Rs. 500 and Rs. 1000 must be withdrawn from the economy after giving a notice of 2-3 months. This will help enlarge the tax net and generate funds the government desperately needs for investment in the economy. The size of black money economy in India is three times that of white money economy. This measure will also check corruption to some extent. In any case, this move will not affect 90% of the population who rarely get to see the big bills.
The attempt by government to outsource work to NGOs in not desirable. NGOs run by people close to the politicians and bureaucrats often walk away with big funds and become an extension of the corrupt government machinery. Ideally, the NGOs must not be funded by government at all as they cannot be held accountable by the people. If they are NGOs in the true sense they should raise their resources from the society. Plenty of rich people as well as CSR funds with private corporations are available to support good initiatives.
By Sandeep Pandey
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