As I sip my tea on this lazy afternoon, I keep wondering what world problems I should try and solve. Poverty eradication has been my pet topic. I knew just the solution to eradicate the poverty even in my high school. Distribute money. However, to my dismay, I later realised that this solution might not work. I’m penning(technically typing) this blog post to discuss the problems I see, solutions I came up with. My hunch is, I’m going to read this post much later in life and probably bury myself in shame.
What’s the problem with the Robinhood idea? It seems awfully similar to the idea of universal basic income which is being implemented at some places(Sikkim in India comes to mind). Let’s imagine that Government of India decided to give every person below poverty line Rs 12000 per month. In our hypothetical year, a devastating famine ravaged across the country and the production of rice and wheat fell drastically. In such conditions, even though everyone has cash available, they can’t purchase food to eat. So, it seems to me that the problem isn’t with money(At least according to the narrow definition of money we’re going to use in this post)
One simple solution to this problem is to fix the price of essential commodities. In fact, we had a law to this effect till recently. The government could fix the price of essential goods to not exceed certain value. There are a lot of issues with this idea. This could lead to corruption and black markets. We’ve seen this in action during the peak of Covid Second Wave for essentials like Oxygen, Remedesivir injections. So, I believe this solution won’t work
The only solution to this problem, in my opinion, is to increase production. We need to collect the usage patterns of people and produce enough to meet their needs. In fact, we do that in our country for all essential grains. We produce surplus of what we need for most of the essential commodities, thanks to green revolution. We distribute these essentials through ration shops. Lately, we’re going back to UBI idea by transferring cash directly to accounts. There are some advantages with UBI(it cuts out the middle men, offers choice to people to consume food they like and so on) But, I believe it might have bad repercussions in exigency situations.
Does it mean we’ve solved the problem of poverty in India? I’d say no. Food isn’t the only essential commodity. We need to provide house(hence PMAY and other housing schemes), sanitation(Swacch Bharat), health(Aarogyasri, Ayushman Bharat etc), education(Scholarships, mid-day meal scheme, etc), financial inclusion(Access to credit & savings facilities(Jan Dhan yojana, postal saving scheme, OD facilities, micro finance institutions etc), insurance, investment opportunities), internet and so on. I think, Government has come up a huge number of schemes to eradicate poverty. However, it’s the awareness of these schemes and delivery that is found wanting. Let’s hope that will change in years to come and I think about a different topic over tea next time.
