Some Reflections on Poverty

Dr. Rao VBJ Chelikani

Our very urgent primary task is eradication of chronic and massive poverty, which is the legacy of our old India. We have inherited systemic poverty i.e. we have resigned ourselves to poverty and from tolerating deprivation we went to accepting poverty without fighting it. We explained it to ourselves as fatality. The fact that it also happened due to lack of social solidarity among the people is a matter of perplexity. We soared very high in spiritual elation while our feet were in sinking marshy mud of humiliating poverty.

            To-day’s problem is deprivation due to poverty of income among those who are not active economic operators; and not about inequalities among those who have more or less of wealth or income. The first and foremost objective of the contemporary world is to ensure that every human being accedes to the minimum resources for his or her physical and mental needs, as identified by the standards of the local society. Poverty is not born out of inequalities. At least in the modern world, they are independent phenomenon. Inequalities are a philosophic and dialectical question among oligarchies.

            It is a matter of social ethics, justice and of morality that no human being should be left in absolute poverty, which causes suffering and deprivation of opportunities, to earn and to grow.  In order to avoid facing such a moral challenge, the religious values preached alternatives like poor feeding, charities, etc. during festival days, which served as an alibi for the few rich.  The 19^thcentury socialists deserve the credit for having questioned the systemic and structural causes and the 20^th century socialists for having experimented, on a massive scale, unsuccessfully, to totally eliminate poverty.  No doubt, there were other experiments in the past in isolated islands or in the literary imagination. Many welfare states in the developing countries also have tried in utter inefficiency. All those efforts have sinned in treating the poor as a victims or objects of exploitation warranting pity and compassion, rather than as concerned actors with handicaps.

            It is to be recognised that, even to-day, in socially advanced West European countries like France, Germany and the United Kingdom, there are always 5 to 15 percent of the relatively poor, in spite of many historical advantages enjoyed by those countries. The USA is another glaring example. Only the Scandinavian countries can boast of having the least number of them.  Christine Lagarde, the managing director of International Monetary Fund, said in 2014 that in India, the net worth of the billionaire community increased 12-fold in 15 years, and it would be enough to eliminate absolute poverty in this country twice over. In spite of this logic, this is a problem that she could not solve at home as the minister for finance in France, a country which launched the universal message of liberty, equality and fraternity. Absolute poverty still persists in her country in a small percentage, in spite of having several ‘socialist governments’.

1. It is frustrating to hear some people lamenting that in our country the poor are getting poorer and the rich, richer. This is not entirely true, as those who imagine this are ignorant of to-day’s economic realities. In reality, the absolute number of poor people as well as the percentage of the poor among the total population is coming down radically, if not very rapidly, as many of them are able to earn enough to become a part of an expanding middle class in the country. Between 2004 and 2010, 15% of India’s population or 40% of the poor moved Above the Poverty Line (APL). In the same period, a sizeable proportion of the poor and the vulnerable (over 9% of the population or about 11% of the poor and the vulnerable) have moved into the middle class. However, over 9% of the total population, of about 14% of the non-poor group slipped back into poverty, revealing the persistent risks faced by the vulnerable and even the middleclass. We, still, do not have a good social security system to prevent this relapsing into poverty from happening.


2. Approaches:But, today, in the 21^stcentury, it is possible to prove that we can eliminate absolute poverty without a shadow of doubt, without any sacrifice or charity by appropriate economic reforms. We should sub-divide poverty into absolute poverty and relative poverty. With the implementation of the Million Development Goals (MDG), absolute poverty could be totally eliminated by 2030 from all the countries, where, of course, there is no civil war. Poverty creates in a human being a psychological traumatism due to fear, insecurity and suffering, the degree of which varies from place to place, society to society and epoch to epoch.  Poverty can never be eradicated by re-distribution of assets of others who acquired them legitimately as per the rules of the financial game of their epoch; or by donations or by force.

i). There is no fear of poverty in societies where there are mechanisms of security like trusted police and compulsory insurances. A system of social security should have a supplementary arrangement of a net to recover those who fall out of the contributory system.  Of course, feelings of relative poverty would persist and the fear of economic inequalities stems, essentially, from this strong feeling of relative poverty.

1. ii) Fortunately, as never before, in view of the fast changing economic values and mechanisms, now, it is quite possible to eliminate chronic poverty. But, it cannot, efficiently and in a non-relapsing manner, be accomplished by any political party nor by a government composed of such parties, whatever might be their ideologies. The parties talk of the poor as an abstract entity to remain in perpetuity as their constituency, proclaiming themselves as the guardians of their interests. The politicians are not promoting to establish economic democracy which consists of economic empowerment of the citizen capable of making systemic adjustments to promote and maintain shared economic growth. This will happen only when all the economic actors and their professional mechanisms, including that of the producers, distributors and of the consumers work together as communities of social solidarity and custodians of common welfare.

iii). Rural Poverty: Hitherto there was a very simplistic approach to the alleviation of poverty. It is considered that agricultural growth alone would make it possible to reduce poverty in the rural areas. But the solution offered was more complex than the actual problem faced, as the agriculture is beset with so many other historical and contextual problems and involves so many people as voters. Hence rural poverty should be tackled directly as a problem of capacity to earn income, for which there are many modern solutions, such as direct cash delivery.

iv).Many Indians who are ingenious in creating wealth very fast are contributing, substantially, to the coffers of the state and the politicians are very generous in doling out the same as freebies and ex-gratia grants for their electorally-targeted groups. Since economy is a matter of management of resources, more than anything else, now, poverty and the risk of relapsing into poverty can be, once for all, eliminated simply by a well-managed social security system whose initial deficits have to be funded by the state.

v). In the emerging new economic culture, for total elimination of chronic and precarious poverty all the economic actors, not as citizens, have to make efforts. But, not the government directly. Inclusive growth, at the outset, means involving the poor in the economic activity and into the growth trajectory. Usually, contrary to the general impression, to-day’s individuals in the society are not directly responsible for others’ poverty but the society, collectively, is responsible for its elimination.

 

vi). One way to make those who are in absolute poverty to participate in the economy is to make direct cash transfer of some minimum funds to their ‘jan dhan’ accounts. This expenditure would be much less than what is being spent on multiple welfare schemes in an indiscriminate manner. To-day, not only in India, but everywhere in the world, we can assure a minimum of resources for a dignified living for every person born on this earth, through concerted action in solidarity.