For the Greater Good

College-Indian Institute of Foreign Trade,Delhi

Team-All Starz

Team mate-Shreyash Jhunjhunwala (http://insideiim.com/rhonda-byrne-is-no-bih/)

Article Refuted: Why India Needs its Poor (http://insideiim.com/why-india-needs-its-poor/)

In order to develop any nation needs to put in place policies that work for the upliftment of its poor. Since these are the people who will fuel the demand and thus invigorate the economy. The reason India is showing great economic progress is not because its poor but because it is growing from a lower base and has much greater room for growth. True, India’s cheap labour is fueling the growth by developing critical infrastructure but what about China. Wage rates are doubling every five years yet it is growing by over 7.5% compared to 4.8% for India, which has over 4 times the number of poor. Going by the argument that “India’s poor should remain poor in order to fuel the growth”, India should be growing 4 times faster than China with superhighways and 1000 Foot highrises being built overnight.

Secondly development in any country is not meant to serve the elite. It follows the Utilitarian principal of greater good. According to JB Say, supply creates its own demand. Going by this principle and the principles of socialism enshrined in the Constitution, whatever the labour force is building is for its own good, say a 6 lane highway, MRTS or maybe a housing complex that would rehabilitate slum dwellers. As income levels rise, as more and more are lifted out of poverty, the newly created middle class which is already 300 million strong will spur the growth. This would additionally give rise to increased money supply, higher tax revenue for the government and a highly skilled workforce.

Thirdly India’s society is an agrarian one with 58% of population dependent directly or indirectly on agriculture. Moreover agriculture has already reached a saturation level unless it becomes highly mechanized. This would also require a skilled labour force and hence millions of poor out of poverty. History has taught us that as a country develops it shifts over from agrarian society to a manufacturing one and finally the one dominated by services. Though in India’s case we are seeing a shift from agriculture to services, skipping manufacturing altogether, but that owes its origins in poor manufacturing policies over the years.

Finally the NREGA, it is definitely not a scheme that provides incentive for not working. It is a scheme that seeks to boost rural household incomes and has been successful in doing so, since over 50 million households were covered until 2011-12, up from 21 million in 2005-06. It has played a pivotal role in developing crucial infrastructure like highways and overpasses. It has also brought an element of social justice by providing the poor a dignified job and women, an equal participation. Also, while the rickshaw pullers provide a cheap means of transport in the city, they can easily be replaced provided there is an efficient MRTS. Moreover manual labour serving others is not something most of the developed nations would see as dignified. Coming to inflation, it is does not occur because the poor in our country have started eating more but because growth and inflation go hand in hand. Without growth there can be no inflation and vice versa. Therefore going by the argument that it is because of the poor that inflation is rising refutes the very case for development because without the poor there cannot be any development and obviously, a rise in income levels will fuel consumption. There the statement is self contradictory.

Hence development is a broad phenomenon that should be caught like wind in the sails. It should not be limited to only a few.

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