Why only poor made to sacrifice

Dr Ashwani Mahajan
There are two schools of thoughts about development. One school of thoughts believes in a philosophy of development, whereby poor is kept in the centre of policy making. A model of development where poor gets opportunities to grow; a production system which generates enough employment; and a distribution system where there are least inequalities in the distribution of income and wealth. If due to some reasons, poor lag behind or lose their employment and livelihood; then we can think of adopting strategies to reduce inequalities in income, wealth and consumption; by way of government interventions, such as employment generation schemes like MNREGA, subsidising essential products and services including food grain, education, health, fuel, housing, etc. Amartya Sen has also been advocating these schemes. Sometimes policy makers, failing in improving the conditions of poor and deprived sections, make use of these schemes as populist measures to garner public support.
Another philosophy of development is influenced purely by capitalist thinking. Proponents of this school of thought argue that best way to help poor is to increase investment, which only can help increase output, employment and welfare of masses; and increase revenue, which can ultimately be used to finance infrastructure for the development of the economy. If government has resources it can be used to subsidise goods and services required by masses. For people, who believe in this model of development, the only measure of development is growth in real GDP. And if GDP grows by 8 to 10 percent, it is a matter of pride for them. They argue that if in the process, poor do not get their due share in growth, let them sacrifice today for better future. They argue that benefits of growth will automatically percolate to poor, what they call ‘percolation effect’. They argue that if one piece of bread is distributed among two people, each one will get only half; whereas if we produce two breads, each one will get one each. While arguing for growth in GDP, an American Indian economist Jagdish Bhagwati argues the same way.
Basic characteristics of the economic policy and budgetary policies of the governments of various regimes has been that the burden of taxation on corporate has been gradually declining by way of concessions in corporate income tax, excise duty, custom duty etc. On the other hand, tax burden on the common man has been on the rise. Budget documents every year, has a statement, namely ‘Statement of Revenue Forgone’, which gives details of such concessions to business and corporate. If we leave out the tax concessions to personal income tax payers, revenue foregone to the benefit of business (mostly corporate) was nearly Rs. 5.5 lakh crores, in the year 2014-15.
It is notable that due to tax concessions to the businesses, (mostly corporate) Government is not left with sufficient resources to be spent on the welfare of poor deprived and other weaker sections of the society who need the support of the Government the most. This is the reason for government’s inability to raise real allocation on social services such as education, health, drinking water, woman and child development, Scheduled Castes/Scheduled Tribes welfare etc. Therefore we can say that it is the poor who is sacrificing to boost growth, whereas businessmen and corporates are enjoying the fruits of growth.
However, those who support economic growth even at the cost of poor, argue that once growth takes place; its benefits will start accruing to the poor too, sooner or later as their income, employment and consumption will also get a boost. Basic philosophy behind the model of economic growth adopted in the name of New Economic Policy in India is the same. This model, which is also called Liberalisation Privatisation, Globalisation (LPG) Model works by way of libralising industry of controls. Under the new scheme of things fiscal incentives are given to businesses and companies and public sector enterprises are privatised. Imports are made free from tariff and non-tariff barriers and controls from foreign investments are lifted to facilitate free flow of foreign capital.
Though this is correct that the nation has witnessed spectacular growth in GDP in the last two decades, however benefit of the same has failed to reach the poor. During Tenth and Eleventh Five Year Plans, GDP grew by nearly 8 percent annually; however during the same period unemployment also increased simultaneously and this growth was termed as jobless growth. According to the data published by National Sample Survey Office (NSSO) during the last 10 years work force increased by nearly 12 crores, whereas we could provide employment to only 2 crore people (20 lakhs annually) during this period. Between 2004-05 and 2009-10, in merely 5 years period, 2 crore 50 lakh people went out of self-employment and 2 crore 20 lakh people joined the army of casual labour, which hints at deterioration in quality of employment.
Deprivation of poor has further worsened. As per Census 2001, 45 percent of farmers belonging to scheduled tribes reported that they were working on their own land, which declined to only 35 percent in Census 2011; percentage of farmers belonging to scheduled castes working on their own land declined from 20 percent to 15 percent during this period, whereas in 2001, 37 percent workers in rural areas reported themselves to be landless agricultural labourers, in 2011, this number increased to 44.4 percent. It is notable that pace of poverty reduction has also declined significantly after the adoption of LPG policies.
One can conclude that due to policy of LPG, in the last 25 years despite fast rising GDP, condition of poor has been worsening; they are losing land and employment (and livelihood) both. Quality of employment is also going down gradually. Therefore, without denying the importance of GDP growth, basic question is, why only poor sacrifices for growth meant only for rich? Why not we make policies where rich sacrifices for the benefit of poor.

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