The BJP's plans will do nothing for India's landless labourers, while The Congress party's schemes face practical and political difficulties
thought of the poor when the weather turned cold. Election season has the same effect on India’s politicians. With national polls looming in April and May, the two main political parties are competing to shower money on the indigent. The governing Bharatiya Janata Party has already started paying benefits to farmers who own less than two hectares of land. The Congress party promises cash payments for the poorest 50m households.
India has about 50m people living in extreme poverty, according to the World Poverty Clock, an Austrian research project. Many others are severely pinched. Yet India’s safety-net is both immensely complicated, with over 950 centrally funded schemes and subsidies, and stingy. Old people protested in the capital last year, complaining that the central-government pension of 200 rupees a month has been frozen since 2007. Much of the money spent on welfare never gets to the poor.
Targeting welfare is costly and difficult in a country like India. How is the state supposed to identify the poorest 50m households in a country where income and spending are so hard to track? If it looks for signs such as straw roofs, it will almost certainly miss many poor people, especially in the cities. The political economy of targeted schemes is also tricky.
Two years ago a government report suggested a bold new approach. Instead of a universal basic income—an idea doing the rounds in rich countries—create a nearly universal scheme from which you exclude the richest quarter of the population. They are easier to spot than the poorest. The report estimated that poverty could be virtually eradicated at a cost of 5% of—just about the same as the combined cost of the existing schemes and subsidies.
Binning the hotch-potch of existing schemes and implementing a radical new system would be politically difficult. Yet the broader plan may have a better chance than a targeted scheme, since many of the beneficiaries of the old schemes would get some cash under the new one. And it must be worth a try. The eradication of one of the world’s very worst problems is a prize worth fighting for.
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