Tuesday, Apr 28, 2015

The wrong end of the right debate

It is Amartya Sen, the nemesis of neo-liberals, who would emphasise toilets as much as growth. (Photo: PTI) It is Amartya Sen, the nemesis of neo-liberals, who would emphasise toilets as much as growth. (Photo: PTI)
Written by Arvind Virmani | Published on:August 25, 2014 12:00 am

In an article in The Indian Express (‘The pragmatic PM?’, August 22), Ashutosh Varshney of Brown University asserts: “It is Amartya Sen, the nemesis of neo-liberals, who would emphasise toilets as much as growth.” This is perhaps true in the exalted world of Western academia and among many academic followers of Sen in India, but not in the trenches of Yojana Bhavan, North and South Block, where many of these and related issues were decided.

It is the followers of Sen (neo-communists?) who emphasised increased “private health spending” over “public health” spending on sewers and sanitation. It is the “neo-communists” who emphasised “right to food” as a means of eliminating malnutrition, as against sewers, sanitation and toilets.“Market liberals” like me have  showed that the absence of these is the main cause of child malnutrition.

It is these neo-communists who emphasised doubling and tripling the money allocated (inputs) to standard, inefficient, corrupt and leaky food, education and health programmes, ignoring arguments on the vital need to first improve their effectiveness to achieve better outcomes.

A Planning Commission paper by this writer, “Poverty and Hunger in India: What is Needed to Eliminate Them”, (2006), analysed poverty, hunger, education and health indicators (in a comparative framework) and their linkage to government policy and programmes, arguing that the “broad theme that emerges is that the failures on this front, apart from the indirect effects of growth, are linked directly to the failure of governance. This failure has many dimensions; the mis-allocation of government resources, the failure to follow norms of social benefit-cost analysis that were the raison d’etre for the introduction of national planning, the neglect of public and quasi-public goods that are the most fundamental justification for the existence of government and a gradual (over decades) but progressive deterioration in the quality of governance. This conclusion differs radically from the conventional wisdom (national and international) about India’s poverty, social indicators and income distribution. Even if treated as a hypothesis it merits debate and further analysis.”

The paper concluded that “It can be argued that the ideal (most efficient) social welfare policy is a direct transfer of income to the poor through a negative income tax. In a developed country this would be very easy. How can we transfer these amounts directly to the poor, the needy and the disadvantaged in a poor country? The answer, by setting up an Indian version using a modern smart card system that delivers cash and/ or subsidies to the poor based on their entitlements as per specified parameters and norms. Such a smart card could be programmed with identity (photo and biometric fingerprint), and have information on social (SC/ ST) and personal/ household characteristics. Each person/ household’s entitlements could be in the form of specified subsidies …continued »

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