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Defining The Beneficiary

As the Union budget approaches, debates over welfare grow intense.

Written by Yoginder K. Alagh |
Updated: January 17, 2017 11:58:12 am
Union budget, budget 2017, Union budget 2017, arun jaitley, Union budget debate, indian economic association, constitution, National Statistical Commission, poverty in india, hunger, Rokkam Radhakrishna, economy, indian economy, indian economy status, socio economic status, indian expres column In superb, terse sections, Radhakrishna spoke about the relationship between income, food and inequality, offering qualifications if we’re serious about removing hunger and poverty.

As we enter the last run towards the Union budget, even a laidback character like me, drinking his morning chai in a small garden in Ahmedabad, gets confused. Now, the Constitution and the law don’t require anybody to clear citizens’ minds, but Socrates did, so here are some questions. Last month, Rokkam Radhakrishna, in his presidential address to the Indian Economic Association, gave a superb talk on poverty, inequality and policy. Inaugurating the conference, I politely told him that even though he was a former chairman of the National Statistical Commission, he needn’t expect policy waves following his address. However, I was pleasantly surprised that on Makar Sankranti, apart from kites, poverty policies were also flying.

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In superb, terse sections, Radhakrishna spoke about the relationship between income, food and inequality, offering qualifications if we’re serious about removing hunger and poverty. Years ago, N.C. Saxena emphasised access to social facilities and educational opportunities, for which he suggested a system of “deprivation points”, based on indicators like caste, educational achievements, etc.

This question of indicators keeps recurring. As I write this, an expert group of the ministry of rural development has recommended that indicators from the Socio-Economic Caste Census of 2011 (SECC-11), which has individual-level data, be used for establishing access to beneficiary schemes. We have limited experience in developing deprivation points, even in an admissions system for a place like JNU.

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When I was its VC, the university placed resources with the students’ union to develop a workable system of “deprivation” for a debate on admissions reform. Incidentally, the participants included Sitaram Yechury and Prakash Karat, both JNU student union presidents in their day.

Ultimately, a system of deprivation points was designed — points were given on the basis of the location of the college of the last degree, with an advantage to those who graduated from the poorest quarter of districts in India, factoring in sex and BPL status too. If you were a girl, an OBC, graduating from Bastar and your parents were BPL, you got nine deprivation points. A non-BPL OBC boy from Delhi got three. In the first year, only five students made it on this count — five out of a thousand is half of one per cent. But real change is gradual.
However, this argument is blurred when applied to the provision of universal facilities. Saxena recognises differential entitlement systems will be required for different facilities, a very valid point, but one that creates a nightmare for the real world.

Niti Aayog vice-chairman Arvind Panagariya has emphasised the need for such evaluations. I pray they will, once and for all, bury the calorie-denominated poverty line I developed in 1976. There are many debatable issues. K.L. Datta explains the complexity of the relationship between calorie consumption and poverty; Sainath discusses some facilities having to be universally provided. Saxena takes entitlements head-on; earlier poverty policies hadn’t taken these issues frontally. Panagariya must cope with all that: A neat separation of poverty estimates and entitlements won’t pass muster now.


We have another googly. After demonetisation, many expect succour for the poor. An RBI dividend isn’t there because most of the notes are in; so, new ideas are needed. Otherwise, it’ll appear the scheme was to give a “haircut” to the economy, to make it bounce back. That seems too corporate-friendly.

Adventurous economists advising the government have recommended implementing a negative Tobin income tax. How that solves the problem of identifying those who deserve these schemes and why these leakages won’t impact, say, a money transfer is left to more prosaic implementers. Cash, as demonetisation showed, is permeable; those who have it are not the ones always who own it. These are all good problems to solve — they show that democracy is alive and kicking.

The writer, an economist, is a former Union minister

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First published on: 17-01-2017 at 12:00:47 am
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