Indian freebies are working. But it’s not reducing poverty
India is stuck battling poverty through subsidies and "freebies" rather than with more effective and long-lasting policies due to low income levels at the bottom of the pyramid, a frustrating lack of precise consumption statistics, and restricted opportunities for income development. Instead of trying to reduce poverty by raising income levels, efforts are being made and will continue to be made to encourage individuals to spend less. Being in this circumstance is not ideal.
Withdrawing subsidies is politically challenging, and each year they place more financial strain on the government. The possibility of improvements achieved through government programs that don't involve ongoing subsidies running out is also present, as has happened with the installation of bathrooms and gas connections. In any event, by attempting to cut spending on necessities, the government is only keeping the poor afloat rather than actually helping them escape it.
Poverty reduction is tied to freebies
Withdrawing subsidies is politically challenging, and each year they place more financial strain on the government. The possibility of improvements achieved through government programs that don't involve ongoing subsidies running out is also present, as has happened with the installation of bathrooms and gas connections. In any event, by attempting to cut spending on necessities, the government is only keeping the poor afloat rather than actually helping them escape it.
Poverty reduction is tied to freebies
The issue is that much of the progress gained in reducing poverty has taken place in regions that greatly benefit from subsidies and programs at the national and state levels, as shown by Niti Aayog's update to its Multidimensional Poverty Index (MPI). These include having access to homes, bank accounts, power, drinking water, toilets, and other amenities.
Distressingly little progress has been made in indicators like education and health, both of which have a greater influence on the long-term decrease of poverty. With a decrease of 21.8 percentage points between 2015–16 and 2019–20, the sanitation category—which tracks the proportion of families without exclusive access to a modern toilet—saw the most significant improvement. It wouldn't be far-fetched to say that the Swachh Bharat Abhiyan, the government's campaign to end open defecation, is responsible for a significant portion of this progress. Several states have prioritized this as well.
Distressingly little progress has been made in indicators like education and health, both of which have a greater influence on the long-term decrease of poverty. With a decrease of 21.8 percentage points between 2015–16 and 2019–20, the sanitation category—which tracks the proportion of families without exclusive access to a modern toilet—saw the most significant improvement. It wouldn't be far-fetched to say that the Swachh Bharat Abhiyan, the government's campaign to end open defecation, is responsible for a significant portion of this progress. Several states have prioritized this as well.
Why subsidies are here to stay
Making the argument that reducing poverty involves more than just supplying the necessities and stopping it is crucial. Yes, everyone needs a roof over their heads, access to power, clean drinking water, and cooking gas. However, ambitions don't stop there.
People should demand more, and they will not get it without increasing their earnings. They will continue to believe they are impoverished, which is likely the most accurate indicator we have in the absence of official statistics. The government's Household Consumption Expenditure Survey, which analyses household incomes and expenditures, is one of the most significant and reliable measurements of poverty. The most recent data, for 2011–12, is older than ten years. The administration discarded the survey's findings from 2017–18 in 2019.
Making the argument that reducing poverty involves more than just supplying the necessities and stopping it is crucial. Yes, everyone needs a roof over their heads, access to power, clean drinking water, and cooking gas. However, ambitions don't stop there.
People should demand more, and they will not get it without increasing their earnings. They will continue to believe they are impoverished, which is likely the most accurate indicator we have in the absence of official statistics. The government's Household Consumption Expenditure Survey, which analyses household incomes and expenditures, is one of the most significant and reliable measurements of poverty. The most recent data, for 2011–12, is older than ten years. The administration discarded the survey's findings from 2017–18 in 2019.