Title: What will the practical economic policies viz. populist, political
policies, be for poverty eradication?
The cycle of poverty is the "set of factors or events
by which poverty, once started, is likely to continue unless there is outside
intervention.” When talking about poverty in material terms, poverty is
typically measured by monetary value. Relative to today's standards, poverty
has been determined by the World Bank as having an income of less than $2/day.
However we can also measure poverty in terms of material goods. In terms of
material goods poverty often equates to a lack of some of the most basic and
important material goods such as a lack of water, sanitation, nutrition, gender
equality, health facilities, education, jobs and an increase in Malaria and
HIV/AIDS cases.
Once a person or community falls below a certain level
of resourcefulness, a chain of events starts to occur that tends to perpetuate
the situation: progressively lower levels of education and training leading to
lack of employment opportunities, leading to criminal activity (such as sale of
illegal drugs) for survival, leading to addiction, shattered health, early
death, and breakup of family, leading to even bleaker future for the next
generation ... and so on. This cycle continues until someone intervenes by
providing worthwhile means (not handouts) for people to climb out of
destitution, and by ensuring children's health and education.
One in three of the world's malnourished children is in
India, more even than in sub-Saharan Africa, according to a United Nations
study. Despite significant economic progress in the past decade, India is home
to about 25 percent of the world's hungry poor. The International Food Policy
Research Institute report has sharply criticized India for not moving fast
enough to reduce malnourishment, and has said that its nutritional indicators
are far worse than its economic indicators merit. 37% of people in India live
below the poverty line.
In other words, the average income in India was not
much different from South Korea in 1947, but South Korea became a developed
country by the 2000s. At the same time, India was left as one of the world's
poorer countries.
If we look back in history, the economic policies made
a big difference to the impact of poverty we deal with today. Between the year
1947 and 1990 many licenses were applied in situations where a set up and
running of a business needed to be done.
This was a result of India’s decision to have a planned economy, where
all aspects of the economy are controlled by the state and licenses were given
to a select few, therefore, corruption flourished under this system. Businesses
had to bribe government officials even for routine activities, which was in
effect a tax on business.
India had started out in the 1950s high growth rates,
openness to trade and investment, a promotional state, social expenditure
awareness and macro stability but ended the 1980s with: low growth rates,
closure to trade and investment, a license-obsessed, restrictive state, inability
to sustain social expenditures and macro instability, indeed being a crisis
situation.
Eradication of poverty in India is generally only
considered to be a long-term goal. Poverty alleviation is expected to make
better progress in the next 50 years than in the past, as a trickle-down effect
of the growing middle class. Increasing stress on education, reservation of
seats in government jobs and the increasing empowerment of women and the
economically weaker sections of society, are also expected to contribute to the
alleviation of poverty. It is incorrect to say that all poverty reduction
programs have failed. The growth of the middle class (which was virtually
non-existent when India became a free nation in August 1947) indicates that
economic prosperity has indeed been very impressive in India, but the
distribution of wealth is not at all even.
The following policies could be taken up to ensure
maximum reduction or alleviation of poverty in our country. They are:
1.
Extending property rights protection to the
poor is one of the most important poverty reduction strategy a nation can
implement. Securing property rights to land, the largest asset for our country,
which is vital to people’s economic freedom.
2.
Improving human capital, in the form of
health, is needed for economic growth. UN economists argue that good
infrastructure, such as roads and information networks, helps market reforms to
work. It was the technology of the steam engine that originally began the
dramatic decreases in poverty levels. Such technology also helps bring economic
freedom by making financial services accessible to the poor.
3.
Economic growth has the indirect potential
to alleviate poverty, as a result of a simultaneous increase in employment opportunities
and increase labor productivity. In India, most of the chronically poor are
wage earners in formal employment, because their jobs are insecure and low paid
and offer no chance to accumulate wealth to avoid risks. This appears to be the
result of a negative relationship between employment creation and increased
productivity, when a simultaneous positive increase is required to reduce
poverty.
4.
Raising farm incomes is described as the
core of the antipoverty effort as three quarters of our country today are
farmers. Estimates show that growth in the agricultural productivity of small
farmers is, on average, at least twice as effective in benefiting the poorest
half of a country’s population as growth generated in nonagricultural sectors.
Improving water management is an effective way to help reduce poverty among
farmers. Also, there should be better facilities for marketing the agricultural
produce throughout India.
5.
Welfare State Aid: Aid in its simplest form
is a basic income grant, a form of social security periodically providing
citizens with money.
6.
Industrial
Decentralization: In India, a prominent problem is that all the industries are
centralized or located in specific areas of the country. Decentralization of industries is necessary for the economic
growth of the country and industrial units should also be set up in rural areas
of the country for generating rural employment.
7. Instilling awareness of family planning to inculcate the
awareness about the importance of family planning in the minds of people. High
population leads to poverty.
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