The Hindu Business Line : Are the Ambanis affluent?

One wonders how Bill Gates or Warren Buffet would answer this question, not to mention our own Ratan Tata or Kumarmangalam Birla. One also wonders how the Chief Secretary of a State would view the subject, not to mention the CMD of a successful company earning Rs 20 lakh a month or, come to think of it, the clerk in the neighbourhood post-office.

It is no point referring to the rickshaw-puller or the farmer toiling in the fields because, first, he may not have heard of the Ambanis at all and, second, even if he has he would not be able to relate to what affluence at that level would mean.

On the face of it, therefore, affluence and poverty, are very relative subjects. Their meaning and significance are wholly governed by the position and perspective of the beholder. This at once makes the entire subject complex and difficult to comprehend using single benchmarks. Indeed, taking this line of reasoning to an extreme, it may be said that the shades of affluence and poverty are as varied as the minds to which the question of richness and poverty is posed.

It is all perception

But, of course, all this is in the realm of ‘perception’, which is wholly subjective. Being so, this can hardly be the basis of national policy-making. But, then, specially in poor countries, policies have to be framed to tackle the prevalence of poverty, and so poverty-benchmarks, in a manner of speaking, have been devised (so have yardsticks relating to affluence). Indeed, the income-tax rates for different slabs of income are wholly dependent on such a mental exercise — although there is no end to controversy relating to whether the slabs are justified are not.

And why only income slabs for tax purposes? Take the very concept of the ‘poverty line’ which has come to play such an important role in policy-making in the realm of poverty-eradication. In fact, the whole subject is so infused with ad hocism that not only is there a big dispute on where the ‘poverty line’ should be drawn, there is also no clear idea (certainly in India) of how many people actually live below it.

But, what is poverty, in the first place? Is it an issue of merely keeping body and soul together (that is, the bread aspect of life), or does it relate to a feeling of ‘happiness’ and ‘contentment’, which cannot be measured quantitatively but are nevertheless a part and parcel of human life and can severely neutralise the ‘material difference’ between a prince and a pauper.

Indeed, this subject has today become important enough to spur studies on an “index of happiness”, which is being thought of as a complement (or a supplement) to the accepted yardstick of GDP in trying to measure a nation’s position in the international league table of economic wellbeing.

Compounding Problems

But, as the saying goes, Man does not live by bread alone which, among other things, draws pointed attention to the fact that bread remains an essential element in the life of a human being although it is not the only element which would enable him to lead a ‘happy’ life. In other words, food, healthcare and shelter are indispensable for an acceptable physical existence which, in terms of policy, should be the focus of all poverty-eradication programmes. But all this requires funds which, in a poor country, are perennially in short supply, thus making the problem of tackling poverty even more difficult than it ordinarily should be.

If one adds education to the three subject-heads of food, healthcare and shelter, the picture in terms of social development is more or less complete albeit at its most rudimentary level. But what it also does is put even more pressure on the already-critical funds position, thus impeding the flow of funds into conventional development measures such as setting up industries, building power plants, implementing irrigation schemes, etc, which are indispensable policy-measures for any economy (rich or poor) which is bent on strengthening its position in the world at large.

Fundamentally, it is the scarcity of investible resources that makes the problem of poverty-eradication so difficult in a poor economy as ours, which very often leads to the drawing up of ‘poverty alleviation’ plans that, to put it bluntly, are neither here nor there, in a manner of speaking.

For the most part, poverty is not alleviated at all, and certainly not to the extent where it has a favourable impact on the future course of events. (After all, the nature of poverty is such that it is nearly always self-sustaining unless given a big blow which breaks the operative ‘vicious circle’.) This apart, the ‘alleviation’ schemes very often degenerate into funds-leakage conduits, which make the resource position of the economy concerned even more precarious.

Selective Approach

In India, as far as resource availability is concerned, poverty-eradication (in terms of the four requirements listed above) poses such a huge problem both in the rural and semi-urban areas that it is practically impossible to tackle it with equal intensity everywhere. Therefore, there has to be a selective approach which — as the Bihar Chief Minister, Mr Nitish Kumar, said while inaugurating an international seminar in Patna last week on ‘Revisiting the Poverty Issue’ — could lead to inter- as well as intra-regional problems.

The point is that since, in the given circumstances, this is inevitable, the deliberate unevenness in poverty-targeting action should not be cited as a reason for going slow with the selective approach.

One wonders why Mr Nitish Kumar has asked for a special meeting of the National Development Council to discuss ‘poverty-related issues’ because it is clear that no new light will be thrown on the subject by such an event. Clearly, there is no dearth of good ‘poverty-eradication’ schemes. What, however, is missing is effective implementation of the schemes, for which inadequate resources are not to blame but the inefficency of the implementing authorities themselves.

The big question is whether this lacuna will ever be filled with the right sort of input, which is getting scarcer by the year, especially in some parts of the country.