Yet another setback for poverty eradication where we are taking our economy, please have a look!
In this issue:
» Indian banks write off Rs 1 trillion in 13 years
» India GDP comes down to 5%
» Current Account Deficit more than 5%
» NPA of bank has reached above 5.7%
» JP Morgan fined US$13 bn over toxic assets sale
» Obama falsifying unemployment figures
» OECD pegs India's growth at 3.4%
» ...and more!
One of the country's parliamentarians recently said," Poverty is just
a state of mind and self confidence is needed to overcome it". This was
probably the most bizarre definition of poverty we have ever come
across. It speaks volumes of what the government thinks of this social
evil. It is probably deeming poor citizens to be just voters who can be
flattered by promises. With no intent, nothing can be done to eradicate
poverty in India. And now one of the means through which poverty can be
eradicated has also been trimmed.
"The game plane of politicians are that they want to keep poor in poverty so that they could purchase their votes". But now it is good news for the politicians of India and major poor countries because all the economical parameters lead to increase in poverty not to eradicate poverty because the fund and their sources have dried up.
The World Bank has curtailed its window which offered concessional loans to India to fight poverty. These concessional loans are available to countries that are below a certain benchmark. The benchmark in this case is per capita GDP. With India surpassing that benchmark, it is now no longer eligible for such concessional loans.
This effectively indicates that India is no longer poor and the standard of living has improved. However, in reality more than half of the country's population can barely afford a reasonably decent standard of living. And with no hope of redressal, neither from the government nor by way of international aid, Indians may have to learn to live in poverty.
World banks' withdrawal has indeed come as a setback to India. But we believe this is because of the use of a flawed benchmark. Per capita GDP measure gives wrong picture of any nation's standard of living when there is a huge income divide. Increasing wealth amongst the rich can result in higher per capita GDP. And this is precisely what is happening in India. Rich are getting richer and poor are getting poorer. While this increases the per capita GDP, it does not reflect the true picture of India.
Now considering that support window from World Bank has been curtailed, it is yet another setback to poverty eradication in India.
We pity that even after 65 years of independence, there are no visible signs of large scale poverty reduction in India through trillions of rupee have been distributed under head subsidy which have made poor further poorer and officals and middle men richer.
As per one World Bank report nearly half of the Indians still do not have access to basic sanitation facilities. And this is a sorry sign for a country which is en route to conquering Mars!
The current state is a result of rampant corruption and lack of intent from the politicians. Money destined to be used for the poor is siphoned off this is the reason that why politicians do not want to remove corruption. Then there are scams, subsidies and wasteful expenditures which swallow the balance money!
We feel that no government can change the face of India unless there is an intent to do so. And the intent can change only when people at the helm rise above their own personal self interests and work towards creating a more equitable society.
Rural wage inflation : Rural wage inflation
has its pros and cons. Increase in rural wages results in better
standard of living and eradicates poverty. However, at the same time,
since rural labourers are mostly unskilled and are typically employed in
manufacturing industry, rural wage inflation hurts the end user of the
commodity in the form of increased prices. Overall, rural wage inflation
is positive as it eradicates poverty and negative in one sense as it
fuels inflation. Now, rural wages in India have increased by 16% between
2005 and 2012. Amongst all the states, Kerala has the highest rural
wages at Rs 315 per person. Also, on a pan India basis, South India has
highest wages compared to other parts of the country.
It is interesting to note that average wages in most states are higher than the one that are being paid under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). Since MNREGA sets base wage rate below which labourers do not work it has been blamed in the past for having inflated rural wages to a large extent. However, the fact that most rural wage rates are currently higher than prescribed by MNREGA suggests that there are other factors driving rural wage inflation. One factor could be infrastructure boom. This has led to significant demand in unskilled labourers thereby driving wage rates across states...By Equitymaster Agora Research Private Limited.
_______________________________________________________________________ "Democracy means- A government of the people, by the vote of the people, by the money of the people, and for the welfare of the people". Thanks
In this issue:
» Indian banks write off Rs 1 trillion in 13 years
» India GDP comes down to 5%
» Current Account Deficit more than 5%
» NPA of bank has reached above 5.7%
» JP Morgan fined US$13 bn over toxic assets sale
» Obama falsifying unemployment figures
» OECD pegs India's growth at 3.4%
» ...and more!
"The game plane of politicians are that they want to keep poor in poverty so that they could purchase their votes". But now it is good news for the politicians of India and major poor countries because all the economical parameters lead to increase in poverty not to eradicate poverty because the fund and their sources have dried up.
The World Bank has curtailed its window which offered concessional loans to India to fight poverty. These concessional loans are available to countries that are below a certain benchmark. The benchmark in this case is per capita GDP. With India surpassing that benchmark, it is now no longer eligible for such concessional loans.
This effectively indicates that India is no longer poor and the standard of living has improved. However, in reality more than half of the country's population can barely afford a reasonably decent standard of living. And with no hope of redressal, neither from the government nor by way of international aid, Indians may have to learn to live in poverty.
World banks' withdrawal has indeed come as a setback to India. But we believe this is because of the use of a flawed benchmark. Per capita GDP measure gives wrong picture of any nation's standard of living when there is a huge income divide. Increasing wealth amongst the rich can result in higher per capita GDP. And this is precisely what is happening in India. Rich are getting richer and poor are getting poorer. While this increases the per capita GDP, it does not reflect the true picture of India.
Now considering that support window from World Bank has been curtailed, it is yet another setback to poverty eradication in India.
We pity that even after 65 years of independence, there are no visible signs of large scale poverty reduction in India through trillions of rupee have been distributed under head subsidy which have made poor further poorer and officals and middle men richer.
As per one World Bank report nearly half of the Indians still do not have access to basic sanitation facilities. And this is a sorry sign for a country which is en route to conquering Mars!
The current state is a result of rampant corruption and lack of intent from the politicians. Money destined to be used for the poor is siphoned off this is the reason that why politicians do not want to remove corruption. Then there are scams, subsidies and wasteful expenditures which swallow the balance money!
We feel that no government can change the face of India unless there is an intent to do so. And the intent can change only when people at the helm rise above their own personal self interests and work towards creating a more equitable society.
It is interesting to note that average wages in most states are higher than the one that are being paid under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). Since MNREGA sets base wage rate below which labourers do not work it has been blamed in the past for having inflated rural wages to a large extent. However, the fact that most rural wage rates are currently higher than prescribed by MNREGA suggests that there are other factors driving rural wage inflation. One factor could be infrastructure boom. This has led to significant demand in unskilled labourers thereby driving wage rates across states...By Equitymaster Agora Research Private Limited.
_______________________________________________________________________ "Democracy means- A government of the people, by the vote of the people, by the money of the people, and for the welfare of the people". Thanks
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