Tuesday, May 27, 2014

Random thought - Identifying the poor for targeted welfare


In the debate of universal vs targeted provisioning of services to the poor, the common argument of those pro-universal are that targeting system will exclude many who need the services. Today I came across an interesting way of 'identifying the rich' while reading the book "The Wisdom of Ants: A Short History of Economics" by Shankar Jaganathan.

The fifth century book composed by Sukracharya called 'Sukraniti' defined who is rich in terms of their need for wealth. Those who has amount enough to live for twelve years was considered sufficiently rich, enough for sixteen years was considered moderately rich and those having enough to survive for thirty years was defined as amply rich. Those in the amply rich category should serve the king for free for eight years. Only the penniless should receive wages from the king for their service. The idea of not paying the rich is justified as Sukraniti classified kingdoms on the basis of their ability to collect tax without oppressing the subjects. So, paying the rich would mean oppressing others by collecting taxes from them.

Statistically, to get such information about how long a person can survive with the riches he or she has is a big challenge. Nevertheless, at the village/local level, where everyone knows every other person, it would not be a difficult task to identify the beneficiaries. Hypothetically, if grains are to be given, one would know how much grains a family would need to survive for say, a month. And if the fair price shop is managed by people themselves, they will identify the families. We do not need ration cards for this purpose. Of course, this is just a raw idea and needs to be worked out upon.

My idea in trying to take lessons from the early literature is that universalization of services is not the solution for the failure of identifying right people; but to find better ways for identifying the needy.

1 comment:

  1. Very apt and true in the recent times when the nation has limited resources and can't give everything to everyone as it used to be earlier a few decades back....So, in the light of targeting, what you have proposed very crudely and nicely illustrates the Self-Governance, Management and distribution of the resources needed for living.
    Though in the present format(Panchayats) and CSS, it may be a bit difficult, We as PMRDFs may try it to apply it in the same or different manner at our districts....

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