Poverty in India-A Comment

Poverty in India A Comment P N Junankar IN a long and well-documented paper Dandekar and Rath [1] reach two major policy conclusions. Firstly, that the policy of imposing land ceilings would lead to fragmented and uneconomical holdings. In addition, the working of a free market economy would lead to a tie facto (though not de jure) reconsolidation of land. They argue that a "patently uneconomic proposition cannot be sustained by law".1 As an alternative policy to alleviate poverty they suggest a massive public works programme "to enable the 30 per cent rural poor living below the desired minimum (excluding the 10 per cent poorest) to reach the minimum consumer expenditure.. . " This would be financed by the top 5 per cent of the rich agreeing "to a cut of a mere 15 per cent in their consumer expenditure'' and another 5 per cent "have to agree to a cut of a mere 7.5 per cent in their consumer expenditure."3 It is the contention of this note that Dandekar and Rath's suggestion for a massive public works programme cannot "meet the claims of the poor within the framework of private ownership of the means of production".81 shall argue that the increase in taxation required to finance the public works programme will be sufficiently large to have serious disincentive effects. In addition, the collection costs would be large (if not infinitely large!) and politically in the realm of the impossible (within the present socio-political .structure).