How easy it is to bridge gap by removing subsidies and increasing administrative prices!

By O.J.George

Let us be amused by the reports that appeared recently that IMF sold 200 tonnes of gold to RBI at $ 6.7 billion and Finance Minister Pranab Mukherjee intends to remove subsidies on fertiliser and oil.

On the one hand, the forex reserves are booming and the country can afford to buy about half of the IMF’s gold stocks. It is the same country which had sold its gold to the UK during the regime of Chandrashekhar to make payment of international bills. Surely, we have grown and that too substantially.

On the other hand, we are taking away the subsidy component of farming inputs like fertiliser and everyman’s requirement of oil. Of course, there is no harm in maintaining some sort of a balance, but without unsettling the kitty of poor people.

And the reckoning of poverty line itself is not sacrosanct to distinguish it from non-poor chaps. The purchasing power to have the essential amount of calories to sustain life is the determining factor for distinguishing between poverty and the absence of it. And there is something called rural poverty and urban poverty. The benchmarks for both are a little different. All the same, if the lifeline of calories is removed, such Homo sapiens would breathe their last.

All provisions of welfare are meant for the below the poverty line. And mind you, those above the poverty line are not that cosy. If Rs 100 is required to maintain essential amount of calories and if one has it, he is above the poverty line. We know it for a fact that there is not much difference between a person earning Rs 99 and another with Rs 100.And the 100-wallah is above the poverty line!!

Now we are selling off 10 per cent of profit making public sector units for sourcing funds for the national rural employment guarantee scheme. Fair enough, a lot of people would be benefited by the scheme. But that is not enough. The windfall gains, that too irregular, made by vested interests by the sale of 3 G spectrum amounting to thousands of crores of rupees, the unethical earnings of people like the Jharkhand man, Madhu Koda, crores of crores of money stashed by Indians, particularly politicians, in God-forsaken countries, Oh, what gargantuan amounts would be available for undertaking welfare measures for the ordinary mortals, had they been secured here. These are national assets pilfered by
Ek Din Ka Sultans.

We are going in for absolute capitalism, which has gains and pitfalls. All right let the rulers decide themselves for policies. But let them not turn a Nelson’s eye on the inbuilt welfare measures available in copy book capitalistic countries. We have not made a clarion call for implementing such measures here. NREGP cannot replace such welfare measures like sustenance allowance for the jobless and the jobs-lost, health schemes and the like.

Without implementing these, if the country goes in for removal of subsidies and increase in administrative prices, the situation would be callous for am admi.