Thankfully, there are signs that the Government is slowly learning that blind vote-seeking appeasement does not pay. Singh said that he wanted a system that will make the beneficiary potential of subsidies transparent, well-targeted, and suitably designed for practical implementation. Speaking at the Independence Day function in New Delhi, he called for a new mindset within the political class on prioritizing issues to fight poverty.
Gently bunking the subsidy regime of yesteryears, Singh said that “The most effective weapon against poverty is employment. And, higher economic growth is the best way to generate employment.” For this he insisted that the nation needs to “create an environment that encourages business to grow and create more employment, especially in the manufacturing sector.” He pointed out that it is only by removing “the disproportionate burden on agriculture in providing livelihood to two-thirds of our population” and moving people to gain employment in manufacturing and services can poverty be eliminated.
Economists have been rightfully arguing that India has a disproportionate number of people working in agriculture but have also been naively saying that they need to be moved to manufacturing and services. While a section of the population can be moved to these new areas, it calls for intense investments in education, training, motivation, and self-employment that are accountable.
Many politicians translate this to mean creation of handout schemes that finances people out of poverty. Such schemes have failed largely because the money has been siphoned by political parties for its cadre, offering irrelevant employment to the wrong population, and self-employment schemes being used to finance personal fantasies. Instead of trying to solve the problem itself through the creation of more bureaucracies, the Government may be better off empowering for-profit banks to introduce financing schemes.