A Bold New Program to Show the World the Way?
Can India Defeat Poverty?
When people are at rock bottom, a little help goes a long way. But what about when the money runs out? What should be the source of funding? This 2013 excerpt is from FP Magazine, Jan 8.
by Amanda Glassman & Nancy BirdsallOn New Year's Day, India, the world's largest democracy, launched what may become the most ambitious anti-poverty program in history. Called the Direct Benefit Transfer (DBT), the initiative will directly provide cash to poor families -- at first more than 200,000 people, then potentially hundreds of millions -- via the banking system.
India has roughly 350 million people living on less than 56 cents a day, the country's official poverty line.
Confusing rules on eligibility, poor administration, and corruption have made India's huge and wasteful system of in-kind subsidies a failure. Not only did the subsidies bring little reduction in poverty, but shockingly, 70 percent of the beneficiaries were not even poor.
Despite a decade of rapid economic growth that saw per capita income expand from $460 to $1,489, half of all Indian children are stunted. Twelve percent of children work. Roughly a fifth of girls are married by age 15.
Large cash-transfer programs in Ethiopia, Kenya, and Malawi are effective in increasing consumption, schooling, and nutrition, regardless of whether they are tied to such conditions as mothers keeping children in school. Iin the near anarchic Democratic Republic of the Congo they are both cheaper and better spent by the poor than in-kind subsidies.
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JJS: The article skirted the issue but what should be the source of funds for the welfare payments? If the source were to be the values that society generates, then such payment would no longer be a handout but a fair share of the common wealth that all members of society are entitled to. The wealth that is already ours is the payment that everyone makes for land and resources, things nobody made and everybody needs.
Sharing nature and natural values is not only fair but also effective.
To finally and thoroughly eradicate poverty, society must share nature. That means not a walk in the park but every member needs to have some land and to receive a share of the value of the land in their region. That, in turn, means everyone must pay in land dues or land taxes and get back a “rent” share or Citizens Dividend. People need a place where they can work themselves out of poverty; owning some land allows that. People need an income floor so they can negotiate livable wages; receiving some land value allows that.
When land and her rental value are not shared, then the more grasping individuals lay claim to both. When some get more than their share, others get less and become poor. In India, progress has pushed up the value of locations, so that absentee owners are returning from England to reclaim what was once theirs. Yet if they had to pay land dues, probably they would not be so eager to reclaim what their parents had abandoned when its socially-generated value was low. Because such outrageous fortunes are made in real estate -- in lending and developing -- by recovering land “rents” society could dramatically close the income gap.
This reform of requiring individuals to pay land dues or land taxes but not pay the counterproductive taxes on earnings is an idea that has gained much support in the British press. The British once exported their language to India (English is one of the official languages there); perhaps now the British isles might serendipitously export the proven way to eradicate poverty. This geonomic tax shift has worked wherever tried.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
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