THE POOR, THE RICH AND THE IN-LAWED ROBIN HOODS

From early childhood we come to know of rich-poor classification. Since my childhood I have come to know that my family is poor compared to many others while many more families were poor compared to our family. I have never been trained to be hateful to the poor or the rich. I trained not to be jealous of the rich. The entire idea was to improve the lot of the family over the years. It is much later that I came to know of various gradations of the rich and of the poor. It is amusing that the educated people at intellectuals talk about 1% rich making life difficult for 99% poor. More amusing is the politicians and political parties – almost all claiming to be pro-poor and none wants estigma of being called pro-rich. In search of the poor I just don’t understand the basis of 1% rich – 99% poor divide nor do I understand what do the political parties and politician mean by calling them themselves pro-poor, which the poor are they talking about ? It is quite possible to have at least 10,000 intervals of income (all wealth) and find 9998 groups of people who are both rich and poor compared with some others. People who earn Rs 110/- (USD 2) per capita per day are regarded internationally as on the poverty line. India’s Planning Commission seems to consider families with per capita daily consumption expenditure of Rs 28-35 as those on the poverty line. When the diesel prices are raised, political parties oppose the move because rising price of diesel will cost an increase in transport cost, taxi and bus fares and the prices of all article consumptions that move from origin to consumer destinations. Whatever the price, my driver’s family in Kolkata has to buy items from the shops, which is inclusive of the cost of transportation based on diesel price. My driver is from a poor family and will have to bear the impact of diesel price. Hike. But such poor families as my driver’s family are a small percentage of the population of the dwellings in Kolkata. My driver’s family depends very little on a daily basis for taxis, mini buses, buses and diesel operated power generators. Most of the people in Kolkata who depend on diesel are much richer than my driver’s family is – their children go by school buses, their parents go to office in bus or mini bus. On the other hand in the native village of my driver, who hails from Bihar, very small faction of the people use on a daily basis, buses, mini buses and many of the daily consumption of goods are produced locally and transported over small distance by vehicles that do not use diesel or petrol (eg. cycles, rickshaw vans, hand-pull or animal driven cars). It is not clear of to which of the poor interest that the political parties are trying to protect? Some political parties organize strike/bandh to protest against high inflation or diesel or petrol price hike. These do not effect the income of the people who directly or indirectly consumes lot of diesel/petrol. On the other hand these reduces the income of the people who offer their services on a daily basis in the labour market as electricians, plumbers, articians and tiny vegetable vendors. Which category of poor people do the strikes and bandhs, protect or hurt ? As for the class of poor people in rural areas, irrespective of how much diesel price or petrol price increases, rice, wheat, kerosene and sugar are distributed to them at fixed price much lower than the ruling market prices. It is only the better off, richer people who are more effected by diesel price rise and the political parties wants to protect their interest rather than the poor people around the poverty line. It is sad that we have innumerable class of poor and innumerable class of rich people in this world. Ideally the world, should have been plentiful of goods and services, made available through the hard effort of each persons contribution so that each person can draw as much from the pool of goods and services as each one needs. Marx would have loved to live in such classless irralitarian society where no one apparently exploits any one. Unfortunately there is no way to measure and justify the needs of different person. Unfortunately again, those who are highly productive and capable of contributing maximum to the goods and services pool, there is no way to prove that they will not be exploited by the people whose needs happen to be greater than the highest contributors. How some are richer than others ? Why are some people rich – one reason is that they have through any heritance of lot of wealth that was originally acquired through muscle power or manipulation. Some people however, have become rich because they happen to be inventors as well as entrepreneur and have the luck of making success in the market place (for example, Mr Bill Gates of Microsoft). Some rich helps some poor There are numerous such examples of rich and wealthy man. Many rich and wealthy man happen to be philanthropic and give away lot of their wealth/income for the benefit of the poor people. Many charitable trusts and societies receive lot of donations from the rich and wealthy people, not only belonging to the top 1% but belonging even to the fourth decile of income (31%-40%). Besides individual, many corporates and clubs as well as religious institutions are fabulously rich. Some of them also allocate some of their resource or people who are poor or economically handicapped. State/Government’s Robin Hood role But why should poor people depend on the arms on the rich? Since there is no King or Emperor now-a-days, the poor has the right to get redressal of their unjust poor status from the State/Government, which has to take up the role of Robin Hood agency (Robin Hood was a heroic outlaw in English folklore. A highly skilled archer and swordsman, he is known for "robbing from the rich and giving to the poor"). The government must be able to spend as much money as is required to make the poor reasonably rich : they should get protected from inflationary price rise or reduction in income due to unemployment/under employment. Were would the government get such money ? The government will tax the various classes of the rich and also take loans from various classes of rich – loans that will be repaid along with interest in the future by raising more loans and more taxes from the rich. The money ultimately comes from the rich and goes to the poor but now it is no more charity of distribution of arms. It is the haftha (money extortion). Haftha collected by middleman called government (lawful Robin Hood) /politicians for distribution to the poor who appoints this middleman by casting votes. All this is fair enough. But problem remains: how do the government/politician distribute the haftha (lawful part, forget the unlawful part) collected to various classes of the poor: by giving a subsidy of Rs 350 per LPG cylinder to the poor people (?) who can afford to buy costly gas ovens or by giving two more days of wages to a BPL man under the rural employment guarantee scheme ? Robin Hood’s distribution of looted bounty There are many ways and forms in which the State/Government distributes the monies robed from the rich to various classes of the poor. Many of the capitalized states now called them welfare state. When the economy goes into depression, the government gives doles to the unemployed. If there is a structural change in the economy, the state provides re-training facility to labour displayed by structural changes so that they can be employed again to the new jobs that are being created. In many welfare states, the government owns and manages, hospital and health services, for the benefit of the poor. Government also spends huge amount to create and maintain education infrastructure so that the children of poor classes can have access to education at relatively low cost. The rich capitalist countries depend for their economic growth largely on investments made by private individuals, groups and companies. They can afford to do that because the poor in their countries are much better placed in terms of standard of living compare with other under developed / developing countries. In underdeveloped/developing countries like India, even most classes of rich are poor in terms of standard of living as compared with the rich in the rich capitalistic economies in the western world. Here, Robin Hood role has the opportunity of greatly expanding its role. Here, the government sets up its own companies for utility services (electricity, telecommunications, etc.) If government arranges to set up machinery that would give wages to unemployed people in rural areas for 100 days a year against some productive or unproductive unskilled jobs. It will not only set up school, colleges and university and pay the salaries of the teachers and non-teaching staff but also make education free to girls upto class X. Besides, provide each high school girl students free bicycles,andsanitary napkins. Students from poor families will get free books and financial assistance for higher education. Health services are maintained by the state with the entire infrastructure, the salaries of doctors and para-medical personnel are borne by the state, besides providing free medicine to pregnant women of poor families. Poor families are to be provided with food grains like rice and wheat, cooking fuel like kerosene will be supplied to poor families at a very low price compared to the market price. LPG, diesel, petrol are supplied to almost every citizen at subsidized (below cost) prices. Government should also give spaces on footpaths and roads to hawkers and auto service repairers free of cost. For poor households (husband and wife) the government gives Rs 42,000-50,000/- for construction of houses. Government also gives financial assistance for marriage of girls in poor families. To ensure that the students in the school come to attend classes the government gives mid-day meals free of cost. Government gives financial assistance to various association/clubs for pursuing the sports and games like foot ball, cricket, swimming etc. People in large numbers get killed due to consumption of illicit liquor, the government provide financial assistance to the effected families, probably treating this as similar to financial compensation extended to families effected by floods and earthquake. It is difficult to enumerate the extensive Robin Hood activities of the state developing countries like India. A large percentage of income of various poor classes come from the benevolence of the government and probably a much higher percentage of the expenditure of the various poor classes is subsidized by the state Robin Hood. If Robin Hood have unlimited amount of resources raised to compulsory haftha levies/taxes, there would not have been any problem in allocating the collected money for various purposes and various classes of poor people. Unfortunately, the resources that can be raised by the Robin Hood is, though enormous, is limited and falls short of the demand of various categories of poor. On what principles do Robin Hood make the allocations so that the allocation seems fair and optimal? The allocation of pro-poor subsidy/expenditure is also determined without reference to the short and long term impact on the load of the poor. Considering the case of LPG, the entire opposition Robin Hood parties demand that the price of LPG should remain constant irrespective of the level of consumption. So if the household consumes more LPG, the household enjoys greater subsidy. It is better to consume 24 LPG cylinder gas per year than consuming 6 or 9. As the prices of petroleum oil rise in the international market, a constant price of LPG implies rising rate of subsidy per unit of gas consumes. This encourages inefficient use and wastage of LPG gas in household kitchens. The great Robin Hoods have no idea as to why so much of gas is burnt, why there is no real cooking or heating is taking place. Some ladies after mixing the water with wheat powder (atta) and drawing from the dow, complete the task of rolling the material into shape of rotis – as many rotis as required for the dinner, then she switches on the gas flame and then get the fulka done one by one. Some other ladies roll a single roti and get a fulka done; and repeat this process for each fulka, wasting gas.Similarly cooking dishes boiling water without the use of lid cover lead to wastage of gas. Again gas is being burned while nothing is being cooked or heated up; the cook is busy cutting vegetables or washing them. Very few use pressure cookers to prepare rice or dal to save on gas because they think boiling rice and dall in handis and kadais test better (subsidy for special tongues). Such wastages take place in the case of kerosene, sugar, electricity, fertilizer, irrigation water, street-side tap water, and other items that are supplied by Robin Hood at huge subsidy. Robin Hood political parties do not bother about wastages nor do they bother about optimality of the allocation of pro-poor subsidies among different sections of the poor in different locations/areas and among various purposes. If an additional Rs 100 crore is available through additional taxes or additional fiscal deficit (borrowing), the state/government arbitrarily decides what kind of additional subsidy expenditure it will make, depending on the pulls and pressures from various subsidy-mongers. If the government is constrained to reduce the subsidy, if decides arbitrarily as to which kind of subsidies are to be cut and to what extent ? The Robin Hood opposition parties however, does not want any cut in any subsidy but argue for more subsidy on every possible account. This problem is difficult in multi party democracy. But easily solved in single Robin Hood party in communist countries where whatever the single parties Robin Hood functionaries decides as subsidies are implemented without any protest. In countries like India, with multi party democracy the percentage of population covered by state Robin Hood subsidy expenditure is huge. First, the people on or below the poverty line who earns maximum upto Rs 60,000/- per year. They cannot pay income tax but get all sorts of subsidies : however, they have to bear indirect commodity taxes on whatever they purchase outside the system of subsidized supply of essential goods by Robin Hood. These group of beneficiaries of subsidy account for about 30% of the population. Next 30% of the population are from families with annual income of Rs 60,000 – 1,55,000/-; they do not pay any income tax. But receives many kind of subsidies including subsidized food rations. The third group of people are from families with annual income of Rs 1.5 lacs to Rs 5 lacs. They probably account for another 20% of the population and pay a maximum of Rs 30,000/- as income tax. They also enjoy all these subsidies on bus fares, train fares, subsidized ration items, subsidized education and health services. Next comes the people who come from families with annual earnings more than Rs 5 lacs to Rs 50 lacs. May be they account for another 10% of the population. The maximum income tax an income earner in this group pays is about Rs 15 lacs per year. They are the maximum beneficiaries of subsidy on petrol, diesel, and LPG gas cylinder. Thus, roughly 90% of the Indian population enjoys subsidies and only a small percentage of population pay substantial part of the income taxes collected. The families with earnings of more than Rs 50 lacs also enjoy, if they so desire, subsidy on purchase of solar power devisors. Indians therefore, are a great subsidy mongering, subsidy driven society but this society is not concerned at all whether they are conic disease of subsidies is sustainable, whether the subsidies are going to hurt the economic strength of the nation in future or they are travelling towards another great bankruptcy ?