Pre-election philanthropy is not the best way to help poor people, says Nobel-winning economist Abhijit Vinayak Banerjee. On the face of it, this comment is no doubt significant for someone who has advocated handing over cash to the poor to turn the economy around. This observation of the economists is becoming more meaningful in the context of what the Prime Minister calls the ‘Culture of Rauri’, the rights/properties of charity cases going on in the Supreme Court.
Discussion on the good and bad economy
Abhijit attended a discussion on ‘Good Economy, Bad Economy’ in Delhi on Saturday. The economics of the poor has been his longstanding research topic. Abhijit clearly said there that pre-poll campaigning is not the best way to help poor people. However, he did not say that charity should be stopped completely. According to him, there needs to be discipline in the matter. Because right now it is difficult to get out of this habit. Moreover, his speech is basically against the practice of throwing donations to attract votes on the eve of elections.
That is why he specifically spoke of ‘charity before voting’ and emphasized the need for discipline. So he stands against charity in one sentence as a whole, a part of the economic world thinks that it is not right to think that. Again, the prime minister and the central government had a clear claim that charity culture is creating pressure on the country’s economy. In this context, Abhijit is also believed to have added dimension to the debate by bringing up charity’s question of ‘good economy, bad economy’ and talking about its limitations.
Apart from charity, what can be the way to stand by the poor and redistribute wealth? According to Abhijit, the system of loan waiver for the poor was the oldest. Big borrowers are not poor. As a result, it was easy to do. But a more effective and better way would be to increase the tax burden on the rich. The money from that tax can reach the poor from a fund created by the central government. “If there is political will, a specific fund aimed at reducing inequality and redistribution can be created.”
In Saturday’s discussion, Abhijit also touched on development economics, realistic models of economics, the rising cost of living, social security, inflation, and unemployment. He reminded us that economic inequality is growing in India. As an example, the small car market is shrinking and the luxury car market is growing. Appreciated the central government’s ‘Make in India’ initiative in the context of unemployment. He also said that it is very difficult to shake China’s dominance in the field of production.
Their ‘supply chain’ is extremely robust. Lust for government jobs is also a major cause of unemployment in India, Abhijit said. According to him, the idea of a dream government job is so strong in the minds of a large section of people in India that a lot of talent is being lost due to it.