By: K Parthasarathi1/31/2008 12:51:14 PM
The solution to the problem of poverty lies in making the people more skilled with investment in primary and secondary education with a slant to a vocational training and not through jobs for 100 days
Politicians and social organizations wail in every forum about Indias 35% of its population living in poverty with little hope of their early redemption. There is the general notion that the only cause for prevalence of poverty is lack of jobs and that poverty can be removed once jobs are created in the country. They promise jobs for one person in each rural family for 100 days a year.
They blame the reform measures undertaken since early Nineties and the globalization for the accentuation of the divide between the poor and rich. Shrill protests are voiced that there is a lopsided development in the country with a few reaping the benefits and the vast majority left out of the fruits of liberalization. There is a clamour especially when elections are around the corner that the five year plans and the budgetary allocations should provide larger resources for creation of jobs among the rural poor.
As in the olden days when kings dug wells and tanks, built roads and countries to provide work for the poor during times of famine, we too think of massive road building programmes like the golden quadrilateral or investing in rural infrastructure to combat poverty amongst the rural millions. Surely they provide immediate succour but it is a moot point whether the lives of the poor are transformed into one of comfort permanently.
These at best provide them with jobs for a few years and they revert back to their olden lives once these works come to an end. Certainly there are better ways for combating poverty and raising the lives of the poor than such food for work programmes.
Why is India able to capitalise on the Information Technology boom in comparison to many other countries? The main reason is its vast army of literates with good knowledge of English and computing skills. The lower middle class who had invested in education reaped the benefit of their acquired skill. Any discussion of removal of poverty must commence with what is referred to as human capital.
Human capital is defined by Charles Wheelan in his book Naked economics as the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, entrepreneurial vigour, even the ability to throw a base ball fast. It is what you would be left with if someone stripped away all of your assets- your job, your money, your home, your possessions- and left you in a street corner with only the clothes on your back.
You may be in trouble only for a short time as your skills will come in handy very soon. As the saying goes, a stone that is fit for the wall can never be found in the way. Why is it only the software programmers, writers, economists, accountants, doctors, scientists and businessmen are prosperous? Even the people at the lower rungs like electricians, mechanics, carpenters, diploma holders from ITIs do not suffer the pangs of poverty though not affluent. It is their acquired skills through training and education by their investments in human capital.
No man will go hungry if only he had the basic human capital of a skill in any sphere or education. He can easily relocate to places where he can find jobs for the skills he has. Jobs are never finite and can be created by anyone providing a new service or a better product. There is a place for everybody as the economy grows bigger with more production.
The unskilled labour even in times of economic boom could never earn the type of income that the skilled earned. There can be a significant economic growth in the country with increase in per capita income, creation of more jobs, and rise in real salaries and yet the unemployment figures and the number in poverty can also remain side by side unreduced. The divide between the skilled and unskilled would continue to be as wide so long there is a gap in capability or skill.
Poverty is a function of dearth of human capital. It can be, as most people do, partly attributed to the lack of jobs for the unskilled or partly skilled. This is only a manifestation of the illness or a symptom. It is only illiteracy or lack of specialized skill that drives people to poverty. Any amount of creation of new jobs needing skill will not dent the unemployment rate of unskilled population.
The solution to the problem of poverty lies in making the people more skilled with investment in primary and secondary education with a slant to a vocational training. There is a strong association between poverty and educational attainment. It is only those with low levels of education that are poor. Although free universal primary education is our aim, the schools that poor children enter are of very poor quality. The teachers too are of poor quality devoting very little time for teaching and the children having very little access for the instructional materials.
There is also lack of compensatory policies, positive discrimination that would enable the teachers to bestow greater attention to these deprived children and assist them in getting instructional materials. The number of dropouts on account of economic reasons, poor schools and indifferent teachers is substantial. While education alone cannot eliminate the poverty overnight for the family, the impact of education as a national poverty reduction mechanism cannot be overlooked.
It is the only means for acquiring the skills and for productive participation in the economy. It empowers the poor in due course with multiple returns in the form of higher income, better health, improved living style and reduction of population. Imagine the immense beneficial impact on the productivity and growth of economy of the country if even ten crore additional children both boys and girls get the specialized skills that education can lead them to. There is no other recipe for a stronger India to emerge than making a massive investment in education at the primary and secondary levels and building the institutional infrastructure across the country for this stupendous task.
It is good that the government is collecting a levy 2% cess on all taxes for education hoping to garner about Rs. 5000 crores or more each year. While the whole amount is to be earmarked for education and mid day meal scheme that would benefit the poor, this may not be adequate for the stupendous job of raising the literacy level substantially especially in certain backward states. There is a need to provide more resources towards this instead of toying with the idea of reduction of tax rates.
A discriminatory fee structure based on the capacity of students to pay, reduction of subsidies to higher education, larger allocation to elementary education in preference to higher education, the establishment of Industrial Technical Institutes in more than one district town and increased allocation to education out of the plan funds to 6% of GNP and even beyond would suggest themselves as the logical steps.
The food for work programme guaranteeing job for 100 days to one person in every family in designated backward districts though laudable as a measure of immediate relief cannot provide a lasting solution for deliverance from poverty. Increasing the coverage to more districts can at best serve as an electoral ploy and is no substitute for affordable education that would give a skill for the poor children. This education with a slant towards vocational skill should enjoy the highest priority over all other expenditure. This alone would drive poverty permanently away from the poor. No amount of sacrifice by the country is too much for achieving this goal.