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| Insure health of BPL section | | |
Mohandas Pai
The defining challenge for India today is ensuring that 70 crore of our fellow citizens, who have not benefited from the liberalisation process, participate in India’s growth. Of the 70 crore, 35 crores are officially classified as part of the BPL (below poverty line) category. India has seen rapid economic growth since 1991, changing the lives of over 35 crore people who had the education and skill to benefit from a growing economy. We now need a decisive plan of action to empower the remaining 70 crore to participate in this growth.
The challenge essentially is of the lack of purchasing power of the 35 crore people below the poverty line. We need to reorient our policies from subsidies and state support to one of direct income transfer (DIT) for the BPL section. We spend about Rs 50,000 crores on food subsidy annually, Rs 20,000 crores on rural employment schemes (REGP) and about Rs 25,000 crores on kerosene and power for the BPL section, which amounts to a total of Rs 95,000 crores. Much of this is lost during transmission and this section of society remains at the mercy of middlemen and apathetic government machinery. Assuming five people to a family, 35 crore people of the BPL section would consist of seven crore families. If the woman of a family were given a DIT of Rs 1,000 per month by electronic transfer, it would cost the government just about Rs 84,000 crores a year but would vastly increase the purchasing power of 35 crore people. This would enhance their financial security, nutrition and enable them to educate their children. It would also enable them to choose where to spend money, rather than compelling them to avail subsidies which they may not need.
Some studies show that 40 per cent of the people in the BPL section have slipped into poverty because of large spending on health due to malnutrition and illness. India needs a health insurance programme which would give the BPL section access to health services of their choice. It is possible today to have a health insurance of Rs 1 lakh for a family of five for just Rs 700 per year, with a pool for major illness. Covering the entire BPL sector would cost just Rs 4,900 crores. This would qualitatively enhance access to health, create large-scale capacity across the country and a competitive environment, thus empowering families to seek the best healthcare as they would have the ability to pay for them directly rather than depend on indifferent public services.
The third area that requires change is tackling the problem of employability. For the last five years India has seen large-scale job generation accompanied by a growing shortage of skills due to a mismatch between jobs and skill creation. Not only has India faced a shortage of doctors, engineers and medical professionals, but a larger shortage of drivers, plumbers, masons, foremen and electricians who are needed for a rapidly growing economy. This has increased labour costs and reduced competitiveness. We need a large-scale programme in skill development funded by the government and executed through the private sector or through public-private partnerships. Skill development, along with a rapidly growing higher education sector, would create large-scale employability, improve productivity and considerably enhance the income of a very large section of society.
These three areas, if focused on, would transform India, creating a more egalitarian nation. They do not call for more resources than we have, but for structural reforms and greater efficiency. India can afford to do this today and needs to do it.
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