Poverty Alleviation

at

Compounding Speed

A K Somasekhar

Notion Press

5 Muthu Kalathy Street, Triplicane,

Chennai - 600 005

First Published by Notion Press 2014

Copyright © A K Somasekhar 2014

All Rights Reserved.

ISBN: 978-93-84878-07-8

This book has been published in good faith that the work of the author is original. All efforts have been taken to make the material error-free. However, the author and the publisher disclaim the responsibility.

No part of this book may be used, reproduced in any manner whatsoever without written permission from the author, except in the case of brief quotations embodied in critical articles and reviews.

To My Mother A. Hymavathi

God sent her for shaping me suitable to make the country a better place to live in. I do not know why she has left for heavens with the job unfinished. God must have more important job for her in store.

People cannot come out of poverty unless they change their attitude and behaviour. People change, only when their eyes are filled with dreams and they believe that the change shall help realize their dreams.

A.K.Somasekhar

The views expressed in this book are my own and not that of the government.

A.K.Somasekhar

aksomasekhar@gmail.com

Preface

This book is to suggest a scheme named Social Network Marketing, preferably operated by government, to improve constructive behavior among the poor by incentivizing promoters of constructive behavior in a multilevel marketing model.

Chapter I searches for the missing ingredient for quick poverty alleviation. This chapter will answer why social indicators are still unacceptably low in the country, despite large public spending.

Chapter II describes how Social Network Marketing is operated. It clarifies one basic doubt about the legitimacy of the multilevel marketing model and lists the advantages of the multilevel marketing model in involving the same poor in poverty alleviation.

Chapter III tries to identify some of the welfare activities essential for poverty alleviation and whose outcome can be incentivized with a minimum scope for fraud.

Chapter IV throws light on some thoughts on how Social Network Marketing helps in quick poverty alleviation

Chapter V concludes the book with an optimistic note to eliminate abject poverty within a short span of five to ten years.

A Reaction From An

18 Year Old Girl

All of us, we know for sure,

So much poverty we can’t ignore!

We want to help, so we decide to preach,

There are so many obstacles, the sound does not reach.

Can we ever make them hear, can we ever make them aware?

Can we teach them to change their behaviour-

To wash hands & stay healthy,

To go to school & become wealthy?

Now here’s an idea that guarantees improvement.

Join us, let’s make it a ‘people’s movement’!

The poor will dream of becoming rich,

Even if they didn’t study much.

We have resources, otherwise being wasted.

A network shall be constructed

to use them and some ‘time’ valuable

And ‘heal’ the people from the poverty cycle.

Want to know? Read on....this book explains it all...

Come on, let’s make a nudging call!

- Kavya

Acknowledgements

I acknowledge the encouragement and support from Shri Vivek Dhand, Chief Secretary of Chhattisgarh, in shaping this work to its present form. I am very thankful to Shri Aman Kumar Singh, Principal Secretary to Hon’ble Chief Minister of Chhattisgarh for his words The idea is worth experimenting. We should do a pilot which boosted my confidence. I am thankful to Shri. Rajat Kumar, Director Public Relations. He has been instrumental in deciding to publish this book.

I want to place on record the positive nature of Shri. M. K. Mishra, SIO, NIC, Chhattisgarh who has always given us a great freedom to work on our ideas. I thank Muralidhar for helping me in the manuscript preparation, my brother Anand and friend Y.V.S Rao for their part in editing the content.

I appreciate the contribution of my daughter Kavya, the first reader and editor of the book. I admit that the time I spent writing this book belonged to my wife Radha without whose cooperation this book would have been a distant dream.

I thank all the friends and family members who have either been patient through my presentations on the concept of the book or read the review copy of the book. Their valuable suggestions and criticism have certainly helped enrich the content.

I am impressed with the work of ‘Notion Press’ in bringing out the book so nicely.

- A. K. Somasekhar

Contents

Title

Copyright

Dedication

Preface

A Reaction From An 18 Year Old Girl

Acknowledgements

1. Searching For The Missing Ingredient For Quick Poverty Alleviation

2. Social Network Marketing (SNM)

3. Welfare Activities In SNM

4. SNM—A Few Thoughts

5. Conclusion

References

Chapter I

Searching For The Missing Ingredient For Quick Poverty Alleviation

The economic reforms initiated in 1991 have indeed accelerated economic growth in the country. Liberalization has opened up many opportunities for individuals to grow and prosper. Many people, especially those belonging to the Indian middle class, are availing themselves of the opportunities and leading a prosperous and comfortable life, which they could not even have dreamt of in the ’70s and ’80s. This growth has made the government economically stronger and has enabled larger spending on welfare activities such as Public Distribution System (PDS), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), health insurance etc., in addition to the increased public spending on education and health care.

In spite of high growth in GDP in the last two decades, ¹more than 60% of the people still live on an income of 2 dollars a day and are not able to take advantage of economic liberalization (I am referring to these people as poor in this book). Despite the large government spending on education and health, the social indicators in the country are very poor. It was a news to me when² I read in the book An Uncertain Glory – India and its Contradictions by Jean Dreze and Amartya Sen, which states, 20 years ago, India generally had the second best social indicators among the six South Asian countries (India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan), it now looks second worst (ahead only of problem-ridden Pakistan). India has been climbing up the ladder of per capita income while slipping down the scope of social indicators.

³ The Table below (adopted from the above mentioned book) also shows that even when compared to the 16 poorest countries of the world, other than the sub-Saharan countries, India lies low in terms of various social indicators.

Table 1.0

Of course, economists like Jagdish Bhagawati and Arvind Panagariya show that there has been an improvement in the status of the poor and their social indicators along with economic growth due to liberalization. Even though there has been some improvement in social indicators in the last two decades, it is neither proportional to the money being spent by the government on welfare activities nor acceptable to the ‘civic society’. It adds to our disappointment when we learn that although the solutions to most of the problems faced by the poor are quite simple and cost effective, they are not being adopted by the poor, even though some are very well within their reach.

Over one hundred thousand children under the age of 11 months die of diarrhoea every year in India; this could be avoided if people just washed their hands before eating and mothers chlorinated the drinking water. Diarrhoea deaths can be avoided by using cheap packets of ORS, which are available everywhere and cost very little. ⁴ In India, according to UNICEF, only one third of children who had diarrhoea were given ORS. Similarly, millions of people suffer from malaria in the country every year, which could be avoided if everyone slept under a mosquito net (which are supposed to be given free of cost by the government to all the needy), and kept their surroundings neat and clean.

Infants’ health would improve if they were breast fed by their mothers for at least six months, as recommended by WHO. ⁵ Breast feeding, for example, costs nothing. And yet fewer than 40% of world infants are breast fed exclusively for six months, as recommended by WHO, comment Abhijit V Banerjee and Easther Duflo in their book Poor Economics. Even when government hospitals offer free institutional deliveries and family planning operations, hundred percent deliveries are not taking place in the hospitals and the poor are not adopting small family norms, in spite of the incentives offered.

If every child birth takes place in a hospital and every infant is breastfed for six months wherever possible, if every household uses chlorinated water for drinking and everyone washes their hands before eating and after defecation, if everyone sleeps under a mosquito net, uses condoms, ORS, de-worming tablets etc. as needed, if everyone can take advantage of government schemes for which they are eligible and if the poor spend their surplus money on education, health and nutritious food instead of alcohol, tobacco and/or festivals, poverty shall disappear in no time.

The above statement does not really show the full picture. It may even suggest that I am saying that every other thing is right and it is only the poor who are not using existing infrastructure and resources available to them. Please, do not mistake what I am saying. I know that there are problems and lacunae in every other side. Public spending on health and education is not sufficient. It should be increased. Whatever is being spent by government is not fully reaching the poor due to omni-present corruption and negligence. Many government schools and hospitals are not able to deliver quality service. A major percentage of government teachers, doctors and other government employees are not doing their duties with accountability towards people. All these above problems are to be addressed. People are trying to address these problems by enacting laws, by using technology, by triggering people’s movements etc. These efforts are welcome and to be encouraged. Nevertheless, the small percentage of government services that are actually reaching the poor are also not being utilized by many of the poor due to different behavioral problems, due to lack of awareness and voice to fight for their rights. This book is intended to suggest that the same poor should be made responsible and instrumental in eliminating poverty. This book proposes a solution to make the desired changes happen at a compounding speed, with the involvement of the same poor by incentivizing them in a different model.

Before we proceed further with the solution, let us try to consolidate our knowledge to answer the question Why are the poor poor and why do they continue to be poor? If we try to categorize our knowledge to answer the above question we can identify five reasons, as discussed below, which are responsible for making people poor and