The Food Security Bill is an ideal example of a movement towards a socialist outlook of handouts. It is the easiest thing to do that can make a "bad economy leading to a poor election outlook" into a "good election outlook". And precisely the definition of a poorly strategized goal for inclusive growth.
Inclusive Growth is not about taking money from the rich and giving it to the poor. At least not after Sherwood Forests lost Robin Hood and got converted to a National Park! Because, the idea of forcing the rich to feed the poor leads to two outcomes - the rich start to look for ways to avoid paying and the poor get used to handouts leading to general lack of initiative. Sure, when the poor make the largest part of the voter bank, it makes for good election strategy in the short term. But, in the long terms it just leads to the country getting poorer as a whole and more people getting poorer over time - backed by social security, it's easier to be without an income, isn't it.
Let's look at one of the most mature Social Security systems in the world - the United States. In 2011 the projected benefit payments were $738 billion, while projected income from Social Security taxes are $693 billion, creating a deficit of $45 billion. And, one census report published in NY Times said that the year say percentage of Americans living below the poverty line last year, 15.1 percent, was the highest level since 1993. It is a self-sustaining downward spiral. Handouts create deficit. Taxpayers (the big ones) pay out the deficit by reducing cost (one of the quickest measures is by reducing labor cost) thus adding more people eligible for handouts. And the deficit increases therefore increasing the tax burden.
The Congress leadership is threatening to go down the Ordinance route if the opposition does not allow passage of the bill. Politically, facing an election campaign, it is a Win-Win for Congress, looking good whichever way this goes. But, inadvertently as it may be, for the first time possibly, the great Indian Parliament is doing something good.
The solution is not handouts therefore. It is the ability to create opportunity for success and enterprise, and in turn generate profitable employment. Handouts like the food security bill only add to bureaucracy and generate the bad kind of employment – the kind that only adds to cost without any meaningful returns. If I am lazy and am rewarded for being lazy, I would rather be lazy than proactive, enterprising and hard working.
Inclusive Growth is not about taking money from the rich and giving it to the poor. At least not after Sherwood Forests lost Robin Hood and got converted to a National Park! Because, the idea of forcing the rich to feed the poor leads to two outcomes - the rich start to look for ways to avoid paying and the poor get used to handouts leading to general lack of initiative. Sure, when the poor make the largest part of the voter bank, it makes for good election strategy in the short term. But, in the long terms it just leads to the country getting poorer as a whole and more people getting poorer over time - backed by social security, it's easier to be without an income, isn't it.
Let's look at one of the most mature Social Security systems in the world - the United States. In 2011 the projected benefit payments were $738 billion, while projected income from Social Security taxes are $693 billion, creating a deficit of $45 billion. And, one census report published in NY Times said that the year say percentage of Americans living below the poverty line last year, 15.1 percent, was the highest level since 1993. It is a self-sustaining downward spiral. Handouts create deficit. Taxpayers (the big ones) pay out the deficit by reducing cost (one of the quickest measures is by reducing labor cost) thus adding more people eligible for handouts. And the deficit increases therefore increasing the tax burden.
The Congress leadership is threatening to go down the Ordinance route if the opposition does not allow passage of the bill. Politically, facing an election campaign, it is a Win-Win for Congress, looking good whichever way this goes. But, inadvertently as it may be, for the first time possibly, the great Indian Parliament is doing something good.
The solution is not handouts therefore. It is the ability to create opportunity for success and enterprise, and in turn generate profitable employment. Handouts like the food security bill only add to bureaucracy and generate the bad kind of employment – the kind that only adds to cost without any meaningful returns. If I am lazy and am rewarded for being lazy, I would rather be lazy than proactive, enterprising and hard working.
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