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Ending Indian poverty makes sense economically, just not politically

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Call it competitive populism. As the campaigning gains pace ahead of an Indian general election that must be held by mid-May, the governing BJP of Prime Minister Narendra Modi and the opposition Congress party are locked in an epic struggle to win over voters.

In recent weeks, each has rolled out plans to ramp up public welfare spending on the country’s rural poor. But while some of these are simply the same old failed policies warmed up and worked over, others are remarkably innovative – and make sound economic sense.

In its interim budget earlier this month, the government laid out plans that would imply a 13 per cent increase in spending this year. Much of that increase consisted of proposed cash handouts and debt forgiveness intended to relieve the financial pressure on India’s hard-pressed farmers, and – naturally – to win the BJP votes in the countryside.

But the government’s budget looked stale and unimaginative next to proposals from Congress leader Rahul Gandhi, who promised nothing less than to end hunger and poverty by introducing a government-funded universal basic income for the country’s rural poor.

The problem India’s politicians face is that two-thirds of the country’s voters – and of its electorate – live in the countryside, where incomes are not only half those in its cities, they are far more precarious. In a lean year with a poor monsoon, crops fail and farmers’ incomes suffer. In a fat year with a good monsoon, the superabundance of crops hammers prices – and farmers’ incomes suffer. And when farmers’ incomes suffer, the........

© South China Morning Post