Quite recently, I listened to a discussion on ways and means to bring down the price of fuel. The participants (politicians, journalists, administrators, opinion leaders and a hunger striker) were unanimous about:
•the reduction of taxes on fuel;
•the need to abandon universal food and gas subsidy;
•the introduction of means test.
A means test is a determination of whether an individual or family is eligible for government assistance or welfare, based upon whether the individual or family possesses the means to do without that help (https://en.wikipedia.org/wiki/Means_test). The participants expressed their sympathy for the suffering ‘tidimoun’ and their scorn for the parasitic moneyed people and tourists who eat our bread made from subsidised flour. A means test for them (they call it ‘targeting’) is the magic formula to bring justice and raise the standard of living.
In concrete terms, what does it mean? A person or family with income X has the right to subsidised rice, flour, cooking gas etc. and if their income is X+1, they lose that right. This was proudly announced and applauded.
Let’s see what happens in practice. Say, a government run by our famous outspoken participants decides that a family of four with an income of Rs.25,000 or less will benefit from all subsidised products. If the income of that family goes up by one rupee (Rs.25,001), it will lose the right to subsidised goods.
The wise government run by the aforementioned do-gooders may introduce a graduated system:
1.Income under Rs.25,000 leads to full entitlement;
2.Income under Rs.50,000 leads to half subsidy;
3.Income under Rs,75,000 leads to one-third subsidy;
4.Income under Rs.100,000 leads to one quarter subsidy;
5.Income over Rs.100,000 leads to zero subsidy.
How do you put this into practice?
First of all, each citizen must go about with a document which spells out his or her entitlement. Imagine the joy of your baker, shopkeeper or ‘dalpouri’ seller who has to calculate the price to be paid by each consumer depending on his or her entitlement.
How do you control that the right amount is paid to the authority which dispenses the subsidy? Do we have to put a police-officer in each shop or outlet? What guarantee do you have that a few corrupt police-officers will not use their prerogative to pocket thousands of illegal rupees?
Who will deliver the said documents? Civil servants, of course. Will not the door to corruption be wide open? The few black sheep in the civil service will see it as a godsend. Their power to ‘sell’ the right certificate to their appropriate clients will be enhanced.
How much will all this cost? Much more than the saving made to bring down the cost of fuel. But this is only part of the story. The means-test-walas, to be honest and credible, must go the whole hog and not focus on only food and cooking gas subsidy by proposing the following:
•Parents with means should not benefit from free-schooling for their offspring. Why should ‘WE’ waste our money on wealthy parents “who drive luxurious limos”? Teachers will simply have to wait for the complete collection of all school fees in order to receive their monthly salaries ‘as in the good old days’. Payment may be made on the 35th or even later.
•Only govt backbenchers and opposition MLAs who do not have any other source of income should be entitled to an allowance.
•Free universal medical care should be abolished. It should be free for only those whose income does not exceed a specified amount.
•Universal old age pension should be abolished. It should become a means-tested benefit.
SWEET EXCITING DEMAGOGY
A piecemeal approach to any problem is bound to give absurd results and open the door to demagogy of the type:
•Rich people buy sbsidised rice to feed their pets;
•Bakers use subsidised flour to make special expensive breads and thus make huge profits;
•Wealthy tourists eat our subsidised flour in the form of fancy breads and delicacies;
•Cooking gas is used for other purposes than cooking. It may be used to take a hot shower.
Just to make a case in favour of their demand for a price-reduction of fuel, the ‘means-test-walas’ are prepared to damage democracy, reduce freedom and increase the weight of bureaucracy. In short, they want to dismantle the welfare state.
Nov. 2022
DEV VIRAHSAWMY