How To Fix Poverty : Why Not Just Give People Money with No Strings Attached?

With Ever Increasing Unemployment Rate over the Globe and Increasing Poverty

A common question that comes in your mind when you think about Poverty and the ways to eradicate it is "why is that the Governments across the Globe Spends Heavily on Process development and Industry Development rather than just Equally distributing a part of their Revenue or from the Gross Profits and Fixing it for forever".

Let's deep dive into this in India's Context to Understand it better.

India is the 2nd most populous country in the world with nearly a fifth of the world's population.As per the latest available stats we have around 1,387,297,452 people with a unemployment Rate of around 8.8% and around 22%  people living below the poverty line.

This Question becomes more relevant in India's Context in the on-going Covid-19 Pandemic where you see pictures of workers and daily wagers suffering and dying from Hunger and having no money to even purchase essential Supplies and even after rigorous efforts and numerous Schemes from a number of years, Government still couldn't figure out a way to provide direct benefits transfers so that the people have the money and they are more empowered and they can pick and choose how they spend it.

Recently the Government has announced a 20,000 Crore Relief package for the aid of the citizens but just like all the Previous Schemes and Aids this too doesn't seem to provide direct benefits transfers. So, you must be thinking why spend so much if you can just donate and divide the Gross profits or Revenue equally among the citizens.

So, let me tell you it is not possible by any chance whatsoever.

Let's do a bid of calculation for the Intellects out there,

Let's assume distributing 1 crore to each and every citizen, the Government will require 1,387,297,452 *100,00,000 which is obviously way more than Government's Revenue for a year.

So, this is not possible practically.

Now look at the other major aspect Inflation

Hypothetically, if we were able to distribute 1 crore Rupee to each and every 

citizen, then there would be all time higher inflation leading to Economic Decline and the value of 1 crore will drop significantly similarly how the value of 1 Rupee in 1960's is roughly equivalent of having around 100 Rupee in 2020.

Value of Currency drops as inflation rise.

In the recent past, there has been a Country which has decided to distribute its Revenues among its citizens, the name is Vietnam (2007) and guess what they are still paying the price for that. they are among world's worst economies with huge debts and poor economic growth.

So, if the government decides to distribute its Revenues among the citizens, our economy would face high inflation leading us to the times of 1940's and we would face a situation something similar to what Vietnam has faced and hence Direct Monetary benefits are no solution for Poverty.

So what are your thoughts ? Do you have any comments or query ? Let me know in the comments below and I’ll be happy to help you…