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The Sponge Factor - India, Proverty and Technology

By: Lalam Arvindh Kumar
Oct-08-2010
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This post is motivated by certain viewpoints prevalent in the air lately. Here are a few sentiments that are representative of the views I refer to.


A quote from a poster on popsci.com

. Personally I am one of those people who believe that India of all places should not have a space program. If there are people living on the streets of Calcutta who still require aid from other countries in Europe and elsewhere, Then now is not the time to start developing space technology.

Several critics in the British media have carried a vigorous campaign pointing out that the money should be spent on poverty as subtly put in one British media outlet.

. Critics have argued that the money would be better spent on helping those mired in chronic poverty on the ground.

Others feel that spending money on technological advances should be lower priority until poverty in India is fixed.

. Some here in India wish the world would stop focusing on the country"s poor but the sad fact remains that there are more people living in poverty in India than in all of sub-Saharan Africa.

. In this context, I think it is perfectly legitimate to question India"s spending priorities
.


Such views resonate with several commentators and readers in the west. For some, it is out of genuine concern for people still languishing under the poverty line. For others, who are used to viewing India as a 3rd world country, this is a convenient tool to embarrass the increasingly assertive nation. As India makes its way up the ladder, this free-advice will only get louder. These simplistic views also resonate with some of India"s own.


What ever be the source, this flawed narrative needs to be called on. Before I proceed, let me get something out of the way. It is outrageous that after being free of foreign rule for more than 60 years, we still haven"t lifted the masses above poverty and that is a whole different topic by itself.

Free Advice

Back to the free-advice. Does taking money from various research endeavors and throwing more and more of it on poverty solve the problem?

Let me answer that with a question of my own: Does throwing more and more food grains in a rat-infested warehouse really fill the stomachs of poor waiting at the other end of the warehouse? If it does, at what cost to those that are paying for it?

It seems that the issue is less of "insufficient government spending on welfare" and more of "the ecosystem and the mechanism administering the welfare mechanism".

Ideal World

Every governing body has a certain overhead expenditure that is essential to its functioning, like staff, office space, facilities etc. This overhead expenditure is a mandatory price and may or may not be paid with welfare funds. Either way, in an ideal world, the mandatory overhead should be the only non-welfare expense and it should ensure that almost all the money and resources are spent on the intended goal of welfare, like a funnel (click for image).

Reality Check

In reality however, the whole administration from top to bottom is mostly focused on enriching itself. Instead of effectively administering the budget allocations to uplift the poor, the welfare mechanism and ecosystem has grown into a gigantic sponge sucking up all the resources passing through it. Hence the term "The Sponge Effect."

However, the simple analogy breaks down a little. A sponge, no matter how large, at some point gets saturated and cannot absorb any more liquids. But our conceptual sponge has no such physical bounds. The more it absorbs, the more it grows and the hungrier it gets. It has an endless appetite. It"s a living wild sponge that spreads like cancer and defies all logic, with contribution from each and every one of us. ( Click for image, Sponge Effect)

The Sponge Factor

To extend this further, there needs to be a way to measure the "sucking" capacity of the system, aka, the sponge. Let"s call this "The Sponge Factor". Consider a hypothetical government allocation of 100 Crores meant for food subsidy. If 20 Crores is the actual worth of the goods and services needed for the welfare program, then it would mean that 80 Crores was sucked up by the distribution system itself. That would be a sponge factor of 80. Any distribution system will need to be maintained at an expense, so a zero Sponge Factor is impossible. But, what is a healthy Sponge Factor? How much of it is necessary and how much of it is negligence and corruption?

While this needs a deeper analysis, for the sake of this article, let"s assume a Sponge Factor of 50, which is conservative in the view of the author. So, when one hears a statement that Government is allocating Rs.10,000 Crores towards a welfare program, what it possibly mean is "Government is feeding Rs. 5,000 Crores to the Sponge. Long live the sponge."

Nothing in the article can be considered novel, with the exception of possibly the analogy itself. Not only have we been surrounded by this sponge all our life, we have actually contributed to its growth and even became part of it when convenient, directly or indirectly. Even though we stare into this living sponge everyday, we are buried too deep in it to acknowledge it as the real problem. Disregarding the sponge that is sucking up all the resources may seem practical on the face of it, but it spells disaster when one starts throwing money at it in desperation.

So dear readers, is spending more and more money on welfare the real solution to poverty in India? Think hard before you answer, the sponge is listening and salivating!


Lalam Arvindh Kumar

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