Address economic distress with structural reforms and not doles

Cash transfers may offer short-term relief but raising worker incomes is the only lasting solution

- HIMANSHU

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• A pre-budget plea made by an industry body for 'consumption vouchers' for the poor confirms that income distress is seen as a pressing matter with serious implications for the economy.

• But handouts will only offer temporary relief and not solve the problem. What we require is a shift in strategy to focus on increasing the incomes of workers at the lower end.

It is not common for industry bodies such as the Confederation of Indian Industry (CII) to demand that the government increase subsidies for the poor. In a note on pre-budget recommendations submitted to the finance ministry, the CII suggested the issuance of 'consumption vouchers' to poor households to boost demand in the economy. It also suggested raising wages under MGNREGA by 40% and PM-Kisan cash transfers to farmers by 33%. The larger issue is not the relevance of these suggestions—which are worth considering—but the assessment of the economy by the industry body.