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Re: Solution to Poverty in India



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Sanjeev,

Although your proposal is well intentioned, I think you underestimate 
Government of India’s own financial problems, that prevents it from 
seriously pursuing poverty alleviation programs such as yours.

The money losing PSU’s, bloated bureaucracy, and high levels of defense 
spending are the primary millstones around the Government of India’s neck 
that are responsible for its ongoing fiscal deficit.  In short, the central 
and state governments must put their own fiscal house in order first.

A better approach is to link wealth re-distribution (poverty alleviation) 
programs with the engines of wealth creation.  In India’s case, the primary 
engine of wealth creation over the next several decades will be the software 
industry.  I would suggest a creating a  “Partnership for Prosperity” 
between software companies, the Government and NGO’s for funding and 
implementing poverty alleviation programs.  After all, it is in the software 
industry’s self interest to do so as its’s primary input is human capital.

India’s Software and Services exports are estimated to grow from $1 billion 
in 1996 to $10 billion in 2002, $50 billion by 2008, $100 billion by 2010 
and a phenomenal $1 Trillion by 2030!

We should work with NASSCOM, the apex body of all Indian software and 
service companies (rather than the Planning Commission) to evolve a Social 
Charter for its member companies, that would stipulate that each company 
allocate a portion of its export revenues towards a poverty alleviation 
program.  Even if only 1 percent of export revenues were allocated, that 
would still be US $ 1 billion in 2010.

One of the most successful programs in alleviating poverty is the Grameen 
Bank in Bangladesh.  I would like to see a  “Swadeshi Bank” established in 
India, along the lines of the Grameen Bank, to provide the rural masses of 
India with capital for starting grass roots enterprises.  If the software 
companies prove averse to sharing wealth, we should press the Government of 
India to impose a nominal tax (i.e. 2%) on software exports for the purpose 
of funding poverty alleviation programs.  What do you think?

Raju Agarwal




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