CNN Hero Of The Year

I read this story http://timesofindia.indiatimes.com/world/indians-abroad/CNN-picks-up-Indian-chef-for-its-Hero-of-the-Year-award-/articleshow/6833917.cms. That brought to me a discussion that I had with centering on the poverty in India. About 42% of India's population lives below the poverty line. Poverty line being defined as an income of USD 1.25 per person per day. Other estimates for this range from 25% up to 42% (as per the Wiki entry below).

If we take 42% as the percentage of Indians living below the poverty line, about 462 million Indians are really poor. This percentage used to be 60% about 30 years back http://en.wikipedia.org/wiki/Poverty_in_India. With rising prosperity this percentage is dropping while in sheer numbers the volume is huge; almost equal to half of the population of Europe. The good news is that the percentage is decreasing. The bad news is that in terms of numbers, it could be increasing. 

These poor people would never have attended school. They become maids or servants in houses or employed as casual laborer (or perhaps become terrorists).   Some emigrate to the Middle East or Singapore. And then they get married. Their children are sent to school. Their children would have a better life than they had. But it takes one generation or 30 years before that family comes out of poverty. 

How long would it take to lift 462 million people from poverty? 

Let's define the problem. Our Goal: We do not want to have anyone living below the poverty line in 30 years. What do we need to do for a minimum period of time so that people can afford at least a minimum standard of living? 

Constraint: I don't like the idea of providing free food / clothes / roof / employment perennially to anyone.

There are multiple approaches I see some or all of which could be employed:

Approach No1:

Let's say, we would start with the people living below the poverty line (the 42% of India's 1.1billion population): Starting with that as the base (taking the total poor people as 100%), let's see what the distribution of that population would be across various age groups.

Age                     % of   No. of persons   Cost                        Action

      Population              (USD/person/Year)

Less than 18           30%   138,600,000    300       Provide 2 meals a day and education  

30-49                     30%   138,600,000       0       Corporates train them, later  employ them 

40-59                  30%   138,600,000      0       Corporates train them, later  employ them   

Greater than 60    10%   46,200,000   200       Provide 1 meal a day and shelter.

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Total cost comes to about $50 billion per year. Now can we create an economy around this. Where is this $50b spent? Towards food, transport, labor, buildings, salaries (for teachers) etc. Can the poor themselves partially provide this? Can they be employed at nominal salary and provide at least some of these services?

Approach No 2:

Make sure that there is no addition to this population. Addition could be due to childbirth in a poor family or by a person who was not earlier poor now joining the ranks. Personally I do not like the idea of childbirth adding to this population who unfortunately are not in a position to manage their affairs. Keeping a tight control on the number should reduce the numbers (and definitely the percentage) of poor people over time.

Approach No 3.

Can we identify areas where manual labor is a better alternative?  Can we provide incentives to and encourage individuals and corporates to employ poor people? 

Approach No 4.

Look at the issue from the point of view of the poor. What do they want (apart from free food etc). What are they willing to do in exchange for food?

Are there any other thoughts? More importantly would these have a negative effect on the growth story that India has? 

Would India be a better place in the year 2040 than it is now?

Relevant reading material: http://blogs.wsj.com/indiarealtime/2010/11/01/e-payments-could-save-india-23-billion-a-year/