In his landmark book, “Fortune at the bottom of the Pyramid”, noted writer, the late C K Prahlad, had talked about how the poorest of the poor could emerge as a potent market in the future. The Union Budget 2017-18 surely seems to have taken a cue from Prahlad’s book. The bottom of the pyramid had generally been subject to some macro level allocations with little focus on whether the trickle-down impact actually worked. This Union Budget 2017-18 has not only identified the bottom of the pyramid as a distinct constituency but has also ensured that the effort goes beyond allocations and focuses on the trickle-down effect too…
How this Union Budget addresses the Bottom of the Pyramid?
- Purchasing power and incomes are largely driven by the availability of opportunities. It has been observed that ensuring employment opportunities for women in rural areas has a much better scope for enhancing rural incomes as the impact on household health, sanitation and nutrition is immediate. It is on these lines that the Mahila Shakti Kendra will be set up under the various Anganwadi centres in rural areas. These centres will help rural women with skill development, employment and digital literacy. Women with the skills will also be provided the knowhow and funding to translate these learnings into employing themselves and also creating jobs in rural areas. At the bottom of the pyramid, this could be a major force multiplier.
- One of the major reasons for poor health and high death rates among children in India is the low quality of pre-natal and post-natal care. Continuing with the announcement made by the PM, the budget has announced the direct transfer of Rs.6000 to every underprivileged woman for her delivery at an institutional facility. This will also force the mother to vaccinate the child to give them immunity from a variety of diseases. With the millions of Jan Dhan accounts and financial inclusion focus, the money can be directly transferred to the woman to avoid any spillage and misuse.
- A boost to the bottom of the pyramid means a boost to affordable housing. The government has given infrastructure status for affordable housing, especially in rural areas. This will invite a lot of institutional participation in the process of affordable housing as the economics will be a lot more favourable. The National Housing Bank will also refinance loans to affordable houses up to a total of Rs.20,000 crore which will enhance participation of banks and financial institutions. This will go a long way in putting greater social security and wealth in the hands of the underprivileged population.
- When it comes to rural health, apart from pre-natal and post-natal deaths, the other big risk is communicable diseases. In fact, the impact of these contagious diseases is highest in rural areas as the level of immunity and awareness of vaccination is the lowest in such areas. The Union Budget has set an ambitious target to eliminate Filariasis by 2017, leprosy by 2018, measles by 2020 and Tuberculosis by 2025. All these diseases take a severe toll among the underprivileged sections of society and this can make a big difference to productivity and incomes.
- The Union Budget has also set in motion a series of amendments to the Drugs and Cosmetics Rules so that important and life-saving drugs in their generic form are made available at regulated rates to the less privileged sections of society. The benefits of advances in medical research have not really percolated to the bottom of the pyramid and that could be the key differentiator in making them more productive.
- Labour reforms have been a contentious issue for a long time. But these labour reforms are long overdue for balancing two forces. On the one hand businesses need to feel confident to set up industries and create employment opportunities in such areas. Secondly, it needs to be ensured that the interests of the less privileged sections are adequately protected by the government as they have much lesser bargaining power. The Union Budget has proposed to simplify and amalgamate labour laws under one of the following 4 codes viz. Wages, Industrial Relations, Social Security and Safety. This will go a long way in simplifying the relationship and balance the interests of industry and labour.
The reforms for the bottom of the pyramid have been undertaken with 3 themes in mind. Firstly, the focus has been as much on the conception as on the implementation. Secondly, the Union Budget has not made any trickle-down assumption and hence addressed micro issues like use of Anganwadis, SHGs etc. Lastly, the big focus of this Union Budget has been on health as that forms the core of productivity among the underprivileged sections. To put it succinctly, the Union Budget has made a big attempt to give a basic boost to the large masses at the bottom of the pyramid. The start is surely promising!