Pro-Poor Budget

There is nothing more unequal than treating unequal people equally. Pro-poor budget have a clear bias towards the poor, in the sense that it work seeks to benefit the marginalized, rather than better-off sectors of the society. As such, there is often a commonly endorsed reference to pro-poor budgeting.

Raising pro-poor budget requires a strategy that is deliberately biased in favor of the poor so that the poor benefit proportionally more than the affluent.

Pro-poor budget wades into the needs of the poor. It looks for making a difference in the lives of the poor. It wedges in ex cathedra on the poor empowering them to have a hand in full tilt and to do them a wealth of good from the process of development. Pro-poor budget facilitates the poor to have enlarged opportunities for changing into healthy, educated, productive and shouldering responsibility. A pro-poor budget has a thought through partiality in favour of the poor so that he avails each to each more from government expenditure than the affluent.

The first and foremost move in getting through a pro-poor budget is the earmarking who the poor are. Understanding and measurement of poverty has evolved over time. It is now by and large recognized that poverty is not just a money related deprivation. It is an amalgamation of diverse losses of rights borrowing from the deficient welfare. Through thick and thin, budget must acknowledge to such structure of poverty. Through and through this exercise is indeed labyrinthine. That’s like pulling teeth. In crafting a pro-poor budget requires latest data about the degrees, magnitude and kinds of deprivations that make up poverty.

Owing to both practical and strategic reasons, it is important to establish a conceptual linkage between gender and poverty for promoting gender-sensitive budgets. It would be a mistake to simply equate the two categories. Gender imbalances and inequalities should run across every social, economic and political classification. The exclusion and deprivation experienced by the poor is not the same, and tends to be even more acute for women than for men. Gender allows us to stop envisioning the poor as a homogeneous category of people, whose needs can be addressed with the same recipe.

Pro-poor growth should direct resources disproportionately to the sectors in which the poor work (e.g. agriculture), areas in which they live (underdeveloped regions), factors of production which they posses (such as unskilled labor), outputs, which they consume (such as food), translated into strategy of pro-poor growth - employment generation combined with price stability of goods and services which are essential items. Policies need to be designed to reflect concerns of poverty.

In order to address poverty effectively the budget will need to have more direct rather than indirect means of taxation. This would help reduce prevailing high-income inequalities and help spread the benefits of economic growth.

Pro-poor budget means that the poor benefit disproportionately from economic growth. This is to say the proportional income growth (rate) of the poor must exceed the average income growth rate. The per-capita income growth rate of the poor must exceed growth rate.

This spurs three crystal clear policy messages. First, policies to promote growth should help the poor although they could do so more if they made growth pro-poor rather than neutral as it currently is. Second, reducing initial inequality, particularly asset inequality, should receive highest priority, due to its triple effect on poverty. Third, reducing gender inequality should equally be of highest concern to policy makers that want to achieve pro-poor growth.

It is clear that pro-poor growth that directly reduces poverty must be in sectors where the poor are and use the factors of production they possess. The vast majority of the poor is in rural areas, a majority depends directly or indirectly on agriculture for their livelihood, and the factor of production the poor possess and use most is labor, sometimes land, and even more rarely human capital. Thus pro-poor growth must be focused on rural areas, improve incomes and productivity in agriculture, and must make intensive use of labor. These things are nearly tautological, but often forgotten and are clearly not reflected in public policies or in the allocation of public funds by national governments or donors.

Heavy investment in the human capital of the poor will yield two benefits on poverty reduction. It will increase economic growth and it will make growth more pro-poor. The record of East Asia is a good illustration where high human capital accumulation promoted growth and poverty reduction.

Beyond a concern for increasing average incomes and reducing poverty, there is a greater appreciation for a need to enhance the security for the population if one is to ensure sustainable pro-poor growth. The security of the poor is threatened by physical threats. Thus, the poor are forced to avoid risks that may carry high rewards, can get trapped in cycles of poverty and insecurity, and are regularly pummeled by shocks that militate against sustainable reductions in poverty.

A pro-poor orientation to both the analytical framework and the policy-making processes desperately needs to put into practice. This entails significant governance innovations to guarantee, among others, peoples’ participation in the decision-making processes of the government, as a norm. The direct engagement between the citizens and the government through a process of engaged governance has the potential to achieve the objectives of good governance including bringing people to the government and government to the people.

The budget-makers need to remember that real enemy is poverty and deprivation, that their key weapon is their skill and professionalism and that their modus operandi is their humility. They are the custodians of a value system that defines the objective as demonstrating every single day that they are a caring democracy.

Attaining a pro-poor budget is a big challenge. It requires a bottom-up approach; that ensures that poverty eradication is a central issue and not a donor driven requirement. (www.asifjmir.com)