Financial Chronicle further extrapolated the Bloomberg data above to figure out how India’s richest individual Mukesh Ambani, with a personal fortune of $22 billion, could actually help India’s poor. Here’s our take: Based on the Tendulkar committee report on calculating the poverty line, 269.3 million Indians lived below the poverty line as of 2011.
Of this, 52.8 million poor lived in cities and 216.5 million in villages. The poverty line for villagers is Rs 816 or $12.38 per person per month, whereas for city dwellers it is Rs 1,000 or $15.17 per person per month. To lift the entire population living below the poverty line above the threshold should cost $3.47 billion per month, of which, it would cost $804 million per month for 52.8 million urban poor and another $2,674 million per month for 216.5 million poor in the villages.
Should Ambani choose to splurge his wealth on India’s poor, he could foot the huge bill of $3.47 billion per month for a little over six months. Alternately, he can also redistribute his wealth in a one-time act of charity among all those living below the poverty line at $82 per person (against $59 per person as per Bloomberg estimate of 30 per cent of India’s 1.25 billion people as being poor).
Ambani can also be generous in providing employment to our needy villagers. Last year, 40 million families availed of government-funded work under the MG National Rural Employment Guarantee Act (MGNREGA) for an average of 40 days, earning an average wage of Rs 140 per day or a little over $2. At that rate, 40 million families would have been paid $80 million per day. If Ambani were to employ all these families for those 40 days of work, he would be spending $3.2 billion. At this rate, he could sustain their employment for at least seven years, if there was no change in his personal fortune. However, should Ambani decide to provide them a minimum guaranteed employment for 100 days as provided under MGNREGA, he would end up spending $8 billion a year, which would still hold good for less than three years.
Ambani would be extremely large-hearted to splash his entire fortune on India’s poor. After all, the government with all its resources has sustained the MGNREGA for only 10 years now, and that too on declining budgets.
