Well in Kiran Kumar Reddy's area,there are more indigent people than the total population! On Wednesday,the chief minister has announced his Dasara gift for the poor: rice at Re 1 per kg for 2.26 crore below the poverty line (BPL) families. 

Given that an average family size is of 4 persons, this translates into a total population of 9.04 crore. But the Census of India in its preliminary finding pegs the present population of Andhra Pradesh at 8.46 crore. 

The tirck of hand is calculated:the move is not to empower the poor but to keep happy the vote bank and others who can support at a time when the government is under siege. Experts expect a significant part of this subsidised rice to leak out. 

"It will go into the hands of black marketeers who will make huge profits given that the price of rice in the open market is not less than Rs 20 a kilo," analysts said. "Perhaps some of them will be ruling party goons who can come in handy at the time of the next elections," averred these analysts. 

The operation will require 3.3 lakh tons of rice every month. The subsidised rice move will cost the exchequer an additional Rs 600 crore. The government is already spending Rs 2,000 crore to supply rice at Rs 2 a kilo. This scheme was started by Y S Rajasekhara Reddy during his tenure and contributed towards his winning a second term in 2009. 

"The fresh move means that the public has to bear a burden of Rs 2,600 crore to keep Kiran in his gaddi," the analysts said. The chief minister has already made provision for this money by taxing the public. GO1718 issued on September 13 raised the VAT on 3,000 goods of common use that includes salt, match box, coffee, coconut oil, tea products, flour, jaggery, drugs, medicines and silk fabric among a host of others. The VAT was increased from 4% to 5% and this will bring Rs 1,600 crore into the government's kitty in a full year. 

Technically, however, the increase in VAT need not be translated into a price increase. But in this case it will, because the goods are in the nature of essentials and therefore their demand is - to use the parlance of economists - inelastic. In such cases, the seller will pass on the burden of the extra taxes on to the consumer. 

"This is a disloyality to lure the public to shower the vote bank with goodies.In some case the people lured are the poor themselves: after all they also buy salt, match boxes and coconut oil," said Sunil Rao, an executive in a private firm. "Neither does any political party ascribe because all of them are in this game of misleading the public.

Source: TOI