Road Ahead

On the aftermath of the great earthquake, Government has decided to handout 2 lakh Rs to all those who have lost their home.  Now opposition at both left Maoist and right Kamal Thapa Group is protesting that it is not enough, meanwhile our finance minister and some prominent economist like Dr. Pyakurel and Mr. Rameshwor Devkota are saying it is too big amount that can lead to loose money resulting in inflationary pressure.  I think both sides are wrong:

i) Yes 2 Lakh Rs is not enough to build one's home. Even if they build one it will be temporary shed that will not be able to withstand another earthquake. But handing out more cash is not solution as it can't be properly tracked, might be used for gambling and alcohol consumption. Last week in Sindhupalchowk me and my friends found that out first hand as many of victims were seemingly drunk. Besides the cash can be misused and may go to hand of those who are not actual victims.

ii. As for inflationary pressure argument goes that classical scholars are babbling about won't happen because the victims are not going to spend the handout to buy luxury goods. Besides the government that earmarks fund to support various welfare scheme to bulwark it's core political base arguing this time  around against giving handout to those who actually  needs welfare is downright pathetic.

So what is the way around:

a) Instead of cash handout government should rebuild the house themselves. In every wards of VDC the cheaper and earthquake tolerant house should be constructed with proper sanitation using environment friendly indigenous resources. Certainly the amount required will shoot above 2 lakh  but this will ensure that cash won't be misused.  Further this won't lead to inflation as it will be counted as government spending.

b) For the farmers who have lost their livestock a cheaper loan at zero interest should be provided.

c) An independent audit firm like big four should audit all spending to make sure that funds is not misappropriated.

 The path to rebuilding and rehabilitation is  long and weary but can be achieved only with sound strategy and not populist knee-jerk reaction. There is no way to recompense the loss but the steps henceforth should be judicial, equitable and humane.