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  • Category: Miscellaneous

    Why the trickle down theory does not work too well

    There is this famous theory of economic benefits reaching everyone. It is called the trickle-down theory. It is very simple. If the rich and the middle-class keep buying a huge range of foods and services, everyone gets the benefit. For example, we have huge flats and apartments owned by people who are well-off. Technical and non-technical people like the welders, plumbers, electricians etc find some work in such apartments as something or the other needs to be fixed almost daily. The servant maids also find work there.

    But the precise problem is that they have no such benefits like PF or Gratuity and find it difficult to avail of loans also. The trickle-down theory creates lower-level jobs but no job security. We need schemes where the poor can also own a house however small that may be and have a better life. We have such a long way to go.
  • #733685
    I think the author is wearing blinkers and bridle and not looking around to know what is happening. Thepoor Indians are getting their shelter at a very low cost. Homeless people are getting their homes through PMs housing schemes. In villages, almost every poor is owning a house. I have seen many small houses constructed around the apartments. Housing in India is improving, and is expected to improve further.
    No life without Sun

  • #733688
    According to the trickle-down theory, when more and more money adds to the country's economy, then that money will automatically reach to the poor people, but this theory could not fulfill its purpose. If we also look at the principle, we will also find that money is coming to the rich, but after filtering it is not able to reach the poor class. Different theories have been brought from time to time by different economists of the world, whose main aim is to bring economic equality in society, but many such theories are not applied properly.

  • #733690
    Let us see around in villages of various states we see many people who are not even having food to eat. The author is talking about PF and Gratuity. But these village people don't even have any food to eat. They don't even have a way to earn. So these people who are able to get some income are very fortunate. At least they are able to have some food for today.
    In cities, these technicians who attend small jobs in the houses are in very big demand. They charge very heavily and the users are not having any say in that. If the customers ask for a reduction, next time when they call him, he will not come for attending the work. If they have some thinking about their future they themselves can go for a PPF account and keep some money in that. It all depends on the individual's thinking and the urge for saving for the future.

    always confident

  • #733708
    Trickle-down theory is suitable for rich industrialist/businessmen only. According to this theory, governments bring some schemes for rich groups and it is claimed that poor people are also benefited from these schemes. But the reality is otherwise. A few years ago IMF got it researched in 150 countries which concluded that it is not useful for the lower class and poor people.
    The author has positive views about trickle-down theory and he assumes that lower class. people be benefitted from it.

    @SuN: Indeed, the government brings good schemes for financially weaker and backward sections but the reality is that poor and eligible people are deprived of these schemes and other people who don't deserve are benefited from these schemes.

  • #733754
    It is true that the benefits will not reach to the poor as envisaged but slowly the things are improving and many Govt policies are going to improve the conditions of the poor. It is also true that more efforts are needed in this direction and just believing in the trickle down theory is not going to do any magic in changing the situation of the poor people in this country. We have a very huge population and covering all the poor people under some social benefit umbrella is a herculean task but if the Govt wants to do it sincerely and people of this country and opposition parties cooperate in that, it is very much possible to do that. Unfortunately we are having much corruption in our system and Govt policies are actually not reaching the deserving beneficiaries the way they were intended to be.
    Knowledge is power.

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