EMPOV II Model: Basic Needs Availability and Appropriate Pricing and Income Policies for Poverty Alleviation

The objective In this paper is to obtain a relevant set of. commodity and factor prices to match the availability of basic needs with demands. The idea is that, when the basic needs are made available on a top priority basis, this new price structure, along with the larger availability of basic needs, will act as an important factor in the speedy removal of poverty.

A multi-sectoral goal programming model has been developed to obtain these commodity and factor prices simultaneously. The objective of the model is to minimise the difference between the given target consumption, and the market consumption which is determined using the income group-wise price and income elasticities. The model is solved with the data of Indian economy. Various alternative scenarios have been worked out.

One of the important ways of implementing the revised commodity and factor price structure, as suggested here, may be to constitute national and regional level 'Bureau of Incomes and Prices' involving representatives from managers, workers, bureaucrats and politicians. Similar suggestion was also made in the 'report of the study group on wages, income and prices' (23).