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Saturday January 28, 2023

Tech-led poverty reduction

December 04, 2022

LAHORE: Prudent use of information and communication technology (ICT) could go a long way in eradicating poverty, increasing agricultural productivity besides checking bad governance and corruption that severely impact the poor.

Rural poverty is mainly due to declining or stagnant farm productivity, failure to apply proper drugs in case of pest attack, lack of awareness in farmers about weather conditions, and inability of poor farmers at the tail end to get canal water.

Our current approach in this regard is to decimate information through radio, which very few farmers carry. In India and even in many African countries, farmers get the latest information about crop, weather, and use of seed, pesticides and fertiliser through smart phones, even though smartphone penetration in African countries is lower than in rural Pakistan.

Even the illiterate can be provided updated information through an app. Small videos of the proper way of ploughing, cultivating, watering, use of fertiliser and so on, can go a long way.

It is not that our farmers are naïve, but rapid changes in seed varieties need a different approach. Moreover, cropping patterns are changing due to climate change.

Farmers must adjust the sowing time according to the changed climate pattern. Rural poverty would be adequately addressed if agriculture flourishes and the yields of our crops are in line with the global average.

In trade and industry, we need to benefit from the available technology. Installing cameras in the manufacturing facilities in a professional manner could enable the Federal Board of Revenue to monitor production remotely. It would eliminate to a large extent the menace of under reporting production.

This idea has been in the air for over a decade, but the implementation has not been carried out. Technology is a low cost solution.

This monitoring is needed at sugar mills. With proper installation of devices, the government would be able to know the exact sugar production in each mill and in the country.

Mills would not be able to hide the percentage of sugar recovered from cane and would be obliged to file higher sales tax returns. Monitoring is also needed at cement plants, edible oil and ghee mills, and beverage factories. It can even be outsourced.

The point of sales regime at retail outlets was introduced a few years back. Though few retail outlets registered in the POS system, the sales volumes recorded from the registered outlets were much higher than these retailers filed when they were outside the system.

It is the most promising initiative introduced by the Federal Board of Revenue (FBR), but the overwhelming majority is still operating outside POS. Experts think that the POS regime, if properly implemented, would become the major source of sales tax.

Parameters for registration should be lowered every year so that each retailer joins the system as is the practice in developed economies. The collection of revenue could double through proper use of technology. It will provide resources for development work.

Everyone agrees that creating new jobs is the most excellent way to reduce poverty. Innovation in information communication technology is helping people in finding jobs or increasing their earnings from the skills they possess.

Around 15 years back, plumbers, carpenters, electricians, masons, and painters had to register themselves with a shop selling goods in their respective fields to get work.

Today, a number of these low skilled workers have provided their clients with their mobile numbers who call them whenever they need their services. These low skilled workers do not have resources to establish their outlets in the market and many of them are not accommodated by the shopkeepers that sell and repair goods related to their field.

Smartphones have good skilled workers with a sort of level playing field as they can increase their earnings through better services. Their work is advertised by the word of mouth, as good work done by them spreads through beneficiaries.

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