Marginal Utility Of State For The Deprived

Kiran Dahal

Marginal Utility (MU) is a widely used concept in economics. It can be defined as the benefit gained from consuming one additional unit of a product or service. Here the term ‘marginal utility of state’ implies the benefit derived from consumption of an additional unit of goods and service offered by the state to its people.
An important consideration of the concept of marginal utility is that marginal utility of anything does not remain constant. It differs from person to person. For instance, the marginal utility of money is higher for the poorer people than for the richer one. The same notion applies in the context of marginal utility of state as well. To put it more precisely, the marginal utility of state is different for different individuals or group of individuals. The purpose of this article is to explain to whom the marginal utility of state is highest in Nepal and its economic implications.
The composition of Nepali population is highly diverse. This diversity exists in the form of gender, ethnicity, caste, religion and geographic distribution. Furthermore, the distribution of income and wealth, and political power as well as socio-cultural set-up is highly uneven among these diverse groups of people. For simple understanding and analysis, people of Nepal can be broadly categorised into two groups; one group which is economically, politically, and/or socio-culturally resourceful and another group which is economically, politically and/or socio-culturally deprived.
In Nepal, the marginal utility of state is highest for those indigenous, Janajati, Madheshi, Muslim, Dalit, woman, marginalised, disabled and rural people who are economically, politically and/or socially deprived. It is because the services and goods offered by the state to these deprive people possess greater value than the same offered to the resourceful group. A few packets of freely distributed Jeevan Jal (Oral Rehydration Solution), for instance, can save the life of a diarrhea patient in Jajarkot district while the diarrhea patient admitted in Bir hospital has little importance of that freely distributed Jeevan Jal as he goes for other more effective medications. Indeed, most of the time, state is the last and only hope for the group of deprived, powerless, voiceless and vulnerable people.
So, from above discussion, it is clear that the marginal utility of state is highest for the group of deprived people. Now one simple question arises- what is the economic implication of this thought? The answer is simple- Nepal can comfortably achieve its sustainable development goals (SDGs) by effectively providing qualitative government services to its deprived population.
Here the discussion is limited to four basics- but strategically important- government services: public education, public health services, subsidised food distribution and the reservation quota in public services.
The government statistics shows that out of 7,391,524 school level students, 6,062, 831 (82 per cent) are enrolled in community schools. Again, out of the total 35,601 schools of Nepal, 29,035 (81.6 per cent) are public schools and the rest 6,566 (18.4 per cent) are private schools (Education in Figures, 2018).
It is easy to understand that those 82 per cent students studying in public schools belong to the deprived population of Nepal as the first priority of the resourceful group of people is obviously to admit their school going children in the private schools. So, if the state is able to provide optimally best quality education to those 82 per cent students in an effective way, then it will have certainly positive impact in the lives of those students and their respective families in the near future.
The latest statistics of the Ministry of Health shows that there are a total of 22 central hospitals, 27 zonal and regional hospitals, 76 district hospitals and 4,336 health posts including primary health care centres and urban health care centres while the number of private hospitals is 564. Clearly, it is the public health intuitions which are within the reach of deprived people.
So, if the government makes good provision of medical staffs, basic health equipment and freely distributed medicines in all its existing health institutions, and free health insurance of up to Rs. 50,000 to the poor families, then millions of deprived people could get an immeasurable health benefits.
The survey report on Nepal’s Food Security published in 2017 shows that 48 erstwhile VDCs of 6 districts face ‘high food insecurity’ and 183 erstwhile VDCs of 14 districts face ‘moderate food insecurity’. The Government of Nepal has been running subsidy food distribution programme in the needed areas but its implementation part is found very weak and ineffective.
The government has made the provision of allocating 45 per cent seats in public services with reservation to women, indigenous people, Janajati, madhesi, dalit, disabled and the backward regions. This is highly promising scheme for the deprived groups of Nepal. Unfortunately, this scheme is not reaching the targeted groups yet; only the clever ones are benefitting. If the government is able to reach to the targeted groups by doing necessary homework and revisions on this provision, then it would have a big impact.
So, the conclusion of this discussion is that the government could address the primary needs of deprived groups through the same existing mechanism. The need is uncompromised quality, efficiency and effectiveness in delivery of those services- for which good vision in the policy making level, and strong leadership, scientific management and commitment in the implementation level.
Now the question is how to direct these efforts to contribute to achieve the sustainable development goals. Delivery of basic public services to the deprived group does not contribute to economic growth in the immediate future. However, it builds strong foundation for growth in the long run. On the brighter side, such actions would have profound impacts in the sustainable as well as inclusive development goals of a nation as sustainable and inclusive development is, indeed, positive change in all human lives -especially the deprived ones.

That’s why the concept of marginal utility of state needs to be given more consideration while debating on the approaches to economic development as it opens the huge scope for incorporating the larger pool of deprived class in the mainstream of sustainable development and also offers higher returns from the usual investment of state resources.

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