Policy makers and economists often see the requirements of these two segments at opposite ends of the social and economic hierarchy as being antithetical. That is why government policies are formulated in such a binary and narrowly conceived fashion. Liberalise the economy and encourage investment in industrial growth so the rich can make still more money. Introduce new "poverty alleviation" programmes so that the poor will think that government is concerned with their welfare. Strengthen the armed forces and police.

These knee-jerk, simplistic solutions are neither effective nor necessary. Ironically, but fortunately, both sets of issues have the same solution: rapid and sustainable development of the national economy. Properly designed, development can quickly solve the poverty problem – by eradicating it – and also strengthen the national economy. Sadly, this fact is not well understood by those who guide the destinies of our country.

No nation can be competitive if half of its working age population is out of work. No nation can be secure from outside threats if the majority of its people are undernourished and unhealthy. No person can be safe from violence if a large part of the citizenry remains marginalised outside the mainstream economy. Competitiveness and security can only come from a broad based development effort in which everyone contributes and everyone benefits – one which establishes a society that is equitable, resource efficient and in harmony with the environment: sustainable development.

Competitiveness is not a goal in its own right. It is a means – one of several – of bringing about conditions under which our people can improve their well-being. Even so, it would be a worthy pursuit and of considerable value, were it not so frequently associated with large tax concessions to encourage exports (comprising give-aways that enormously benefit a few rich people), and the displacement of workers by machines (worsening the lives of many poor people).

Poverty allevation programmes are not any better. The Jawahar Rozgar Yojana, the Indira Awas Yojana, the Rajiv Gandhi Mission and the hundreds of other manifestations of dynastic munificence represent a growing and ever more deceitful culture of government give-aways designed to buy what is now becoming an uneasy peace with the poor. This alphabet soup nourishes our parliamentary democracy by promising (but rarely delivering) government services to the people, making them increasingly dependent and unable to take care of themselves. Although these programmes have huge budgets, most of the money ends up in private pockets, political party coffers and elsewhere but not in the hands of those in whose names it was allocated. According to one former prime minister, the efficiency of these programmes is less than 20%. Many observers today, both in government and outside, consider even this low figure to be a gross overestimate.

The current policies lead directly to a growing gap between the material expectations of an ever-larger segment of our people and the economic possibilities they see for fulfilling them. This gap leads, in turn to disaffection, alienation, crime, militancy and finally terrorism. Growing unemployment, particularly among the youth, as more machines displace more labour, simply fuel these fires even more. The periods of violence and insecurity in the Punjab, Kashmir, Assam, Bihar, Andhra Pradesh have their roots in the inequities caused by neglect of investment in infrastructure and credit facilities aimed at creating local livelihood opportunities. And these instabilities, in their turn again, discourage investors from investing, setting up a vicious cycle in which neither the rich nor the poor benefit.