POVERTY REDUCTION STRATEGY TN

Chapter 6
LAST MILE REACH STRATEGIES
While economic growth uplifts some of the existing poor above the poverty line and
reduces the depth of poverty for the remaining poor, there still remains a section of the
poor who are bypassed by the growth processes or get only marginal benefits. Their
ability to participate and benefit from the broad macro forces and fiscal interventions
including education and health is constrained due to access costs, participation barriers,
and other initial disadvantages. For this section of population, inclusion and reach has to
be brought out by specially designed policy interventions. In this Chapter, we look at
issues of improving allocative efficiency by reorienting allocations to the neediest and
most disadvantaged districts and blocks and/or sections of society so as to augment the
poverty-reducing impact of a large number of specialised programmes. This Chapter
discusses strategies to maximize the benefits of the plethora of central and centrally
sponsored schemes at the state level.
Economists who favour using targeting of selected expenditure programmes
argue that attempts to identify the poor and targeting benefits to them can serve
important re-distributive and safety net roles in a market economy (World Bank, 1990;
Lipton and Ravallion, 1995). Grosh (1995, p. 465) has observed: “targeted programs
have much more incidence than general price subsidies”, and (p. 466): “on an average
targeted programs also have more progressive incidence than public primary health and
public primary education services, although there is a good deal of overlap in the
ranges”.
Chaudhuri and Ravallion (1994) from their study of longitudinal data on 103
households in three villages over 1976-1983 with a view to deriving implications for
targeting in the case of the chronically poor, arrived at the following conclusions:
i. Current income generally dominates all other measures for all budgets in
identifying the chronically income poor. At low budget levels it is also better at
identifying those who are chronically poor in terms of their mean consumption.
ii.
At the lower end of the budgets considered, current food expenditure per person
is worse than any of the other consumption or income measures. But at the
upper end it performs better than most.
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