POVERTY REDUCTION STRATEGY TN

MDGs-Based Poverty Reduction: Main Challenges in Tamil Nadu
In developing a suitable strategy of poverty reduction in the context of achieving the
MDGs, some of the main challenges for Tamil Nadu are:
a. Poverty reduction has to aim at a sustained increase in incomes rather than
delivering a bunching of people just above the official poverty line who will
remain vulnerable to a variety of exogenous shocks.
b. Poverty reduction has to be strategised in a multi-dimensional framework
covering education, health, access to public services and safe drinking water.
Therefore, fiscal reforms will have to play a key role.
c. In Tamil Nadu, poverty is becoming progressively urbanized. The rural poverty
reduction programmes cannot be fully replicated in the urban areas. Different
strategies need to be developed for the poor living in the slum and non-slum
areas.
d. The overall demographic structure is changing in Tamil Nadu such that the share
of working age population will be increasing in the medium term and the share of
older people will increase in the longer run. These changes require massive
investment in education first and health in the longer run.
e. There are considerable inter-district and intra-district differences in the poverty
profile as well as education, health and gender related deficiencies, and the
relative positions of districts are quite different in terms of different indicators.
f. In Tamil Nadu, water scarcity and land degradation are two major constraints
that affect agriculture in the state, which impact the poor more than others.
Strengthening Growth
In Tamil Nadu, as in India as a whole, the structure of the economy is shifting away from
agriculture. Growth in employment in the primary sector in Tamil Nadu has been negative
in recent years whereas in secondary and tertiary sectors has been positive and relatively
high. The basic challenge in the context of the changing structure of the economy and
employment is to create the capacity to absorb the population migrating out of
agriculture into industry and services with proper training and skill development. At the
same time, productivity in agriculture should not be allowed to fall. This will require
considerable additional investment in agriculture where government will have to play a
key role as the returns will not be adequate to attract large inflows of private capital into
agriculture. Higher growth, particularly in the non-agricultural sectors, has been shown
to have a significant direct impact on reducing poverty in Tamil Nadu.
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