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POVERTY REDUCTION STRATEGY TN

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epayments) may be raised from 2.9 percent of GSDP to 4.6 percent during the same<br />

period. In contrast, expenditure on interest payments and pensions relative to GSDP<br />

would be reduced.<br />

T: We suggest a four-tier targeting strategy: District Level (separately for urban and rural<br />

poverty reduction), from District to Blocks (Taluks), from blocks to villages, and from<br />

village to households or individuals.<br />

E: Efficiency can be thought of in terms of (a) design efficiency, (b) allocation efficiency,<br />

and (c) implementation efficiency. It is suggested that reforming allocation strategies for<br />

different sectors, using indices of deficiency at the district level can result in considerable<br />

efficiency gain.<br />

R: In addition to the more efficient use of existing central and state schemes: two<br />

additional schemes are suggested. For the extremely poor, direct cash transfer in the<br />

form of ‘social income’ or ‘social benefit’ may be administered to the first two deciles of<br />

the BPL population in the rural areas. It is important that the extremely poor have some<br />

minimum income for meeting access costs and overcoming participation barriers to avail<br />

the benefits of other services provided by the government. Secondly, for all poor a<br />

scheme for providing an income generating assets workable within the house like<br />

providing an electricity generating charkha (e-charkha) would generate considerable<br />

supplementary income within the household.<br />

B: District Poverty Reduction Strategy (DPRS – Rural)<br />

M: Some basic industrial and service sector activity is needed to generate employment<br />

and multiplier effects in districts characterized by low level of economic activities.<br />

Location of an SEZ/Export oriented zone or attracting industry with special tax<br />

concessions will initiate the necessary stimulus in the income-deficient districts.<br />

Availability of good road connectivity and power are also important ingredients.<br />

A: Fiscal resources come from higher tier governments. There is scope for developing<br />

own tax and non-tax revenues.<br />

S: Each district needs to restructure expenditure towards areas where its deficiency is<br />

largest relative to other districts.<br />

T: Targeting has to be from district to blocks, from blocks to villages and from villages to<br />

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