- Increase in Saving :
In order to get rid of the supply side vicious circle in these countries, efforts should be made to increase savings so that investment in productive channels may be encouraged. To increase saving, expenditure on marriages, social ceremonies, etc., should be curtailed. In under developed countries, the possibility of voluntary savings is slim. Thus, in this regard, government interference is necessary. The government can increase saving, by altering its fiscal policy. The government can impose heavy taxes on luxury goods. Moreover, it can increase the role of direct taxes. Thus, the government can curtail consumption by altering the tax system.
- Increase in Investment :
The vicious circle of poverty, apart from increasing savings, investment of saving in productive channels is also of immense use. The policies of short run and long run investment should be coordinated. By short period investment, people can get the necessary goods at fair rates,
which will have a favourable impact on their skill. Moreover, along with short period investment, investment in the establishment of multipurpose projects, like iron and chemical fertilizers should be properly encouraged. Proper monetary and banking policies should be adopted which may provide facilities and encouragement to small savings.
- Balanced Growth :
To resolve the demand side, the extent of the market should be widened so that people may get inducement to invest. In this regard, Prof. Nurkse advocated the doctrine of balanced growth. According to the principle of balanced growth, investment should be made in every sphere of an economy so that demand of one sector can be fulfilled by another sector. Thus, an increase in demand will lead to
wider extent of the market, and so, the inducement to invest.
- Human Capital Formation :
The main obstacle to economic growth is the backwardness of human capital. Human capital should no longer be neglected. Many suggestions can be made to increase skill of manpower. For instance, education, technical knowledge, and vocational training should be enlarged. Health facilities should be enhanced, which may increase the efficiency of the workers. Transportation and communication should be developed.
- Industrialization:
Poverty can be eradicated by a self-sustaining process of industrialization. All industries should have linkage to build a powerful process of ancillary industries and occupations. Basic Issues in Development be linked to agricultural growth. Agro-based industries should grow to provide employment to village people as they are very much labour intensive. Industrialisation can contribute to the growth process and bring improvement in the standard of living of people. Other Measures for Poverty Reduction
- More employment opportunities :
Poverty can be eliminated by creating more employment opportunities, so that people may be able to meet their basis needs
- Minimum needs programmes:
Providing minimum needs to the poor people can help to reduce the problem of poverty
- Social security programmes:
Various social security schemes, like worker's t compensation, maternity benefit. provident fund, etc., can make a frontal attack on poverty.
- Small scale industries:
Encouraging and establishing small scale industries can create jobs in rural areas, which can reduce poverty
- Spread of education:
Education can create awareness and build confidence among people to find methods to overcome poverty.
- Empowerment of poor:
Poor people are voiceless due to the ruthless system of development. So, empowerment of poor people will reduce poverty.
- Land reforms:
Land belongs to the absentee landlords in India. Therefore, land reform is needed for giving rights to the actual tiller of the soil.
- Asset creation:
Productive assets must be created which will ensure regular income for the poor people
- Political will:
Political will and thrust is needed to face the challenge of poverty. Government policy should be designed with determination for having a poverty free country.
- Social change:
Social strata and traditional values should be free from dogmas. The caste system should not discriminate any people for anything. Social reforms are also needed to remove poverty among the lower caste and women. You have read about the vicious circle of poverty, dimensions of poverty, causes and remedies of poverty. Now, you should be able to answer the following questions in order to check your progress.
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