Intergovernmental Transfers and Poverty Alleviation

Govinda Rao and A Das-Gupta

Environment and Planning C, 1995, vol. 13, issue 1, 1-23

Abstract: In this paper the design of intergovernmental transfer schemes in a federation is analysed, focusing on schemes that can have a significant impact on improving interpersonal distribution in the sense of alleviating poverty. It is argued that states with a lower income have larger concentrations of poor persons and that their ability to combat poverty is lower and their opportunity cost higher. Federal transfers are not only a cost-effective means of enabling such states to undertake nationally optimal levels of poverty alleviation but also a way of ensuring that they actually do so. The distribution of intergovernmental transfers in India during the seventh five-year plan is examined, and it is argued that general-purpose and specific-purpose transfers were inadequate and imperfectly designed from the perspective of poverty alleviation.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:13:y:1995:i:1:p:1-23

DOI: 10.1068/c130001

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