States' Finances & Poverty Alleviation: J-PAL

New Delhi, Oct 5 (PTI) States need to improve their financial health to achieve faster poverty reduction goals, J-PAL, part of the Massachusetts Institute of Technology (MIT), Global Executive Director Iqbal Singh Dhaliwal has said.

"The central government's fiscal deficit is fine, but the state governments are facing considerable challenges in terms of their finances and fiscal resources. There are two basic reasons for this.

"One is the addition of schemes after schemes. Whatever programme launched 20 years ago is also running along with what has been launched recently," he told PTI in an interview.

"There is a need for rationalisation of such schemes," he said, adding that schemes which have served their purpose should be phased out, like how we replace our old TV or laptops after they have served their purpose.

Dhaliwal, a former bureaucrat turned economist, also suggested that the government should consider providing money for productive purposes, like setting up small businesses or working capital for small businesses and monitoring end-use.

"The method of giving, the amount of giving, and the date of giving in a month. All of those make a difference, and there is more experimentation that needs to be done," he noted.

He also made a case that the government should focus on providing better public schools and primary health centres rather than giving cash in hand.

Speaking about AI's impact on jobs, Dhaliwal said it would lead to job losses in India, like the US and Europe, and replace low-skilled jobs in the BPO and IT sectors.

There is an urgent need to upskill these vulnerable sections and provide necessary training so that they are ready for AI-induced working, he said, adding that it would prevent job losses.

Information about the secure and threatened job sectors has to be transmitted to ITIs and schools, he pointed out.

Abdul Latif Jameel Poverty Action Lab (J-PAL) is a global research centre working to reduce poverty by ensuring that policy is informed by scientific evidence. Anchored by a network of more than 1,100 researchers at universities around the world, J-PAL conducts randomised impact evaluations to answer critical questions in the fight against poverty.

J-PAL co-founders Abhijit Banerjee and Esther Duflo, with longtime affiliate Michael Kremer, were awarded the 2019 Nobel Prize in Economics for their pioneering approach to alleviating global poverty.