Govt launches plan to tackle rural poverty!

India on Thursday formally launched an ambitious bid to tackle village poverty by seeking to guarantee a hundred days of paid employment each year to rural families left behind by a city-based economic boom.
The scheme was launched in a remote village in Anantapur district in Andhra Pradesh where thousands of farmers have committed suicide in the past two years unable to bear the burden of huge debts.
"The Employment Guarantee Act will be a landmark in our history in removing poverty from the face of our nation," Prime Minister Manmohan Singh said while launching the programme.
But economists say the plan has the potential to widen the large fiscal deficit, push up interest rates and hurt the bond market.
Government estimates suggest the poverty relief plan will cost the government nearly $9 billion per year when it is implemented in all the 600 districts of the country.
"A sound monitoring system should be put in place. It should involve all stake holders," Singh said, while urging state governments to make sure the benefits reach the poor and avoid bureaucratic roadblocks.
"We must be tireless in our effort to ensure that benefits reach the poor to the maximum extent possible," Singh said.
The rural jobs plan is part of the Congress-led government's efforts to support the rural poor, who helped bring it to power in 2004 and to fulfil its promise to enact reforms "with a human face".
It offers one member of each rural household the chance to earn the legal minimum wage for 100 days work every year on projects that improve rural infrastructure, ranging from water conservation to tree planting and road construction.
State governments will have to fund 10 percent of the scheme which the government plans to initially roll out in 200 districts and later across the country.
The government has said it expects its finances to come under strain in the coming months as it struggles to find resources to fund the job guarantee plan and a complimentary food-for-work programme.
India has set a fiscal deficit target of 4.3 percent of gross domestic product for the year to March 2006, slightly up from 4.1 percent in the previous year.
Analysts said ultimately the cash will have to come from the federal budget which in turn will increase the budget deficit and push up interest rates.