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Cash transfer schemes help poor: World Bank chief

business Updated: Apr 22, 2013 12:25 IST

World Bank president Jim Yong Kim has praised the cash transfer programmes being implemented by several countries in the world as an effective way to help poor and reduce poverty.

Without naming India, which is one of the countries implementing the cash transfer programme, Jim described the scheme as an important step towards inclusive growth.

He was speaking at the 'Fiscal Policy, Equity and Long-Term Growth in Developing Countries Conference' held at the IMF headquarters in Washington on Sunday.

He said, "Sometimes, growth is not as inclusive as it should be. Government programmes can play a critical role to correct this failure.

"In Brazil, for example, there is very high inequality in market incomes, but the fiscal system reduces income inequality significantly through conditional cash transfer programmes, like Bolsa Familia."

"When I visited Brazil recently, I had the opportunity to see first hand how these programmes work and the vital support they provide to poor families. We are learning from such experiences so we can share them with other countries," he added.

"Just a couple of weeks ago, I took part in a meeting with the heads of all UN agencies. Together, we reviewed our programmes in Tanzania, which after a decade of high growth has not reaped the expected gains in reducing poverty.

"But now, after learning about experiences in Brazil and elsewhere, Tanzania is considering a conditional cash transfer programme," the Bank President said.

On fiscal policy to help reduce poverty, he said, "we need tools to better understand the impact of programmes on different segments of society.

"We should ask ourselves several basic but important questions...How progressive is a government's current tax and transfer system? Who benefits the most from public services? What are the most effective ways for tax and expenditure policies to help reduce poverty and inequality? And how can governments implement these policies in ways that promote sustained growth?"