Government spending on rural development directly targeted to the rural poor through employment and community development programs has successfully reduced rural poverty, but its impact has been smaller than expenditures on roads, welfare of scheduled castes and tribes and other backward classes, and health. The results of this study have very important policy implications. In order to reduce rural poverty, the Indian government should increase its spending on rural roads. This type of investment not only has the largest poverty impact per rupee spent, but also yields the largest productivity growth. Government expenditures on agricultural research, irrigation, and soil and water conservation have smaller productivity effects and smaller impacts on rural poverty than roads.
Proper citation is required.