lack of participation in decisionmaking and in civil, social and cultural life. one important thing to note is that poverty cannot be defeated through charity. empowering people with a means to sustaining themselves in the long term is the solution that can defeat poverty. 5. unemployment is at the center of poverty. for the poor, labour is often the only asset that can be used to improve the lives and wellbeing. it is crucial that we empower the poor who have the potential but often lack opportunities to shape their lives. bidirectional cause - effect relationship between financial exclusion and poverty 6. as i said earlier, poverty is generally associated with a low level of income. this income is primarily directed towards consumption thereby leaving very little for saving / investment. a low level of savings obviates the need for a banking account thereby creating financial exclusion and lack of investment opportunities. this creates a barrier for financial inclusion from the demand perspective. conversely, financial exclusion can deprive people of the benefits and the incentives offered by the financial system. poverty can, therefore, be self - fuelling from generations to generations. bis central bankers ’ speeches how to break this vicious circle? 7. i am not an economist. many eminent speakers would dwell on this issue during the day. however, i wish to put forward some perspectives as i see them. let me begin with measurement of poverty. i am not on whether those spending below rs. 32 in rural areas or below rs. 47 in urban areas ( as defined by the rangarajan committee ) or rs. 27 and rs. 33 respectively as fixed by tendulkar panel earlier, are to be considered poor. my question is whether such income levels across countries or states ( even after adjusting for purchasing power parity ) are comparable without taking into account the availability, quality and cost of such basic amenities as health care, education, transport, sanitation etc. would not a composite index ( if one can be devised ) of these two elements would be a truer indicator of real poverty level? this can be elaborated with several measurable examples but time limit does not permit to do so. 8. extending that argument further, would it mean that there could be two ways to address the challenge of defeating poverty? a. state ensures availability of quality amenities i mentioned earlier to all needy citizens – question is, whether it is feasible? b. empower and facilitate all citizens to earn such levels of income that they can buy these services from the open market

area of financial inclusion and poverty alleviation in the recent past. • is too much demand being placed on the banking system resources? the banks are presently almost alone expected to identify & enrol new customers, educate them, conduct aadhaar registration, carry out administration of linked life / non - insurance schemes & pension products and so on. the issue is whether it would encroach upon their other obligations of credit dispensation, maintaining asset quality, maintaining service standards etc. • loan waiver schemes or employment not resulting into creation of social infrastructure / productive assets raise risk to broader work culture / credit culture in the country • non - adherence to basic economic discipline by the states eg. in fixing the minimum support price can be counterproductive in the long run • weakened governance and multiplicity of regulations in the co - operative sector - are we doing enough to exploit potential of co - operative sector? • need we draw lessons from the history of rrbs while pursuing bc model? bis central bankers ’ speeches then there are two larger issues - one each in respect of rural and urban poverty alleviation • don ’ t we need a new model to enhance productivity & stop further fragmentation of already smaller land holding – are dbt / interest subvention long - term answers to these problems? • migration from rural india and rapid urbanization is a reality with social, infrastructural, employment and inclusion dimensions – are we adequately prepared to deal with them? 24. it must thus be appreciated that poverty alleviation is a long drawn process and needs support from all quarters – the government, other policy makers, the media and the society at large. each one needs to do his / her bit to ensure that the poverty is defeated so that prosperity thrives. an ecosystem needs to be created which can fight poverty in all its manifestations. i once again thank mr. kochhar and skoch for inviting me to this conference and wish the deliberations all success! thank you. bis central bankers ’ speeches