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China have been both a major engine of economic growth and a<br />

potent force for rural poverty reduction during 1980s and 1990s.<br />

1.7 Recent studies [(Shenggen Fan, Peter Hazell, and Sukhadeo<br />

Thorat, 2000) 7 and (Shenggen Fan, Linxiu Zhang, and Xiaobo<br />

Zhang, 2000) 8 ] show that developing countries can significantly<br />

reduce rural poverty, stimulate agricultural growth, and move<br />

toward food security if they recognize that public investments<br />

are indispensable tools for achieving these ends and if they make<br />

the right investments (Table-1 and Table-2). In areas where<br />

investments in agricultural infrastructure have lagged, such as<br />

State of Bihar, State of Orissa, State of Assam and State of<br />

Madhya Pradesh, rates of growth in agricultural productivity<br />

and poverty reduction also lagged (Roy and Pal, 2001) 9 . Eastern<br />

Region (ER) of India comprises of 130 districts covering States<br />

of Orissa, Bihar, Chhattisgarh, Jharkhand, Eastern Uttar<br />

Pradesh, West Bengal and <strong>An</strong>dhra Pradesh. Most parts of the<br />

6<br />

Public Works projects often combine the provision of infrastructure with a safety net for the poor in the form<br />

of employment provision.<br />

7<br />

Shenggen Fan, Peter Hazell, and Sukhadeo Thorat (2000): “Government Spending, Growth and Poverty in Rural<br />

India”, American Journal of <strong>Agricultural</strong> Economics 82 (No.4, 2000): 1038-1051)<br />

8<br />

Shenggen Fan, Linxiu Zhang, and Xiaobo Zhang (2002): “Growth, Inequality, and Poverty in Rural China: The Role<br />

of Public Investments”, IFPRI Research Report 125, Washington D.C<br />

9<br />

Roy, B. C. and Suresh Pal (2001) : Incremental Capital-Output Ratio in Indian Agriculture,<br />

<strong>Agricultural</strong> Economics Research Review, 14(1):34-46<br />

8

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