Discuss the policy options to reduce income inequality and poverty.

Policy options to reduce income inequality and poverty are the following:-

1. A strategy or collection of policies intended to address factor price distortions (underpricing capital or overpricing modern-sector skilled salaries) to guarantee that market or institutionally determined prices offer proper signals and incentives to both resource providers and producers. Increased productivity, increased employment, and less poverty should all result from correcting misleading prices. Additionally beneficial may be the encouragement of homegrown technical research and the creation of effective, labor-intensive production techniques.

2.  A measure or package of measures intended to affect fundamental structural changes in the way that wealth, power, and access to chances for education and related income-generating (employment) work are distributed. These regulations affect the whole social, institutional, cultural, and political fabric of the developing world, going beyond the scope of markets. However, such fundamental structural adjustments and significant asset redistributions will increase the likelihood that the living conditions of the vast majority of rural and urban poor people will significantly improve, whether they are implemented immediately (for example, through public sector interventions) or gradually over time (through redistribution from growth).

3.  A measure or set of measures intended to change the size of the income distribution at the top through the implementation of legally mandated progressive taxation on incomes and wealth, while also providing the poor with direct transfer payments and expanding the availability of publicly funded consumption goods and services, such as workfare programs. Overall, this provides a social "safety net" for those who may otherwise be overlooked throughout development.

4.  A set of targeted policies that go beyond safety net programs to directly improve the well-being of the poor and their communities would include microfinance, health, education, agricultural development, environmental sustainability, and community development and empowerment programs, all of which are described in this text. These can be carried out locally or internationally with government assistance, or by nonprofit groups with local and global aid.