The Centre is likely to ask states to devote 2% of the funds allocated to them under its flagship rural employment guarantee scheme for providing easy banking services to the rural poor. A funding crisis had hit the government's earlier effort to leverage the banking correspondent, or BC, model for the beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) after banks refused to bear the cost of...

Finally, there's some good news for the United Progressive Alliance government. Consumption numbers for the past six years show that real incomes have grown much faster under the Congress-led coalition than during the National Democratic Alliance era. What's more, poverty is trending down and rural wages are growing smartly. The 2009-10 survey by the National Statistical Survey Organisation (NSSO) shows real spending by each person in rural India rose 6.3%...

The current perception that cash transfers can replace public provision of basic goods and services and become a catch-all solution for poverty reduction is false. Where cash transfers have helped to reduce poverty, they have added to public provision, not replaced it. For crucial items like food, direct provision protects poor consumers from rising prices and is part of a broader strategy to ensure domestic supply. Problems like targeting errors...

Land acquisitions in India are invariably marked by violent protests. Is politics responsible for stirring up passions? Is it loss of a means of livelihood that landowners resent? Or is there a fundamental problem with the way acquisition is done that stirs up a hornet's nest? Look at the last issue first. There are two fundamental problems with the present system of land acquisition: the process of acquisition, and the...

The National Advisory Council has proposed a framework for the National Food Security Act. But its potential could be wasted by a flawed approach to the PDS. Two years have passed since the Central government announced that a draft National Food Security Act (NFSA) would be posted on the Food Ministry's website “very soon.” After prolonged deliberations, a detailed framework for this Act has recently been proposed by the National Advisory...