MFIs in Andhra Pradesh are paying for the sins of their past. Market for new loans has dried up, banks have turned off their spigots while the AP government is content to sit back and watch. It has been eleven months since the Andhra Pradesh government issued an ordinance—later converted into the Andhra Pradesh Micro-Finance Institutions (Regulation of Money Lending) Act—which, the microfinance industry hoped, would be the magic remedy that...

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...

The government plans to pay `80 every year for three years to state-owned banks for each account they have for a beneficiary of the rural job guarantee scheme. This is expected to provide an incentive to lenders to ensure quicker delivery of wages under India’s flagship welfare programme. “We have made a proposal to the finance ministry that a public sector bank gets paid `80 per year for each MGNREGA (Mahatma Gandhi...

As higher urbanisation has long-term consequences for governance, the latest numbers should serve as a heads-up to the planners. More Indians are moving into towns now. According to the 2011 Census, the urban population grew by 90.99 million between 2001 and 2011. The absolute increase in the rural population over this period was 90.47 million. Put differently, urban population grew by 31.8 per cent, a little over two-and-a-half times the corresponding...

Exasperated with the public perception of its role, the Indian government appears keen to somehow abdicate its key sovereign function of making land available for economic development by dumping it on the private sector. This is wrong. The maintenance of up-to-date land records, the scientific identification of tracts for a shift from agricultural to non-agricultural uses and the smooth transfer of land assets are the functions of the sovereign. The...