Incidents of Child Marriages fell significantly in India: Annual Health Survey Report

According to the data released by first Annual Health Survey (AHS), conducted by the census authorities, the incidents of child marriage fell significantly over the past few years. The data was released on 16 April 2012.
The AHS, world’s largest demographic survey, was carried out by the Ministry of Health and Family Welfare in collaboration with the Registrar General of India (RGI) and Ministry of Home Affairs of India. The survey was conducted in all 284 districts of the Empowered Action Group (EAG) states that includes Rajasthan, Uttarakhand, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Bihar, Jharkhand, Odisha and Assam. The nine states account for half of the country’s population. The project was launched to assess the impact of National Rural Health Mission (NRHM) in all 284 districts. Until recently the only reliable source of such health data was the National Family Health Survey, which the health ministry has now discontinued.
The survey was conducted by private agencies under the supervision of RGI. The key findings of the latest reports of the survey are as follows:
•  One-fifth of marriages in Bihar between 2007-09 involved women under 18.
•  In Jharkhand, the proportion of child marriage went down from 60 percent to 18 percent earlier.
•  Rajasthan with 22 percent cases of child marriage has the highest proportion of women under 18 getting married.

•  Contraceptive use remains low despite improvements in several regions.
•  Among the 9 states, Bihar has the lowest contraceptive use with just over a third of women aged 15-49 using any method of contraception.
•  Sitapur in UP emerged as the district with the lowest contraceptive use as only 20 percent of women found using any method of contraception.
•  Condition of maternal and infant health is still the subject of worry.
•  Less than 5 percent of women in UP had a full ante natal check-up.
•  Chhattisgarh, with 20 percent full ante-natal check-up, emerged as the best-performing of these states.
•  Less than half of pregnant women in Jharkhand and Chhattisgarh have safe deliveries.
•  UP, Bihar and Uttarakhand saw 40 percent of safe deliveries.

APPSC JUNIOR ASSTS. IN ENGINEERING LABS (GROUP-II LIMITED) EXAM G.S. SOLVED PAPER

Five reasons why a drought in India won't matter

Droughts are those creeping sorts of natural disasters that grab us unawares. Or are they? The south-west (June-September) monsoon, that gives almost 75% of India's annual rainfall, is erratic in one out of four years.
With wide variations in agro-climatic zones, drought is guaranteed somewhere in the country each year, affecting about 50 million people.

Changing weather patterns have accelerated drought attacks. There were six between 1900 and 1950 and 12 in the following 50 years. We have already faced three droughts between 2000 and 2009.

So, if this monsoon produces droughts in some areas - we are nowhere close to that possibility right now - do we have to worry? Not really. There are five reasons for this.

WE HAVE LEARNT TO MANAGE DROUGHTS

After the 2002-03 drought, the government developed a standard operating procedure on how to tackle water shortage for humans, cattle and crops. Once a drought is officially declared, several things happen at once. The Central government starts rescheduling farm loans, moving water and fodder by rail, hiking food allocation to poor families, creating more jobs. A ministerial task force is set up to take rapid decisions.

Drought-declared states are monitored individually by the Centre. The Essential Commodities Act is used to prevent hoarding, and states get cash for relief programmes. The upshot of these moves is that even though the majority of India's poor families live in rain-fed areas, destitution from loss of farm income is considerably less.

AMPLE FOOD IS AVAILABLE

Even a 20% drop in rice production this year will not impact supply after the record harvest last season. The government is holding enough rice and wheat to supply ration shops for three years. This puts a ceiling on consumer foodgrain prices. A sugar shortage is unlikely because sugarcane is grown on irrigated land. Besides, India has plenty left over from last season that can be diverted from exports to the domestic market.

Punters may be betting on a shortage in edible oils and pulses. But the summer's production loss can be compensated by a good winter crop of oil-rich mustard seed and chickpea, India's largest pulse crop. As almost half the edible oils and a fifth of the pulses consumed annually are imported, price and availability are anyway decided by international markets.

Importing a tad extra won't send the market into frenzy. Even coarse grain, mostly fed to livestock and chickens, may eventually not be scarce as more land is being planted with these hardy crops. But consumers will feel the pinch of more expensive green vegetables as fewer farmers in rain-fed areas would be willing to invest in these high-value crops. Milk and meat will also become dearer as fodder prices rise.

ANDHRA PRADESH BUDGET 2012-13 HIGHLIGHTS (TELUGU)

Agricultural Development Programmes

S.No.	Agricultural Development Programme	Year of Beginning	Objective/Description
1	Intensive Agriculture Development Program (IADP)	1960	To provide loan , seeds , fertilizer tools to the farmers.
2	Intensive Agriculture Area Program (IAAP)	1964	To develop the special harvest.
3	High Yielding Variety Program (HYVP)	1966	To increase productivity of foodgrains by adopting latest varieties of inputs for crops.
4	Green Revolution	1966	To increase the foodrains , specially food production.
5	Nationalization of 4 banks	1969	To provide loans for agriculture , rural development and other priority sector.
6	Marginal Farmer and Agriculture Labor Agency (MFALA)	1973	For technical and financial assistance to marginal and small farmer and agricultural labor.
7	Small Farmer Development Agency (SFDA)	1974	For technical and financial assistance to small farmers.
8	Farmer Agriculture Service Centres (FASC)	1983	To popularize the use of improved agricultural instruments and tool kits.
9	Comprehensive Crop Insurance Scheme	1985	For insurance of agricultural crops.
10	Agricultural and Rural Debt Relief Scheme (ARDRS)	1990	To exempt bank loans upto Rs. 10,000 of rural artisans and weaver.
11	Intensive Cotton Development Programme (ICDP)	2000	To enhance the production, per unit area through (a) technology transfer, (b) supply of quality seeds, (c) elevating IPM activities/ and (d) providing adequate and timely supply of inputs to the farmers .
12	Minikit Programme for Rice, Wheat & Coarse Cereals	1974	To increase the productivity by popularising the use of newly released hybrid/high yielding varieties and spread the area coverage under location specific high yielding varieties/hybrids.
13	Accelerated Maize Development Programme (AMDP)	1995	To increase maize production and productivity in the country from 10 million tonnes to 11.44 million tonnes and from 1.5 tonnes/hectare to 1.80 tonnes/hectare respectively upto the terminal year of 9th Plan i.e. 2001-2002 (revised).
14	National Pulses Development Project (NPDP)	1986	To increase the production of pulses in the country to achieve self sufficiency.
15	Oil Palm Development Programme (OPDP)	1992	To promote oil palm cultivation in the country.
16	National Oilseeds and Vegetable Oils development Board (NOVOD)	1984	The main functions of the NOVOD Board are very comprehensive and cover the entire gamut of activities associated with the oil seeds and vegetable oil industry including – production, marketing, trade, storage, processing, research and development, financing and advisory role to the formulation of integrated policy and programme of development of oil seeds and vegetable oil.
17	Coconut Development Board	1981	To increase production and productivity of coconut To bring additional area under coconut in potential  non-traditional areas To develop new technologies for product  diversification and by-product utilisation To strengthen mechanism for transfer of technologies To elevate the income level of small and marginal farmers engaged in coconut cultivation. To build up sound information basis for coconut industry and market information To generate ample employment opportunities in the rural sector.
18	Watershed Development Council (WDC)	1983	Central Sector Scheme(HQ Scheme)

Various Development Programmes

S.No.	Development Programmes	Year of Beginning	Objective/Description
1	Housing and Urban Development Corporation	1970	Loans for the development of housing and provision of resources for technical assistance.
2	Members of Parliament Local Area Development Scheme (MPLADS)	1993	To sanction Rs. 1 Crore per year to every member of Parliament for various development works in their respective areas through DM districts.
3	Scheme for Infrastructural Development in Mega Cities (SIDMC)	1993	To provide capital through special institutions for water supply, sewage, , drainage, urban
4	Scheme of Integrated Development of Small and Medium Towns	Sixth five year plan	To provide resources and create employment in small and medium towns for for prohibiting the migration of population from rural areas to big cities.
5	District Rural Development Agency (DRDA)	1993	To provide financial assistance for rural development.
6	National Slum Development Programme	1996	Development of Urban Slums.
7	Integrated Rural Development Programme (IRDP)	1980	All-round development of the rural poor through a program of asset endowment for self employment.
8	Development of Women and Children in Rural Areas (DWCRA)	1982	To provide suitable opportunities of self employment to the women belonging to the rural families who are living below the poverty line.

National Health Programmes In India

S.No.	National Health Programmes	Year of Beginning	Objective/Description
1	National Cancer Control Programme	1975	Primary prevention of cancers by health education regarding hazards of tobacco consumption and necessity of genital hygiene for prevention of cervical cancer, etc.
2	National Program of Health Care for the Elderly (NPHCE)	2010	To provide preventive, curative and rehabilitative services to the elderly persons at various level of health care delivery system of the country, etc.
3	National Program for Prevention and Control of Deafness (NPPCD)	----	To prevent the avoidable hearing loss on account of disease or injury, etc.
4	District Mental Health Program (NMHP)	1982	To ensure availability and accessibility of minimum mental health care for all in the foreseeable future, particularly to the most vulnerable and underprivileged sections of population.
5	National Cancer Registry Programme	1982	To provide true information on cancer prevalence and incidence.
6	National Tobacco Control Program	2007	Preventing the initiation of smoking among young people, educating, motivating and assisting smokers to quit smoking, etc.
7	National Leprosy Eradication Program	started in 1955, launched in 1983	To arrest the disease activity in all the known cases of leprosy.
8	Universal Immunization Program (UIP)	1985	To achieve self-sufficiency in vaccine production and the manufacture of cold-chain equipment for storage purpose, etc.
9	National Vector Borne Disease Control Program	----	For the prevention and control of vector borne diseases

Eradication Of Child Labor Programmes

S.No.	Child Labor Programme	Year of Beginning	Objective/Description
1	Child Labor Eradication Programme	1994	To shift child labor from hazardous industried to schools.
2	National Authority for the Elimination of Child Labour (NAECL)	1994	Laying down the policies and programs for the elimination of child labour, especially in the hazardous industries, etc.
3	National Child Labour Project Scheme (NCLP)	1998	Establishment of special schools for child labour who are withdrawn from work.
4	Education Department and District Primary Education Program (DPEP)	1994	To revitalise the primary education system and to achieve the objective of universalisation of primary education for young children.
5	International Programme for Elimination of Child Labor (IPEC)	1991	To contribute to the effective abolition of child labor in India
6	National Commission for the Protection of Child Rights (NCPCR)	2007	To protect, promote and defend child rights in the country.
7	National Policy on Child Labour	1987	General development programmes benefiting children wherever possible. Project-based approach in the areas of high concentration of child labourers.

Women Empowerment Programmes

S.No.	Women Empowerment Programmes	Location	Year Of Estb.
1	Support to Training and employment Programme for Women (STEP)	2003-04	To increase the self-reliance and autonomy of women by enhancing their productivity and enabling them to take up income generaion activities.
2	Rashtriya Mahila Kosh (RMK)	1993	To promote or undertake activities for the promotion of or to provide credit as an instrument of socio- economic change and development through the provision of a package of financial and social development services for the development of women.
3	Rashtriya Mahila Kosh	1993	To facilitate credit support or micro-finance to poor women to start income generating activities such as dairy, agriculture, shop-keeping, vending, handicrafts etc.
4	Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG) – ‘Sabla’	2010	It aims at empowering Adolescent girls of 11 to 18 years by improving their nutritional and health status, up gradation of home skills, life skills and vocational skills.
5	Central Social Welfare Board (CSWB)	1953	To promote social welfare activities and implementing welfare programmes for women and children through voluntary organizations.
6	Rashtriya Mahila Kosh - (National Credit Fund for Women)	1993	It extends micro-finance services through a client friendly and hassle-free loaning mechanism for livelihood activities, housing, micro-enterprises, family needs, etc to bring about the socio-economic upliftment of poor women.
7	Indira Gandhi Matritva Sahyog Yojana (IGMSY)	----	To improve the health and nutrition status of pregnant, lactating women and infants
8	SwayamSiddha	2001	At organizing women into Self-Help Groups to form a strong institutional base.
9	Short Stay Home for Women and Girls (SSH)	1969	To provide temporary shelter to women and girls who are in social and moral danger due to family problems, mental strain, violence at home, social ostracism, exploitation and other causes.
10	Swadhar	1995	To support women to become independent in spirit, in thought, in action and have full control over their lives rather than be the victim of others actions.
11	Support to Training and Employment Programme for Women (STEP)	1986	To mobilise women in small viable groups and make facililies available through training and access to credit, to plovide training for skill upgradation, etc.
12	Development of Women and Children in Rural Areas (DWCRA)	1982	To improve the socio-economic status of the poor women in the rural areas through creation of groups of women for income-generating activities on a self-sustaining basis. The
13	Tamil Nadu Corporation for Development of Women	1983	Aims at the socio-economic empowerment of women

Employment Generation Programmes

S.No.	Employment Generation Programme	Year of Beginning	Objective/Description
1	Employment Guarantee Scheme of Maharashtra	1972	To assist the economically weaker sections of the rural society.
2	Crash Scheme for Rural Employmement (CSRE)	1972	For rural employment
3	Training Rural Youth for Self-Employment (TRYSEM)	1979	Program for Trainingrural youth for self employment.
4	Integrated Rural Development Programme (IRDP)	1980	All-round development of the rural poor through a program of asset endowment for self employment.
5	National Rural Employment Program (NREP)	1980	To provide profitable employment opportunities to the rural poor.
6	Rural Landless Employment Guarantee Program (RLEGP)	1983	For providing employment to landless farmers and laborers.
7	Self-employment to the Educated Unemployed Youth (SEEUY)	1983	To provide financial and technical assistance for self-employment.
8	Self-Employment programme for Urban Poor (SEPUP)	1986	To provide self employment to urban poor through provision of subsidy and bank credit.
9	Jawahar Rozgar Yojana	1989	For providing employment to rural unemployed.
10	Nehru Rozgar Yojana	1989	For providing employment to urban unemployed.
11	Scheme of Urban Wage Employment (SUWE)	1990	To provide wages employment after arranging the basic facilities for poor people in the urban areas where population is less than one lakh.
12	Employment Assurance Scheme (EAS)	1993	To provide employment of at least 100 days in a year in village.
13	Swarnajayanti Shahari Rozgar Yojana (SJSRY)	1997	To provide gainful employment to urban unemployed and under employed poor through self employment or wage employment.
14	Swarna Jayanti Gram Swarozgar Yojana (SYGSY)	1999	For eliminating rural poverty and unemployment and promoting self employment.
15	Jai Prakash Narayan Rojgar Guarantee Yojana (JPNRGY)	Proposed in 2002-03 budget	Employment guarantee in most poor distt.
16	National Rural Employment Guarantee Scheme	2006	To provide atleast 100 days wage employment in rural areas.
17	Sampoorna Grameen Rozgar Yojana	2001	To provide wage employment and food security in rural areas and also to create durable economic ans social assets.
18	Food for Work Programme	2001	To give food thrugh wage employment in the drought affected areas in eight states. Wages are paid by the state governments partly in cash and partly in foodgrains.
19	Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)	2005	To create a right based framework for wage employment programmes and makes the government legally bound to provide employment to those who seek it.
20	Prime Minister’s Employment Generation Programme (PMEGP)	2008	To generate employment opportunities in rural as well as urban areas through setting up of new self-employment ventures/projects/micro enterprises.

Child Welfare Programmes

S.No.	Child Welfare Programmes	Year of Beginning	Objectives/Description
1	Integrated Child Development Services (ICDS)	1975	It is aimed at enhancing the health, nutrition and learning opportunities of infants, young children (O-6 years) and their mothers.
2	Creche Scheme for the children of working mothers	2006	Overall development of children, childhood protection, complete immunisation, awareness generation among parents on malnutrition, health and education.
3	Reproductive and Child Health Programme	1951	To provide quality Integrated and sustainable Primary Health Care services to the women in the reproductive age group and young children and special focus on family planning and Immunisation.
4	Pulse Polio Immunization Programme	1995	To eradicate poliomyelitis (polio) in India by vaccinating all children under the age of five years against polio virus.
5	Sarva Shiksha Abhiyan	2001	All children in school, Education Guarantee Centre, Alternate School, ' Back-to-School' camp by 2003; all children complete five years of primary schooling by 2007 ; all children complete eight years of elementary schooling by 2010 ; focus on elementary education of satisfactory quality with emphasis on education for life ; bridge all gender and social category gaps at primary stage by 2007 and at elementary education level by 2010 ; universal retention by 2010
6	Kasturba Gandhi Balika Vidyalaya	2004	To ensure access and quality education to the girls of disadvantaged groups of society by setting up residential schools with boarding facilities at elementary level.
7	Mid-day meal Scheme	1995	Improving the nutritional status of children in classes I – VIII in Government, Local Body and Government aided schools, and EGS and AIE centres.Encouraging poor children, belonging to disadvantaged sections, to attend school more regularly and help them concentrate on classroom activities. Providing nutritional support to children of primary stage in drought-affected areas during summer vacation.
8	Integrated programme for Street Children	1993	Provisions for shelter, nutrition, health care, sanitation and hygiene, safe drinking water, education and recreational facilities and protection against abuse and exploitation to destitute and neglected street children.
9	The National Rural Health Mission	2005	Reduction in child and maternal mortality, universal access to public services for food and nutrition , sanitation and hygiene and universal access to public health care services with emphasis on services addressing women's and children's health universal immunization, etc.

Anti Poverty Programmes

S.No.	Anti Poverty Programmes	Year of Beginning	Objective/Description
1	Antodaya Yojana	1977	To make the poorest families of the village economically independent (only in Rajasthan)
2	Swarnajayanti Gram Swarozgar Yojana (SGSY)	1999	Assistance is given to the poor families living below the poverty line in rural areas for taking up self employment.
4	Sampoorna Gramin Rozgar Yojana (SGRY)	2001	Providing gainful employment for the rural poor.
6	Employment Assurance Scheme	1993	To provide gainful employment during the lean agricultural season in manual work to all able bodied adults in rural areas who are in need and desirous of work, but can not find it..
7	Pradhanmantri Gramodaya Yojana (PMGY)	2000	Focus on village level development in 5 critical areas, i.e. primary health, primary education, housing, rural roads and drinking water and nutrition with the overall objective of improving the quality of life of people in rural areas.
8	National Rural Employment Guarantee Scheme (NREGS)	2006	To provide legal guarantee for 100 days of wage employment to every household in the rural areas of the country each year, To combine the twin goals of providing employment and asset creation in rural areas
9	Swarnajayanti Shahari Rozgar Yojana (SJRY)	1997	It seeks to provide employment to the urban unemployed lying below poverty line and educate upto IX standard through encouraging the setting up of self employment ventures or provision of wage employment.
10	Antidaya Anna Yojana	2000	It aims at providing food securities to poor families.
11	National Housing Bank Voluntary Deposit Scheme	1991	To utilize black money for constructing low cost housing for the poor.
12	Integrated Rural Development Programme (IRDP)	1980	All Round development of the rural poor through a program of asset endowment for self employment.
13	Development of Women and Chidren in Rural Areas (DWCRA)	1982	To provide suitable opportunities of self employment to the women belonging to the rural families who are living below the poverty line.
14	National Social Assistance Programme	1995	To assist people living below the poverty line.
15	Jan Shree Bima Yojana	2000	Providing insurance security to people below poverty line.
16	Jai Prakash Narayan Rojgar Guarantee Yojana	Proposed in 2002-03 budget	Employment Guarantee in most poor districts.
17	Shiksha Sahyog Yojana	2001	Education of Children below poverty line.

New plan for census towns: PURA 2.0

In the Census of India, the definition of urban area adopted was as follows: • All statutory places with a municipality, corporation, cantonment board or notified town area committee, etc.  • A place satisfying the following three criteria simultaneously: a) A minimum population of 5,000; b) At least 75 per cent of male working population engaged in non-agricultural pursuits; and  c) A density of population of at least 400 per sq. km. (1,000 per sq. mile). But the definition is unclear: the census calls them towns, but since they have gram panchayats rather than municipal corporations, the government seems to consider them rural. Thus Planning Commission has agreed to provide Rs-1500 Crore in the 12th Five year plan for developing infrastructure in rapidly urbanizing areas known as census towns in the new version of PURA (Provision of Urban Amenities in Rural Areas) to bring basic infrastructure to these areas. GOI have schemes for rural infrastructure, and schemes for urban infrastructure, but neither of them applies for these areas — caught in the middle of these two. During the 12th Five Year Plan period public-private partnership scheme will be used to bring water supply, sewerage, drainage, solid waste management and street lighting to such unofficial urban clusters, mostly in the six States — Uttar Pradesh, Tamil Nadu, West Bengal, Andhra Pradesh, Maharashtra and Kerala — which have seen the highest growth of census towns. Each project is likely to cost about 150 crore rupees with Rural Development Ministry providing a grant of 40 to 50 crore rupees; 70 to 80 crore rupees will be mobilized by ongoing central schemes, while the private sector is expected to bring in about 20 crore rupees. The Private Company in consulation with the Gram Panchayat will get the lease of 10 years for the physical infrastructure to be developed in such towns to recover the investment. Private sector entities having experience in development and management of community-oriented infrastructure projects shall be selected through an open competitive bidding process based on rigorous qualifications and evaluation criteria. The selected private partners would be required to provide amenities like water supply and sewerage, roads, drainage, solid waste management, street lighting and power distribution and undertake some economic and skill development activity as part of the PURA project. The private partners may also provide add-on revenue-earning facilities such as village linked tourism, integrated rural hub, rural market, agri-common services centre and warehousing etc. in addition to the above mentioned amenities.  The scheme is a revamp of the former President A.P.J. Abdul Kalam's brainchild, PURA, which was initially aimed at providing city amenities to villages. In its latest avatar, PURA 2.0 is focussing on the development of 50 to 60 potential growth centres such as census towns. Initial pilot projects have begun in Kerala, with eight other projects awaiting final approvals from State governments.

BONN CLIMATE CHANGE CONFERENCE 2012

The 36th sessions of the Subsidiary Body for Implementation (SBI) and of the Subsidiary Body for Scientific and Technological Advice (SBSTA), the fifteenth session of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA), the seventeenth session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) and the first session of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) takes place concurrently from 14 to 25 May. The negotiations in Bonn were meant to build on a deal struck in December in Durban, South Africa, to create a new global climate pact by 2015 that would make both rich and poor nations rein in emissions caused by the burning of oil and other fossil fuels. More than 180 countries agreed on an agenda for work on a new climate treaty by 2015 at United Nations climate talks. The European Union claims China and other developing countries are backsliding on commitments made in Durban to bring the discussion on emissions cuts from both rich and poor nations into one forum, instead of the current structure, which has two parallel negotiation tracks. Developing countries — backed by climate activists — accuse the U.S., EU and other industrialised nations of trying to evade commitments made in previous negotiations and shift responsibilities for tackling climate change to the developing world. Environmentalist groups and countries that are particularly vulnerable to the effects of climate change warn that time is running out to avert disastrous consequences like increased extreme weather, ocean acidification and glacier melts. Countries have agreed that deep emissions cuts are needed to limit a rise in global average temperature to less than 2 degrees Celsius this century above pre-industrial levels, a threshold that scientists say is the minimum required to avert catastrophic effects. However, one of the main contributors to global warming, global carbon dioxide emissions, hit a record high last year, according to the International Energy Agency, which advises industrialised countries. Some countries also look set to miss their emissions cut targets for 2020, putting the world on a dangerous trajectory towards a rise in global average temperature of 3.5 degree Celsius, research showed. The only existing binding treaty, the 1997 Kyoto Protocol, was shunned by the U.S. because it doesn't impose any emissions targets on China, thus leaving out the two biggest carbon emitters on the globe. It was set to expire this year but countries agreed in Durban to extend it, though they haven't agreed on how long. Canada, Japan and Russia have refused to make any new commitments under Kyoto, meaning it only covers about 15 per cent of global emissions.

Microfinance: Issues and future in India

Microfinance is one sector about which the perception of common man, policy makers and public media has witnessed peaks and valleys in short span of time. The sector was perceived as Messiah for unbankables due to its unprecedented success in South Asia. Many social scientists and various political and business leaders looked at it as a panacea for poverty stricken vulnerable and marginalized section of the society. There was a strong advocacy to replicate the model across the third world countries.

In India the Microfinance was extended to remote areas with high euphoria, and as a model which was perceived to reduce “poverty through profits”. It was seen as a win-win model for financial institutions as well as for the bulk of population which does not have access to financial institutions. However within a short span of time microfinance institutions were perceived to be blood sucker of the poor. They were soon looked upon not only as anti developmental but also as a neo avtar of moneylender of pre independent era who use to charge exorbitant rate of interests and adhered to coercive methods for the recovery.

If we critically examine this sector the reality of this sector lies some where in between “messiah of poor” and “neo avtar of coercive moneylenders”. To understand the realities of this sector we must understand the basic issues in the model which resulted in its disgrace. The following were the issues with model in India:

1.    In the absence of any regulation various Microfinance Institutions (MFI’s) started charging very high rate of interests from their clients. Although it’s a fact that disbursement of loans in the rural areas involves high administrative cost and greater risk in the absence of collaterals. Thus it is impossible to deliver the credits in rural population on an interest rate at par with their urban counterparts. However, the profit motives of many MFI’s eclipsed the developmental goal of the sector. As a result exorbitant interest rates and opaque policies were rampantly practiced.

2.    MFI’s deviated from the principle of disbursing the loans for the productive purpose leading to debt cycle. The success of Microfinance model rests on the fundamental principle of lending for the productive purposes. In order to expand the clientele base various MFI’s ignored this basic tenet and started lending for non productive purposes as well.

3.    Overleveraging was also one of the major error which MFI’s indulged into. Multiple borrowing   from various sources resulted into indebtedness much above the credit wroth of the clients and finally resulted into bad loans.  

4.    Leakage in the form of “ghost loans” and fraudulent loans by the staff of MFI’s was also one of the major flaws in the model.

5.    In order to collect the loans the MFI’s adhered to coercive practices which at times were extra legal and even illegal. Since this financial model is complexly interwoven into socio-cultural and psychological dimensions as well, the result of these methods was counterproductive. Large number of suicides in Andhara Pradesh was the manifestation of this fiasco.

In order to deal with these issues, on the recommendation of Malegaon committee, Reserve Bank of India (RBI) has come up with the regulations. In order to regulate the interest rates by MFI’s, RBI has put a cap on the lending rate of MFI’s at 26% per annum and a margin cap of 12 percent over their cost of funds, whichever is lower.

In order to tackle the issue of overleveraging, RBI has now laid down a rule that only two MFI can lend to one borrower and both together cannot provide loans beyond Rs 50,000. The Information Technology is also being used to create an authentic data base of borrowers to prevent overleveraging.

The legislation and regulations by RBI have to a great extent addressed the flaws in the sector. Since the sector along with the financial inclusion is based on social capital as well, it can play a big role poverty elevation, empowerment and sustainable development.