Cheque book for Chhattisgarh

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Having just spent a week in Jharkhand and Chhattisgarh, visiting villages in daytime and returning at night to the booming cities of Ranchi and Raipur, I once again came face to face with two stark issues facing India today—inequitable growth and an uncaring system.

We are well-set on a path of deeply inequitable growth, with all its attendant problems—hopeless unemployment, increasing crime and Naxalism and environmental degradation. The recent rise in food prices makes growth even more inequitable as inflation reduces the real wage rate of the poor.

Yet, our uncaring system continues with its well-rehearsed response, captured in the Hindi proverb—“Andha baante rewri, dey apne ko baar baar” (A blind man distributing candy, gives it to himself again and again). There is no dearth of poverty alleviation schemes, both at the national and the state level. Funding is enormous, typically exceeding Rs 400-500 crore per district per year. But the manner in which all these schemes are implemented, including purposive wrong selection of the non-poor and systematic corruption, ensures that most of the benefit does not go to the poor. The “system”, whose visible face is the local politician and the local administrator, and increasingly, “contractor” NGOs, does not care what happens to the poor, as long it gets its cut.

In this scenario, where does one turn to? One way is to support the livelihood initiatives of a large number of economically active poor households, who need access to finance, with amounts as little as Rs 5,000. Since 1970, the Government has been trying to do this, first by nationalising banks, opening rural branches, and then launching the IRDP in 1980, a programme designed to give subsidised loans to families below the poverty line. When this showed disappointing results (only about 20% of IRDP loans were repaid), a second round of effort was begun with the self-help group (SHG)-bank linkage program, which gathered momentum since 2001, now reaching nearly 60 million households.