D. Rajasekhar

Credit Constraints and Distress Sales in Rural India: Evidence from Kalahandi District, Orissa

The literature on the rural credit market in India (and elsewhere) has generally assumed that peasant farm households are rationed in their access to subsidized formal credit. Because of a lack of infrastructure and poor access to institutional credit, such farmers are exploited by means of an interlocked market connecting informal credit to the sale of paddy. The resulting gap, between the sale by a borrower of paddy at a predetermined low price, and the price of this commodity on the open market, constitutes the amount of what is termed a distress sale. The latter is itself influenced by the bargaining capacity (or lack thereof) of the peasant farmer who borrows on the informal market. Also of importance in determining whether or not a cultivator is compelled to resort to the informal credit market – and thus into an interlocked arrangement – is the need for additional liquidity to meet production costs and/or household consumption, as well as the monopsony nature of the paddy market. Data from Kalahandi district in Orissa suggest that access to formal credit is limited in rural areas although there exists a high demand for it, that a high degree of credit rationing by the formal lender occurs, and that poor implementation by the state of minimum support price policy all contribute to the need for informal loans and its attendant interlinkage.

Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance?

This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to flat pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent.

How Effective are Social Audits under MGNREGS? Lessons from Karnataka

This case study on social audits under MGNREGS in Karnataka aims to provide suggestions on how to improve the design and implementation of social audits in the state. With the help of the primary data collected from five grama panchayats in Chitradurga district, the paper argues that although the documentary evidence shows that social audits are conducted they do not fulfil the main objective of engaging the beneficiaries of the scheme and making the scheme effective. Social audit process is compromised by the influence wielded by village elites which results in the exclusion of poor labourers for whom the scheme is primarily meant. The social audit process could be made more participatory by ensuring that it is conducted in an impartial manner.

Collusion, Co-option and Capture: Social Accountability and Social Audits in Karnataka, India

The concept of accountability has generated extensive discussion in studies of international development, linking it with good governance, democratisation, participatory development and empowerment. Indias national rural employment guarantee scheme, which aims to improve the rural infrastructure and reduce poverty by providing wage work to the rural poor, involves mandatory social audit by the beneficiaries of the scheme, in order to ensure accountability of those implementing the scheme. In this paper, we examine the social audit process in a district in the state of Karnataka to ascertain the role played by the beneficiaries in achieving such accountability. We find that Vigilance and Monitoring Committees, entrusted to spearhead the social audit process in villages, consist mainly of males and cultivators, some of whom are large landowners. We also find that social audits are dominated by the local elite who stifle “voices” from below.

Social Protection Policies, Experiences and Challenges

Public debates about the relationship between economic strategies, social policies and within them, social protection, date back to at least the nineteenth century.1 These debates have often been fiercely fought. From the watershed 1834 Poor Law in England and Charles Dickens’s workhouses for the indigent poor through the variants of social policy that evolved in continental Europe (Bismarckian versus social democratic approaches to entitlements), and in the US during Roosevelt’s New Deal followed by the Kennedy-Johnson expansion of entitlements, to their reversal during the Reagan years in the US, such debates have covered a wide range of issues in the countries of the North. In the South, while debates around social policy are more recent and unevenly developed in different regions, they have often been equally contested. The intensity and scope of such debates within a country usually depends on its economic situation and its historical evolution, the strategy for growth and development and the conjuncture of its political economy.