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2) Government should promote crop insurance policies, i.e., buffering agricultural households against income shocks, as this would lead to reduced levels of child labor in developing countries (many of which are primarily agriculture dependent).

3) Steps to improve supply of credit to rural areas / poor households through banks / cooperatives would go a long way in helping alleviation of poverty, creating income generation opportunities, and thus, helping tackle child labor.

Policies Pertaining to Banning / Rehabilitation of Child Labor

Policy makers should reconsider the policy of banning child labor in various sectors. As Bhukuth and Ballet argues in their paper, the family background, reasons behind children working with parents, i.e., to repay loan, etc., should all be considered before banning child labor. Such one-sided moves may prove to be inefficient as they reduce the overall income levels of households, forcing them into poverty and debt traps.

Further, government should keep focusing on providing vocational training to those children who return to schooling systems in their later stages of life. Such kind of vocational training policy can help these child laborers to return to mainstream of life rather than spending the life in its entirety as a low-wages laborer. Moreover, they can progress economically and socially, which eliminates the necessity of the child labor in the family forever.

These policy measures are valid in the context of both India as well as other developing countries. In India, farm sector is already a recipient of priority sector lending for banking industry. However, large parts of rural India are still dependent on traditional money-lenders who charge very high interest rates. Thus, it calls for increasing the reach of banks to rural consumers besides promoting micro-finance institutions. Government may also collaborate with NGOs to promote women self-help groups, as it will serve the purpose of providing credit easily as well as promoting women empowerment. Grameen Bank (Bangladesh) is already a successful model, which has achieved both the above-mentioned purposes.

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Dr. Shreyas Goswami and Vineet Jain are the First Year MBA (BM) Students at XLRI, Jamshedpur. While Shreyas is a Doctor by profession, Vineet is a Civil Engineer from Delhi College of Engineering, Delhi University.