In bonded child labor a creditor loans the parents a small amount of money in exchange for their child's labor. The labor is extremely cheap and the children work until the loan can be paid off in one lump sum. This almost never happens because the interest rates are greater than the wages of the child.

Poverty and lack of proper education aid child labor. In rural areas poverty affects 39% of the population and in urban areas poverty strikes 37% of the popula

India's lack of education results in only 64% of males in India being literate and only 39% of females. China, Sri Lanka, and Indonesia are countries with literacy rates at 72.6%, 86.1%, and 74.1% respectively. They all have a similar per capita income to India and their literacy rates dwarf India's 40.8% (Wiener 1991). China and Sri Lanka also have primary-school survival rates, 70% and 90.8% respectively, that exceed India's 38%. The cause of these dropout and illiteracy rates in India being what they are is the result of the children being needed to work to earn an income for the family.

Weiner, M. 1991. The Child and the State in India. Princeton: Princeton University Press.

India seems determined to eradicate child labor when looking at its laws. The Bonded Labor System Act of 1976 "frees all bonded laborers, cancels any outstanding debts against them, prohibits the creation of new bondage agreements, and orders the economic rehabilitation of freed bonded laborers by t

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