This paper discusses the role of social capital as a policy tool against poverty and inequality in the development strategies enhanced by international agencies in rural India.

In spite of the important results in economic growth, rural India still shows a very high level of poverty and inequality. Moreover, many scholars (Morris, 1998; Krishna, 2003; and Dowla, 2006) have focused on the lack of social capital to account for the increasing gap between rural and urban India, pointing out that social capital exerts a deep influence on development processes, especially in rural areas. Finally, many international agencies have launched, in rural India, development projects in which social capital is seen as a strategic variable.

We argue that the role played by social capital in development processes suffer from some sorts of ambiguity. It is not clear whether the lack of ‘good’ social capital can be considered in theoretical terms as a main cause for the failure of development strategies, or it is only one among other causes. Moreover, there is some evidence (see below) that social capital is not influent at all, and that, due to ‘bad’ quality, can become an obstacle to growth. At the same time, from a policy point of view, a careful reading of programmes and reports of international organizations shows a basic incoherence between the verbal emphasis on social capital and the actual role that is assigned to it.