I have heard that it is unsafe to show money or help someone in India.
Are there any rules I should respect in order to avoid getting into trouble? How should I deal with these beggars?
If you do not look like a native, then you will be hounded by paupers/beggars. If you help one, generally onlooking beggars may come asking you for money as well.
The rule to respect would be to ignore anyone asking for money - a conversation isn't going to lead anywhere.
Keep yourself safe - do not make a display of your money. You never know who's looking at you and what they have in mind.
The best tactic in India is to ignore beggars / paupers and keep moving on. The very fact that people give money creates a vicious cycle where people are forced into the profession by local mafia. Yes, you may think your alms to a small kid will feed him but it reality very often what happens is that the kids' parents or local mafia will take away their money at the end of the day.
Sometimes, beggars can be quite insistent and might even physically try to hold you back by tugging your shirt etc. The best way to handle the situation is not to throw money at it, but by politely-but-firmly saying no and walking away.
This doesn't mean, however, that you cannot help financially disadvantaged people out. A good starting place is GiveIndia, a directory of organizations in India that are tackling various issues in the country.
It's a difficult problem in any country. Most charities however will tell you that you should never give money to beggars. The reason being it's just money and often that money will go to drugs, drink, or even a 'supervisor' - as seen in Slum Dog Millionaire - kids beg for a gang, and they don't get the money themselves.
Charities have the viewpoint that they can better distribute the money, buy clothes, food and so on, and ensure it gets to the correct people.
However, there are problems with this. Some charities have massive overheads - much of the donations go to paying some staff, transport costs etc - so only a percentage of your donation reaches the end person.
In addition, some countries don't have charities for every area, or the people can't get to the charity, or are scared to use one, or don't even know they exist.
In the case you're worried about this, instead of giving money, offer food or water instead, it's immediately beneficial - if they're begging for themselves they'll be grateful, and your donation isn't wasted. Just make sure to try to treat them as a person still no matter what, whether it's drugs or unemployment or whatever that got them into that situation, they're in a hard place but are still people, and still deserve some respect.
In India, you are likely to be constantly under attack by agonised human beings - mothers with infants in their arms, small children, disabled, lepers and others. It is often difficult to turn a blind eye. More often than not, I would suggest ignore, harden yourself, say no firmly and walk away. But maybe sometimes you might want to give in to the tug of your heart - especially with the young children and the infirm. Keep small change for those occasions. If you are surrounded by many, again, be firm and say no.
It is true that most beggars are part of organised begging rings. So instead of money maybe you can ensure that a child gets one square meal a day. It isn't really much; the child doesn't go hungry and you will walk away feeling good.
So, my advice, look at each situation and decide how to deal with it. One thing I try and follow, if someone is providing a service - such as cleaning vehicles at the traffic junction, selling newspapers - I "buy" the service from them and give them a little more than what they expect (pay Rs 5 for a newspaper if the paper actually costs Rs 2).
I would not say it is "unsafe" to give. As in any other country, it is always good to be cautious.
After many months in India I stumbled on my preferred method:
I do like that this is a bit more respectful to the other person. However, the main advantage is that when I just ignored the person begging they would often continue following me and asking and every time I tried the above method they always moved on. Works like magic.
I second Ankur Banerjee's answer. Beggars in India can easily differentiate the foreigners (as they call) from Desi's (ie., Indians). They also have the knack to identify even from the locals, whom they can get money vs who will not give, its all by experience.
Needless to say they know the value of dollar, and I have seen beggars asking for a dollar when a foreigner gives them a rupee, and other beggars flock. This will also expose your valuables - most beggars are pickpocket-ers.
The best to do is to ignore them completely. Don't even look at them. I have given a rupee when in India, but the beggar was arrogant that he says give a dollar. Now-a-days beggars don't take food (New India) - one reason is locals give old or rotten stuff, and the beggars are careful about that. Secondly, with money they have more options on food, and other things - beggars also have mobile phone (say cellphone)
I read a book by Kiran Bedi called What Went Wrong - in one of the chapters, I remember a foreigner got trapped by just helping a beggar, who happened to be a drug smuggler. Again the police is also corrupted, that the foreigner could not prove himself, and got into various issues.
So be careful - better not to help, than to help and get into trouble. I usually donate to iskcon.org; they claim to educate and feed poor kids.
I do travel through the roads of India and find foreigners being flooded with beggars. It is better one avoids them. In few cases when one does go on to give some alms, it attracts few more from round the corner.
In the end, it is up to you to decide whom to give and whom not to. Local mafia's or black private org's leave beggars ranging from old aged to kids with babies in their hands, at busy places at the early hours. You can usually see many near traffic signals, etc. You can avoid giving them alms. Also remember you don't expose the costly gadgets or jewelry while traveling.
Being a native person here, I usually have walks on the roads, where I see foreigners offering some money to the beggars and then a group of beggars surrounding them asking for money. It could be a real trouble then.
You can't describe that the person asking you for money is really a beggar or some snatcher. Snatching cases are quite common in India (at least in our region). So it is better not to talk with beggars and keep moving.
Even if you really want to help a beggar, you can offer them some food or even clothes, because most of the male beggars beg money for the sake of drugs.