
Encountering beggars during your trip to India is unavoidable.
I was going to write a blog post with information about the beggars mafia, what to do about children beggars, and how to handle the encounters, but it's all written very well in this post on About.com.
In short, the specific direction on what to do, is copied below:
If you want to give to beggars, only give 10-20 rupees at a time. Only give when you’re leaving a place, not arriving, to prevent being mobbed. Try to give to those who perform a service, such as small children who often dance or sing, or those that are elderly or crippled. Avoid giving to women with babies because the babies usually aren't theirs.
The rest of the article (not very long) is really informative and you should definitely read it. I just didn't want to steal the credit for Sharell's good writing. Please visit the original article and read it.
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