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LATEST NEWS UPDATES | Dent in anti-poverty scheme due to NREGS: report

Dent in anti-poverty scheme due to NREGS: report

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published Published on Feb 14, 2013   modified Modified on Feb 14, 2013
-The Hindu

Hyderabad: An anti-poverty project to transform the lives of ultra poor families has failed to make an impact and increase the net income of the targeted families in Medak district in the State at the end of four years.

The project sponsored by the World Bank and the Ford Foundation was aimed at graduating 426 households from extreme poverty to a more stable state by enabling them establish micro-enterprises through regular cash flows. The households without a male earning member and having ownership of less than an acre of land were selected in 103 villages for implementing the project.

On each ultra poor household around Rs.17,860 was spent for providing microenterprise assets and imparting training. Most of the beneficiaries preferred livestock as assets. Besides asset transfer and livelihood support, it envisaged financial access and savings in the long term.

According to Shamika Ravi, Assistant Professor of Economics and Public Policy at the Indian School of Business (ISB), here, who carried out an evaluation of the project, there was no net impact in the selected households, compared with those in the control group. There was no significant impact of the programme on income, consumption and asset accumulation. In fact, half the beneficiaries were found to have sold their assets and joined the causal labour work.

The same programme launched in eight other countries – Pakistan, Bangladesh, Peru, Honduras, Haiti, Ethiopia, Yemen and Ghana -- was successful in most other places and the income of the beneficiaries went up by 15 per cent.

In India, the project did not make an impact as the rural labour market was changing in a big way with the implementation of the National Rural Employment Guarantee Scheme (NREGS). The scheme caused increase in rural wages, which in turn raised the costs for running microenterprises and led to their being shut down.

Dr. Shamika said NREGS was a very good scheme. “But if you think of growth (making enterprise), doing casual labour cannot be the way.” She said regular employment and not casual labour was the way for growth.

NREGS should be designed in such a way that it would not hinder microenterprise. But the disturbing trend was self-employment was coming down and causal labour going up.

She said NREGS reduced rural migration. But in the long-term people could not be confined to rural areas forever, she observed.

The Hindu, 14 February, 2013, http://www.thehindu.com/todays-paper/dent-in-antipoverty-scheme-due-to-nregs-report/article4413370.ece


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