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LATEST NEWS UPDATES | Safety Net That Works -Shonar Lala

Safety Net That Works -Shonar Lala

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published Published on Jun 5, 2019   modified Modified on Jun 5, 2019
-The Indian Express

Before contemplating new rural programmes, government must expand MGNREGA

In the run up to the elections, a plethora of redistributive programmes, including farm loan waivers, cash transfers and minimum income guarantees came to the forefront as campaigners sought to balm rural distress. Amongst these is a proposal to launch a revised NREGA 3.0, in which 150 days of employment would be guaranteed to the rural poor. Almost 15 years after it was enacted, the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) still makes waves in the news, but very little is known about its impact on the poor. Has the world’s largest workfare programme worked?

To elicit a fair answer to this question begs another question. What does the NREGA intend to do? Enacted as a legal right, the NREGA’s primary goal is social protection for the most vulnerable. But like all good things, expectations of the programme have ballooned — with some believing it could even enable most poor households in rural India to cross the poverty line. Measured against such ambitious objectives, any workfare programme would most likely not live up to its expectations. But India has had relative success with workfare, with the Maharashtra Employment Guarantee Scheme being the most important precursor to the NREGA.

The primary advantage of workfare programmes over farm loan waivers, cash transfers and minimum income programmes is that the poor self-select themselves into the programme, thus reducing the identification costs. The ability of a programme to parsimoniously target the ultra-poor without elaborate means testing is critical for its long-term success, particularly when fiscal resources are scarce.

Crucially, the most basic tenet of the NREGA — its self-targeting mechanism — does work. Poorer and disadvantaged households are more likely to seek NREGA work. In practice, however, not all those who demand NREGA work receive it. In 2009/10, almost half the households in rural India wanted NREGA jobs but only a quarter received them, according to estimates by Liu and Barrett (2016). More recently, employment provided under NREGA in 3,500 panchayats in 2017/18 was a third less than that demanded.

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The Indian Express, 4 June, 2019, https://indianexpress.com/article/opinion/columns/mgnrega-minimum-income-program-rural-employment-nyay-5763291/


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