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Rural Job Scheme Empowered Women
Aug 18, 2015

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) reduced poverty by up to a third, gave a large number of women their first opportunity to earn income in cash, reduced reliance on moneylenders, and did not significantly affect rural wages.

Ministry of Rural Development and the National Council of Applied Economic Research (NCAER) recently released a new report, which used data from two rounds of the India Human Development Survey (IHDS)—2004-05 and 2011-12—conducted by the NCAER and the University of Maryland. Over 26,000 rural households nationwide were interviewed both times.

Key Points of the Report

  • Comparisons of the two rounds of the survey found that the programme reduced poverty overall by up to 32 per cent and prevented 14 million people from falling into poverty.

  • Economic growth contributed to overall poverty reduction during this period and MGNREGS played a significant role.

  • The numbers show that the MGNREGS is likely to have had a much smaller impact on the rural job market and rural wages than is commonly believed. 

  • At an all-India level, the average days worked under the MGNREGS are fewer than four, pointing to the relatively small impact of the scheme on the overall rural job market.

  • On the surface, the MGNREGS has virtually no impact on rural employment patterns since it fails to add to the number of days that individuals work. But it seems to attract individuals who were previously employed in less productive work, thereby raising their incomes.

  • Overall, while the period from 2004-05 to 2011-12 saw a sharp rise in rural wages, the MGNREGS played only a modest role in the increase of wages. 

  • The United Nations Development Programme also released a review of recent research studies on the MGNREGS. It found that the scheme’s uptake was far greater in the lean season that in the peak agricultural season.

  • The part of the rural job market that the MGNREGS seemed to have a more significant impact on was female work. About 45 per cent of female workers were either not working or worked only on a family farm in 2004-05, indicating that the scheme may well be the first opportunity many women got to earn cash income.

  • There was a substantial increase in women’s control over resources, including cash in hand and the likelihood of having a bank account, and improvement in women’s ability to make independent decisions about their health.

  • What holds the MGNREGS back is work rationing—the inability of all interested households to get 100 days of work—as a result of mismanagement or pressures, and affects the poor the most.

These findings clearly show that there is a large unmet demand for MGNREGS work but paucity of funds at the level of implementation and erratic fund flows, particularly in 2014-15, had affected both demand and supply.

 


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