India’s Rural Employment Program is Dying a Death of Funding Cuts

Ten years ago this week, the Indian parliament unanimously passed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It was a historic legislation based on two interlinked goals: ensuring livelihood security to rural residents by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work; and using the programme to mobilise existing surplus labour in the countryside, to unleash productive forces and generate more economic growth in rural areas.

The treatment of employment as a right of citizens that must be delivered by the state involved a crucial reversal of the underlying basis of public delivery in India, which has mostly been driven by a paternalistic view of the state as delivering “gifts” to the people.

Obviously, such a major transformation was never going to be easy, and there have been concerns about corruption and unevenness in implementation across states. Even so, the programme has had several tangible positive effects (pdf): increasing rural wages and reducing gender wage gaps; smoothing and stabilising consumption by poor people; enabling better access to nutrition, health and education; increasing financial inclusion because of payments through bank accounts; and reducing distress migration. In some places it has helped to improve rural connectivity and agricultural productivity by creating more sustainable forms of irrigation and production. It has also served as a built-in stabiliser of the economy during downturns.

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By: Photo Credit: Krishnendu Halder/Reuters

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