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Implementation of the National Rural Employment Guarantee Act in India: Spatial Dimensions and Fiscal Implications

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  • Pinaki Chakraborty

Abstract

Since its enactment in 2005, the National Rural Employment Guarantee Act (NREGA) has been implemented in 200 districts in India. Based on state-by-state employment demand-supply data and the use of funds released under NREGA, it is found that, although it is a demand-driven scheme, there are significant interstate differences in the supply of employment. The supply falls far short of demand, particularly in low-income states, where the organizational capacity to implement the scheme is limited. It is also noted that the NREGA-induced fiscal expansion has not contributed to higher fiscal imbalances. The consolidation of other public employment programs into NREGA has actually kept the total allocation of funds by the central government at a level no higher than those reached in the fiscal years 2002-03 to 2005-06. The NREGA fund utilization ratio varies widely across states and is abysmally low in the poorer states. Since the flow of resources to individual states is based on approved plans outlining employment demand, it may turn out to be regressive for the poorer states with low organizational capacity in terms of planning and management of the schemes, especially labor demand forecasting.

Suggested Citation

  • Pinaki Chakraborty, 2007. "Implementation of the National Rural Employment Guarantee Act in India: Spatial Dimensions and Fiscal Implications," Economics Working Paper Archive wp_505, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_505
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    Cited by:

    1. Arnab Basu, 2013. "Impact of rural employment guarantee schemes on seasonal labor markets: optimum compensation and workers’ welfare," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 1-34, March.
    2. Saswati Das, 2016. "Impact of MGNREGA on the livelihood security of rural poor in India: a study using national sample survey data," Oxford Development Studies, Taylor & Francis Journals, vol. 44(4), pages 420-440, October.
    3. Sanjiv Kumar & S. Madheswaran & B. P. Vani, 2021. "Response of Poverty Pockets to the Right-based Demand-driven MGNREGA Programme," Review of Development and Change, , vol. 26(1), pages 5-24, June.
    4. Ravi, Shamika & Engler, Monika, 2015. "Workfare as an Effective Way to Fight Poverty: The Case of India’s NREGS," World Development, Elsevier, vol. 67(C), pages 57-71.
    5. Salim Lakha & Durgam Rajasekhar & Ramachandra Manjula, 2015. "Collusion, Co-option and Capture: Social Accountability and Social Audits in Karnataka, India," Oxford Development Studies, Taylor & Francis Journals, vol. 43(3), pages 330-348, September.
    6. Sarabjeet D. Natesan & Rahul R. Marathe, 2021. "MGNREGA Implementation in Tamil Nadu: Voices from the fields," Indian Journal of Human Development, , vol. 15(1), pages 128-137, April.
    7. Satadru Das & Naci Mocan, 2020. "Analyzing The Impact Of The World'S Largest Public Works Project On Crime," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1167-1182, July.

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