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National rural employment guarantee scheme, poverty and prices in rural India

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  • Raghav Gaiha
  • Vani Kulkarni
  • Manoj Pandey
  • Katsushi Imai

Abstract

The objective of this analysis is mainly to construct an intuitive measure of the performance of the National Rural Employment Guarantee Scheme (NREGS) in India -a nation-wide poverty alleviation programme which was introduced in 2005. The focus is on excess demand at the district level. Some related issues addressed are (i) whether excess demand responds to poverty, and (ii) whether recent hikes in NREGS wages are inflationary. Our analysis confirms responsiveness of excess demand to poverty. Also, apprehensions expressed about the inflationary potential of recent hikes in NREGS wages have been confirmed. More importantly, higher NREGS wages are likely to undermine self-selection of the poor in it. So, in order to realise the poverty reducing potential of this scheme, a policy imperative is to ensure a speedier matching of demand and supply in districts that are highly poverty prone, as also to avoid the trade-offs between poverty reduction and inflation.

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Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 0908.

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Date of creation: 2009
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Handle: RePEc:man:sespap:0908

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Cited by:
  1. Raghbendra Jha & Raghav Gaiha & Shylashri Shankar & Manoj K Pandey, 2013. "Targeting Accuracy of the NREG: Evidence from Madhya Pradesh and Tamil Nadu," The European Journal of Development Research, Palgrave Macmillan, vol. 25(5), pages 758-777, December.
  2. repec:hal:wpaper:halshs-00680451 is not listed on IDEAS
  3. Clément Imbert & John Papp, 2012. "Equilibrium Distributional Impacts of Government. Employment Programs: Evidence from India's Employment Guarantee," PSE Working Papers halshs-00680451, HAL.

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