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Is There a Case for the Employment Guarantee Scheme in India? Some Recent Evidence

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Author Info
Raghav Gaiha
Abstract

Overall participation in the Employment Guarantee Scheme (EGS) in Maharashtra (an Indian state) fell sharply over the period 1980-97. Some of this reduction was due to expansion of irrigation facilities leading to expansion of farm employment. Alongside, expansion of non-farm employment led to a further reduction in the demand for the EGS. Although there was a slight rise in participation in subsequent years, it was dampened by a change in the composition of the EGS. Specifically, substitution of community assets (e.g. soil conservation works) by individual assets (e.g. wells) involved fewer workers. The official explanation for the decline in EGS participation in recent years in terms of expansion of farm and non-farm employment opportunities is thus partly valid. In some of the poorer regions (e.g. tribal villages), however, the EGS continues to confer significant transfer and stabilisation benefits during long seasonal slacks. As alternative employment options are few and far between, the dependence on the EGS is unavoidably high for those who are able to participate in it. If the overall participation rates are low, it is partly a consequence of the nature of projects undertaken and low outlays and not so much a result of slackening of demand for the EGS. A case therefore is made for enhanced outlays under the EGS with a substantially higher reallocation in favour of the poorest regions.

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Paper provided by Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2004-09.

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Length: 24
Date of creation: 2004
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Handle: RePEc:pas:asarcc:2004-09

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Keywords: Participation transfer and stabilsation benefits backward regions poverty.

Find related papers by JEL classification:
D3 - Microeconomics - - Distribution
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)

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  1. Katsushi Imai & Pasquale Scandizzo & Raghav Gaiha, 2003. "Option Values, Switches and Wages - An Analysis of the Employment Guarantee Scheme in India," Economics Series Working Papers 164, University of Oxford, Department of Economics. [Downloadable!]
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  2. Gaiha, Raghav, 2000. " On the Targeting of the Employment Guarantee Scheme in the Indian State of Maharashtra," Economic Change and Restructuring, Springer, vol. 33(3), pages 203-19. [Downloadable!] (restricted)
  3. Raghav Gaiha, 1997. "Do rural public works influence agricultural wages? The case of the employment guarantee scheme in India," Oxford Development Studies, Taylor and Francis Journals, vol. 25(3), pages 301-314. [Downloadable!] (restricted)
  4. T. N. Srinivasan, 1994. "Destitution: A Discourse," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1842-1855, December. [Downloadable!] (restricted)
  5. Raghav Gaiha, 2000. "Do Anti-poverty Programmes Reach the Rural Poor in India?," Oxford Development Studies, Taylor and Francis Journals, vol. 28(1), pages 71-95. [Downloadable!] (restricted)
  6. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-61, March. [Downloadable!] (restricted)
  7. Baland, Jean-Marie & Dreze, Jean & Leruth, Luc, 1999. "Daily wages and piece rates in agrarian economies," Journal of Development Economics, Elsevier, vol. 59(2), pages 445-461, August. [Downloadable!] (restricted)
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  8. Pranab Bardhan, 1996. "Decentralised Development," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 31(2), pages 139-156, July.
  9. Subramanian, Shankar & Deaton, Angus, 1996. "The Demand for Food and Calories," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 133-62, February. [Downloadable!] (restricted)
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  10. Raghav Gaiha & Katsushi Imai, 2002. "Rural Public Works and Poverty Alleviation--the case of the employment guarantee scheme in Maharashtra," International Review of Applied Economics, Taylor and Francis Journals, vol. 16(2), pages 131-151, April. [Downloadable!] (restricted)
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