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National Rural Employment Guarantee Scheme, Poverty and Prices in Rural India

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  • Raghav Gaiha
  • Vani S. Kulkarni
  • Manoj K. Pandey
  • Katsushi S. 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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File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2009/WP2009_03.pdf
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Bibliographic Info

Paper provided by The Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2009-03.

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Length: 36
Date of creation: 2009
Date of revision:
Handle: RePEc:pas:asarcc:2009-03

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Keywords: Employment Guarantee; NREGS; wages; demand; supply; poverty; prices; India;

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References

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  1. Jha, Raghbendra & Gaiha, Raghav & Sharma, Anurag, 2009. "Calorie and Micronutrient Deprivation and Poverty Nutrition Traps in Rural India," World Development, Elsevier, vol. 37(5), pages 982-991, May.
  2. Raghav Gaiha, 2000. "Do Anti-poverty Programmes Reach the Rural Poor in India?," Oxford Development Studies, Taylor & Francis Journals, vol. 28(1), pages 71-95.
  3. Raghbendra Jha & Sambit Bhattacharyya & Raghav Gaiha & Shylashri Shankar, 2008. "Capture of Anti-Poverty Programs: An Analysis of the National Rural Employment Guarantee Program in India," ASARC Working Papers 2008-07, The Australian National University, Australia South Asia Research Centre.
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Cited by:
  1. Raghbendra Jha & Raghav Gaiha & Shylashri Shankar & Manoj K. Pandey, 2010. "Targeting Accuracy of the NREG: Evidence from Madhya Pradesh and Tamil Nadu," ASARC Working Papers 2010-19, The Australian National University, Australia South Asia Research Centre.
  2. Clément Imbert & John Papp, 2012. "Equilibrium Distributional Impacts of Government. Employment Programs: Evidence from India's Employment Guarantee," Working Papers halshs-00680451, HAL.
  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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