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Targeting Accuracy of the NREG: Evidence from Madhya Pradesh and Tamil Nadu

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  • Raghbendra Jha
  • Raghav Gaiha
  • Shylashri Shankar
  • Manoj K. Pandey

Abstract

This paper focuses on the targeting accuracy of NREG in two Indian states, Madhya Pradesh (MP) and Tamil Nadu (TN), based on household data for 2008–09. In order to overcome the difficulties arising from the use of a headcount index and a specific poverty threshold, stochastic dominance tests are used. Madhya Pradesh demonstrated much better targeting than Tamil Nadu in terms of the FGT class of poverty indices over a wide range of poverty thresholds. This finding is significant as the proportion of poor is twice as high in the former as in the latter. It raises doubts about prevailing views that there is greater underprovision of jobs under NREG in the poorer states. That the selfselection of the poor was undermined and (relatively) affluent crowded in because of the high NREG wage (relative to the agricultural wage) raises a serious concern. Another serious concern is that the transfer benefits in the form of additional income to the poor were small mainly due to short spells of work, considerably lower than the maximum number of days permitted under this scheme.

Suggested Citation

  • 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.
    • Handle: RePEc:pas:asarcc:2010-19
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    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2010/WP2010_19.pdf
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    References listed on IDEAS

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    1. Raghav Gaiha & Vani S. Kulkarni & Manoj K. Pandey & Katsushi S. Imai, 2009. "National Rural Employment Guarantee Scheme, Poverty and Prices in Rural India," ASARC Working Papers 2009-03, The Australian National University, Australia South Asia Research Centre.
    2. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
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    Cited by:

    1. Tandel, Vaidehi & Hiranandani, Komal & Kapoor, Mudit, 2019. "What’s in a definition? A study on the suitability of the current urban definition in India through its employment guarantee programme," Journal of Asian Economics, Elsevier, vol. 60(C), pages 69-84.
    2. Das, Upasak, 2015. "Does Political Activism and Affiliation Affect Allocation of Benefits in the Rural Employment Guarantee Program: Evidence from West Bengal, India," World Development, Elsevier, vol. 67(C), pages 202-217.
    3. Sagarika Dey, 2017. "Assessing the Poverty Impact of India’s Largest Livelihood Security Programme: A Study Based on 68th Round of NSSO," Journal of Development Policy and Practice, , vol. 2(1), pages 56-70, January.
    4. Chau, Nancy H. & Liu, Yanyan & Soundararajan, Vidhya, 2021. "Political activism as a determinant of strategic transfers: Evidence from an indian public works program," European Economic Review, Elsevier, vol. 132(C).

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    More about this item

    Keywords

    Employment Guarantee; Poverty; Self-Selection; Wage; India;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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