Does MGNREGS Promote Inclusive Growth? What do Evidence Indicate?

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in India seeks to provide a specified number of days of employment at a specified wage rate to interested rural households, and ensures equal wages between male and female workers. MGNREGS will benefit wage seekers directly by providing assured employment and pay, which will enhance their purchasing power; and indirectly by increasing the rural market wage rate. The nature of work of some employment opportunities under MGNREGS will likely improve the infrastructure at both community and individual levels, mostly of small-scale and marginal farmers, which is expected to improve the income levels of the poor. Using evidence from Andhra Pradesh before its bifurcation, the present study sought to determine if MGNREGS promotes inclusive growth. The empirical study used both primary and secondary data. The analyses reveal that MGNREGS promotes inclusive growth by augmenting openmarket wages, reducing gender wage differentials, increasing the proportion of Scheduled Castes among the participating households, improving the employment and income levels of wage seekers, and deriving substantial benefits compared to government expenditure on the Scheme.