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

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  • 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.

Suggested Citation

  • Raghav Gaiha, 2004. "Is There a Case for the Employment Guarantee Scheme in India? Some Recent Evidence," ASARC Working Papers 2004-09, The Australian National University, Australia South Asia Research Centre.
    • Handle: RePEc:pas:asarcc:2004-09
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    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2004/WP2004_09.pdf
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    Cited by:

    1. Abhay Pethe & Mala Lalvani, 2005. "Fiscal Health Of Maharashtra: A Stock Taking Exercise," Department of Economics, University of Mumbai, Mumbai Working Papers 17, Department of Economics, University of Mumbai, Mumbai.
    2. Pethe, Abhay & Lalvani, Mala, 2005. "Fiscal situation in Maharashtra: An assessment, a critique, and some policy suggestions," Working Papers 05/28, National Institute of Public Finance and Policy.
    3. repec:ind:nipfwp:28 is not listed on IDEAS
    4. repec:npf:wpaper:28 is not listed on IDEAS

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    More about this item

    Keywords

    Participation; transfer and stabilsation benefits; backward regions; poverty.;
    All these keywords.

    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, Well-Being, 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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