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

Author

Listed:
  • 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.

Suggested Citation

  • 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.
    • Handle: RePEc:pas:asarcc:2009-03
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    Cited by:

    1. Clément Imbert & John Papp, 2012. "Equilibrium Distributional Impacts of Government. Employment Programs: Evidence from India's Employment Guarantee," PSE Working Papers halshs-00680451, HAL.
    2. Shah, Deepak K. & Mohanty, Sovna, 2010. "Implementation of NREGA During Eleventh Plan in Maharashtra: Experiences, Challenges and Ways Forward," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 65(3), pages 1-12.
    3. Raghbendra Jha & Raghav Gaiha & Shylashri Shankar & Manoj K Pandey, 2013. "Targeting Accuracy of the NREG: Evidence from Madhya Pradesh and Tamil Nadu," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 25(5), pages 758-777, December.
    4. Deepak, Shah, 2012. "Implementation of NREGA in Maharashtra: experiences, challenges and ways forward," MPRA Paper 39270, University Library of Munich, Germany.

    More about this item

    Keywords

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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