Limiting MGNREGS to poorest districts will not help, finds survey

Targeting households rather than districts may be more effective, says NCAER official

Updated - April 07, 2016 05:32 am IST

Published - December 08, 2014 03:46 am IST - NEW DELHI

Would confining India’s flagship rural jobs scheme to the 200 poorest districts direct the benefits to those who need it most? New data indicates that this is unlikely to be the case — little separates India’s poorest districts from others, and both sets rely on the scheme.

In early October, reports surfaced that the Union government was considering restricting the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to India’s 200 poorest districts to reduce its financial burden. Rural Development Minister Chaudhary Birender Singh told the Rajya Sabha in November that no such decision had been taken yet.

Now, new yet-to-be-published data from the 2011-12 India Human Development Survey (IHDS) conducted by the National Council for Applied Economic Research (NCAER) and the University of Maryland shows that when it comes to key indicators of marginalisation, there is not a lot to separate these districts from India’s other 476.

India’s largest non-governmental household study, the IHDS, is a nationally representative dataset. In all, nearly 70 per cent of India’s poor live in better-off districts, the IHDS found.

The average household in the 200 poorest districts is not poorer by much. Splitting India’s income distribution into five classes, the IHDS found that 22 per cent of people in the poorest districts were in the bottom fifth, as against 19 per cent in the other districts. Also, both the 200 poorest and the other districts have a similar share of marginalised populations.

Both sets of districts currently use the MGNREGS; 28 per cent of rural households in the poorest districts and 23 per cent of the other districts have participated in the scheme. Among the households which participated, a slightly larger proportion of their income comes from MGNREGS in India’s better-off districts than in the poorest. “In the poorest districts, people are trying harder to piece together a livelihood with many different jobs. So, when they work in MGNREGA, they also have other work. In better-off districts, some people find better jobs. Those who are left out find work under MGNREGA programmes and are consequently more reliant on them,” Sonalde Desai, senior fellow at NCAER and professor of sociology at the University of Maryland, explained.

“Results from the IHDS suggest that targeting districts is likely to be ineffective and that it may be better to target households,” Ms. Desai wrote in a policy brief that will be published on Monday.

Reducing the number of districts would “run against a fundamental premise of the Act: gainful employment that affords basic economic security is a human right.” 28 economists wrote recently to Prime Minister Narendra Modi.

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