Home / Politics / Policy /  MGNREGS has raised welfare, brought down inequality, says study

NEW DELHI : At a time when political parties across the spectrum are searching for ways to provide cash transfers to rural and poor Indians, one such policy, started more than a decade ago, has come in for praise from a new study.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) was launched in 2006 to provide 100 days of employment to villagers in the lean season, effectively working as a conditional cash transfer programme.

That scheme seems to have improved the well-being of beneficiaries significantly in Andhra Pradesh, a research paper by Klaus Deininger of the World Bank and Yanyan Liu of the International Food Policy Research Institute (IFPRI) published in the World Development journal shows.

In their study, the duo explored the welfare effects of MGNREGS on direct beneficiaries in five districts of Andhra Pradesh, soon after the scheme was first introduced in 2006.

They find that participants in districts where the scheme was initiated had improved nutritional intake and were able to make more investments in household assets, compared with participants who did not benefit from the scheme.

Using data from a household panel, the authors show that the MGNREGS participants had significantly increased energy and protein intake within a year of participation in the scheme.

Participants with a two-year exposure were able to accumulate more household assets and livestock.

These benefits were most pronounced for disadvantaged groups such as scheduled castes (SCs), scheduled tribes (STs) and poor households.

Families which had differently abled members and women as head of the household were especially benefited.

Deininger and Liu argued that increased income from work opportunities provide the channels for better well-being outcomes.

The authors suggested that MGNREGS was effective in reducing poverty and inequality.

However, effective implementation, coupled with accountability, were key.

Andhra Pradesh has a good track record in implementation due to periodic social audits and computerization, and is, therefore, a good example to follow for other states, the authors suggested.

Also read: Heterogeneous welfare impacts of National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh,India.

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