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Mahatma Gandhi National Rural Employment Guarantee Act: A Catalyst for Rural Transformation

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Since 2000, the Indian economy has experienced more rapid economic growth, including even a few years of near double-digit growth, and a sharp decline in poverty. In spite of these striking GDP growth achievements, growth in employment has been much slower. As importantly, although the contribution of agriculture to the Indian economy is only 18 percent, agriculture continues to employ 47 percent of workers. This has led to the concentration of workers, particularly women, into poorly paying work such as collecting forest produce or being unable to find wage work outside of the peak agricultural season. The Mahatma Gandhi National Rural Employment Guarantee Act of 2005 emerged in response to this growing divergence between economic growth and rural job creation. It is designed to provide 100 days of work to any rural household that demands work. MGNREGA, as this program has come to be known, incites strong passions. For activists demanding the right to work, this program is seen as a panacea for rural poverty, particularly if its implementation can be improved to ensure that it reaches all vulnerable sections of India’s rural economy. But many economists are concerned about the ineffectiveness of the program, its fiscal costs, leakages, and its unintended consequences leading to rural and urban labour shortages and possibly poor, long-term, lifetime chances for beneficiaries. Using unique data from the India Human Development Survey, a large, repeated, national household survey conducted by researchers from the National Council of Applied Economic Research and the University of Maryland before and after the implementation of MGNREGA, this report examines changes in the lives of rural households and in the rural economy against the backdrop of changes brought about by the programme.
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... It is the responsibility of the local government (Panchayat) to ensure these guidelines are met. However, the panchayats have failed to deliver on these promises because of a higher preference for male participants and seeking cost reductions for childcare facilities, respectively (Desai et al., 2015;Siddhartha, 2008). Therefore, there is a need for a higher level of governance (District administration and state government) to actively evaluate the performance of the programme at a ground level through regular field investigations. ...
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