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Impact of MGNREGA on Consumption Expenditure of Households

This study attempts to quantify the impact of the Mahatma Gandhi National Rural Employment Guarantee Act programme on the level and pattern of consumption expenditure of rural households at the national level using a difference-in-differences method. The findings indicate an increase in the monthly per capita consumption expenditure of participant households and a change in their consumption patterns with the share of high-value and nutrient-rich food in their consumption basket going up. Further the participant households have also smoothened their consumption by investing in assets such as durable goods.

Improving capabilities, assets and activities that rural people require for subsistence or for improving livelihoods has been a central agenda for the Government of India for many decades. One important reason for this is the persistence of high levels of poverty across the country. This is brought out even in the most recent expert group report on measurement of poverty chaired by C Rangarajan, which estimated the total number of poor to be 363 million in 2011–12 (GOI 2014). Such high poverty levels have persuaded successive governments to launch several poverty alleviation programmes over the past few decades. Some of these programmes include the Integrated Rural Development Programme (IRDP), Employment Assurance Scheme (EAS), Pradhan Mantri Rojgar Yojana (PMRY), Swarnajayanti Gram Swarojgar Yojana (SGSY) and Pradhan Mantri Gramodaya Yojana (PMGY).

The most recent poverty alleviation programme was launched after the enactment of the National Rural Employment Guarantee Act, 2005, which was later renamed Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2009. The MGNREGA programme is the largest and most ambitious social security and public works programme in the world. The act was initially implemented in the 200 most backward districts of the country from February 2006 and subsequently extended to all the districts in two phases. The main objective of the programme is to enhance livelihood security of the rural poor by providing at least 100 days of guaranteed wage employment annually to every household whose adult members volunteer to do unskilled manual work. In addition to employment the act also seeks to create durable assets and strengthen the livelihood resource base of the rural poor.

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Updated On : 28th Sep, 2020

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