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Assessing the Poverty Impact of India’s Largest Livelihood Security Programme: A Study Based on 68th Round of NSSO

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  • Sagarika Dey

Abstract

The enactment of India’s historic livelihood guarantee programme in the form of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) has been coterminous with a phase of rapid decline in India’s rural poverty rates. This naturally motivates the question as to whether the observed decline in rural poverty can be attributed, at least partly, to efficient targeting and implementation of Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). This study underscores the fact that the welfare impact of anti-poverty programmes such as the MNREGS is critically dependent on whether these programmes actually reach the intended beneficiaries. Using the unit-level data from the 68th round of the NSSO survey on Employment and Unemployment, the article first investigates the possible ‘capture’ of the MNREGS at the national and also at the state levels and the consequent ‘crowding out’ of asset poor rural households. Statistical analysis of household data reveals that although at the national level, the scheme seems to be predominantly directed towards the poor, considerable variations exist among states. After correcting for confounders in treatment and control groups, the study finds that access to MNREGS employment significantly lowers the probability of a rural household of falling in the poverty trap. The article, therefore, concludes that the scheme has the potential of favourably impacting and protecting consumption standards among rural poor. Maximisation of this potential, however, would depend upon proper identification of needy households and rooting out of the pseudo-poor from the ambit of the programme.

Suggested Citation

  • Sagarika Dey, 2017. "Assessing the Poverty Impact of India’s Largest Livelihood Security Programme: A Study Based on 68th Round of NSSO," Journal of Development Policy and Practice, , vol. 2(1), pages 56-70, January.
  • Handle: RePEc:sae:jodepp:v:2:y:2017:i:1:p:56-70
    DOI: 10.1177/2455133316671801
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    References listed on IDEAS

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    1. Jha, Raghbendra & Bhattacharyya, Sambit & Gaiha, Raghav & Shankar, Shylashri, 2009. ""Capture" of anti-poverty programs: An analysis of the National Rural Employment Guarantee Program in India," Journal of Asian Economics, Elsevier, vol. 20(4), pages 456-464, September.
    2. 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.
    3. Isha Dewan & Rohini Somanathan, 2004. "Poverty targeting in public programs: A comparison of alternative nonparametric methods," Discussion Papers 04-16, Indian Statistical Institute, Delhi.
    4. Raghav Gaiha & Katsushi Imai & P. D. Kaushik, 2001. "On the Targeting and Cost‐Effectiveness of Anti‐Poverty Programmes in Rural India," Development and Change, International Institute of Social Studies, vol. 32(2), pages 309-342, March.
    5. Kosuke Imai & Marc Ratkovic, 2014. "Covariate balancing propensity score," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 76(1), pages 243-263, January.
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    1. Parmar, Divya & Banerjee, Aneesh, 2019. "Impact of an employment guarantee scheme on utilisation of maternal healthcare services: Results from a natural experiment in India," Social Science & Medicine, Elsevier, vol. 222(C), pages 285-293.

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