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Impact of Mahatma Gandhi National Rural Employment Guarantee Program on Rural Poor - A Simple Theoretical Discourse

Author

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  • Kundu, AMIT
  • Talukdar, SANJIB

Abstract

The basic objective of the Mahatma Gandhi National Rural Employment Guarantee Program (MGNREGP) is to provide safety net for the rural poor and to stabilize agricultural production through creating productive assets via employing labourers. Two important linked aspects are worth noting in respect of implementation of the program. Implementation of MGNREGP in multiple cropping areas can increase the employment opportunities among the landless agricultural labourers and thus has inevitably raised their bargaining power particularly during the time of second crop i.e. post rainy season cultivation. Besides this, Government of India has persistently been hiking per man-day MGNREGP wage. Both these instances undoubtedly increase the reservation wage in agricultural labour market which in turn may have an adverse effect on the farm income in the multi-cropping areas. In this paper, maximum possible per man-day MGNREGP wage is determined at which the corresponding agricultural wage can help the marginal farmers to sustain their net farm income at least at subsistence level. This paper also establishes the fact that as a result of the hike of MGNREGP wage, sustenance of subsistence net farm income may lead to price hike in agricultural sector. The study also attempts to analyze the results in respect of aggregate net pecuniary benefits of the rural poor in the light of MGNREGP considering different agricultural frameworks.

Suggested Citation

  • Kundu, AMIT & Talukdar, SANJIB, 2014. "Impact of Mahatma Gandhi National Rural Employment Guarantee Program on Rural Poor - A Simple Theoretical Discourse," MPRA Paper 66237, University Library of Munich, Germany, revised 19 Mar 2015.
    • Handle: RePEc:pra:mprapa:66237
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    References listed on IDEAS

    as
    1. Arnab Basu, 2013. "Impact of rural employment guarantee schemes on seasonal labor markets: optimum compensation and workers’ welfare," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 1-34, March.
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    Cited by:

    1. Amit Kundu & Sanjib Talukdar, 2016. "Influence of NREGS on Agricultural Wage Determination in West Bengal: A Dynamic Panel Approach," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(3), pages 381-396, September.

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    More about this item

    Keywords

    National Rural Employment Guarantee Programme; Agricultural Labour Market; Net farm income; Aggregate net benefit; Material cost;
    All these keywords.

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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