Impact of rural guaranteed work scheme in India discussed at PEP national policy conference

November 26, 2016 | Guwahati, India

A team of local PEP researchers held a national policy conference to discuss their findings and recommendations regarding the Indian government’s rural guaranteed work scheme.

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November 26, 2016 – Local PEP researchers held a national policy conference in Guwahati, India, to share and discuss their findings and recommendations regarding the government’s rural guaranteed employment scheme.

Organized in collaboration with the Indian Society of Labour Economics (ISLE) as part of the 58th Annual Conference of ISLE, 34 key stakeholders attended including representatives of the Indian Ministry of Rural Development, the Assam Department of Panchayati Raj and Rural Development, and the International Labour Organization  (ILO) as well as a number of specialist labor economists.

The conference provided an opportunity for the team to inform policymakers and researchers about both the findings and recommendations from the team’s study, selected under the PAGE initiative in 2015.

In this study, the team created a CGE model of the Indian economy and a social accounting matrix for 2007-2008 to simulate four funding scenarios and evaluate the impact of the national government’s rural guaranteed employment scheme on the Indian economy. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides 100 days of guaranteed wage employment each financial year to rural households whose adult members volunteer to do unskilled manual work under the program.

The team’s analysis indicates that withdrawing the program would decrease GDP, wages for semi-skilled labourers, the supply of unskilled labour, and household income. Similar outcomes are also found when 20% of MGNREGA spending is reallocated to education, health, or public administration. Find out more about the research methods, findings and policy recommendations in PEP Policy Brief 153.

 

Main outcomes

Following the team’s presentation, those present were invited to discuss the findings and recommendations. A number of key stakeholders stated their appreciation of the study and indicated that the evidence it provides, particularly in the case of the first simulation that explains the key macroeconomic impacts of MGNREGA, is important for future policy decisions.

The representative of the national Ministry of Rural Development, Mr. Majid Pandit, showed particular interest in the findings and said that they would be very useful for the Ministry’s policy design. Dr. Sher Verick, the ILO representative, reiterated the relevance of modelling public work programs for policy design.

Thanks to the collaboration with the Indian Society of Labour Economics, the event and research findings will be published on the ISLE website and in the Indian Journal of Labour Economics. Additionally, the New Delhi Institute for Human Development – where the study was conducted – will also disseminate the key findings through its website, mailing list and social media channels. 

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