Rationing and Accuracy of Targeting in India: The Case of the Rural Employment Guarantee Act

Abstract

Rationing and its implication on accuracy of targeting of benefits to the intended beneficiaries in an anti-poverty programme is an essential component of its evaluation. Taking nationally representative data for 2009–2010 and 2011–2012, this paper evaluates the performance of the Rural Employment Guarantee Act in India in terms of targeting of benefits to the poorer households. It attempts to find if households, which did not get work after demanding are poorer than the ones, who got work and then explores, if the non-poor households got work for higher number of days under the programme in comparison to the poorer ones. Findings from the regressions, which control for the potential sample selection bias show that the poorer households in terms of monthly consumption expenditure have lesser probability of getting work in both the years, though traces of improvement in targeting is observed in 2011–2012. Poorer households are also found to be significantly associated with lower days of work in 2009–2010 compared to the relatively better-off ones. The results lay emphasis on the need to reduce rationing and generate awareness on the basic entitlements of the programme along with higher accountability and vigilance for better targeting.