Rural Employment Scheme and Agricultural Wage Rate Nexus: An Analysis across States §

Abstract

This paper on Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has covered two objectives; one, whether the introduction of MGNREGS has increased the wage rates for agricultural labourers across the states and two, if so what are the factors that determine the growth rate of wages for farm labourers. The study is based on the secondary data on farm wages published by the Labour Bureau of India by gender and farm operation across the states and has covered the period 2000–01 to 2010–11. To present a comparative picture, the study period has been divided into two sub-periods, viz. pre-MGNREGS (2000–01 to 2005–06) and post-MGNREGS (2005–06 to 2010–11). The study has shown that the real wage rates have increased substantially during post-MGNREGS period as compared to pre-MGNREGS period for both male and female agricultural labourers in all the major farming operations. The rate of increase in wage rates has been found to be higher across the female agricultural labourers as compared to their male counterparts. The regression analysis has suggested that the average days of employment per household by MGNREGS, productivity of foodgrains, and road density have positively fuelled the growth rate of wages for both male and female farm labourers.