Should India do away with the MGNREGA?

Abstract

Given the reverses the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) suffered in 2014–15, it seemed likely that the programme may be shut down. However, following vehement protests both within and outside Parliament, the Government of India decided to finally throw its full weight behind the programme. Nevertheless, should not development economists address the critiques against the programme and assess whether it is really worth spending such large sums of money on it every year? This paper responds to the various facets of the critique against MGNREGA. In the very nature of our response to the critique lies a vision for the programme going ahead. Our response can be sustained only on the basis of that vision. The paper provides a detailed explanation of why we reject the fundamental critiques of MGNREGA. At the same time, we accept many of the internal critiques as extremely important. The MGNREGA may be described as “both a major success and a huge failure”. But it would be wrong, therefore, to throw the baby out with the bathwater. Rather, the key is to learn from the successes of MGNREGA through a careful analysis of the conditions that have made these successes possible. The paper ends with an outline of the unfinished agenda for MGNREGA reform, without which its true potential will continue to remain unfulfilled.