The economic impact of the Mahatma Gandhi National Rural Employment Guarantee Act: A case study of the Bajju Sub-Division of Bikaner District in Rajasthan

Abstract

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a program for poverty alleviation and an employment generation which provides employment to rural unskilled labourers. It can provide a guarantee of 100 days’ paid employment in a financial year to a rural unskilled labourer who demands it. The program also helps to reduce hunger in rural India. It is different from earlier wage employment programs because it provides a guarantee for work, whereas earlier programs had no such provisions. This paper analyses the employment, consumption and income effects of MGNREGA, including the resulting increase in the purchasing power of rural labourers, after its introduction in the rural area. It also examines the economic and social impact of the scheme in rural areas due to asset creation as result of employment provided by MGNREGA. Lastly, the paper examines the impact of MGNREGA on women’s employment and how MGNREGA changed women’s income, employment and consumption patterns, which can be argued to be indicative of female empowerment. This study concludes that MGNREGA brought positive change to the lives of people in the rural area that was examined. MGNREGA, a landmark in the history of social security legislation in India or indeed anywhere in the world, promises to be a major tool in the struggle for securing employment guarantees in rural areas. The 100-day employment scheme, which came as a bolt from the blue, raised the living standards of rural India in terms of income, employment and consumption. Overall, the study found that MGNREGA has significantly improved the social and economic well-being of its beneficiaries in rural India.