March 27, 2013 | Contribution by
Indian School of Business
Thrashing grain. India. Photo: © Ray Witlin / World Bank
In 2006, India launched the National Rural Employment Guarantee Scheme (NREGS) to tackle underemployment and unemployment in the agricultural sector. The program guaranteed a minimum of 100 days of work every year to anyone who requested it. How is it doing? What are its strengths and weaknesses? We examine these questions in a two-part series. In Part II of this series, we talk with Shamika Ravi, Assistant Professor, Indian School of Business, who recently conducted an impact evaluation of NREGS in Medak District (one of the poorest districts in Andhra Pradesh). The results show better food security, health outcomes, and financial inclusion, higher rural wages, and lower migration from rural to urban areas. But a worrisome trend, she says, is that the higher wages have reduced interest in running microenterprises, causing a shift from self-employment into casual labor. Ravi asks if government can really be the employer of last resort in the long run.