This case study illustrates India's progress in providing employment for the poor through the national works programme. The story describes the nature of the progress, analysis of the factors that have contributed to progress and lessons for policy makers.
India is one of the fastest growing economies in the world. Second only to China in Asia, growth of gross domestic product (GDP) averaged 8.7% between 2003 and 2007. Meanwhile, although growth has slowed as a result of the recent global economic crisis, the country has escaped severe recession. However, the benefits of growth have not been distributed equally, and high rates of poverty persist, heavily concentrated in rural areas and strongly correlated with particular social and ethnic groups. In 2000, the poverty headcount in rural areas was highest among Scheduled Castes (SCs) and Scheduled Tribes (STs) – 45.8% and 35.9%, respectively – compared with 21% among non-SCs/STs.
The Indian government has a long history of social safety net interventions, dating back to before independence in 1947. India is the only country in South Asia where, theoretically, 100% of the poor are targeted by either national or state-led social assistance programmes. Public works programmes have been a central component in safety net policies since the 1960s. Coverage of such programmes has increased significantly during the 1990s and 2000s, ultimately culminating in the passing of MGNREGA in September 2005.
MGNREGA is one of the government’s flagship programmes within the overarching national development strategy, the 11th Five-Year Plan (2007-2012). This plan focuses on measures of “inclusive growth” through a three-pronged strategy: economic growth, income poverty reduction through targeted programmes and human capital formation.
There are three overarching goals in MGNREGA: i) employment creation; ii) regeneration of the natural resource base and creation of productive assets in rural areas; and iii) strengthened grassroots processes of democracy through transparent and accountable governance.