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The National Rural Employment Guarantee Act
Abstract:
This paper looks at the National Rural Employment Guarantee Programme (NREGP) in India that was launched in the year 2005 as a social security measure aimed at providing employment security to the poor in villages. The NREGP was also meant to use this labour to construct rural infrastructure that is clearly wanting in India. The National Rural Employment Guarantee Act guarantees 100 days of work to all households. This analysis looks at the direct and the indirect effects that the NREGP has on employment generation and poverty reduction in a local. For this, a detailed survey in a specific village was undertaken to highlight the impact of the NREGP. This survey covered a poor agricultural village with 400 households, nearly 2500 people. The survey recorded income and expenditure levels by type of household (large, small and marginal farmers, agricultural labour, services etc). The survey also recorded production activities undertaken by the inhabitants.
The data was then used to build a Social Accounting Matrix. A SAM is as an organized matrix representation of all transactions and transfers between production activities, factors of production and institutions within the economy with respect to the rest of the world. Each row of the SAM gives receipts of an account while the column gives the expenditure. The total for each row is equal to the total of each corresponding column. The wages paid under NREGP in this village amounted to Rs 582000 leading to an increased output of Rs 452219. The Value added increases by Rs 226577, the additional household income generated was Rs 196823. The multipliers that were obtained showed that Public Distribution Systems (PDS) services have multiplier of 2.08 followed by maize with 1.80 and wheat with 1.79. The sectors where we see maximum impact are wheat, animal husbandry, …… and education and the maximum impact on the household incomes accrues to the small cultivator followed by the labour household and then the large farmer households.
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