ISS Working Paper 490

The jury was truly impressed by the overall quality of all the papers, the theoretical depth, the sharpness of the analysis, the commitment to the poor and the excluded. The members of the jury looked in particular at the quality of the argument, the link between question and conclusion, the creative collection and use of data, the dialogue with theory, and the potential for publishing.

The paper by Subhasish Dey examines measures to combat poverty at the local level. In particular, the paper critically analyses much applauded public policies aimed at improving conditions for employment by zooming in on the efficiency of these measures, the eventual outcome of these policies, and its often contradictory side effects. The author managed to collect a vast amount of high quality data through a survey, involving no less than 500 households in more than a dozen municipalities. This type of data collection in such a short time span is rather unique. As one of my colleagues exclaimed: “there is enough data here for three follow-up PhD projects”. The jury was also impressed by the careful choice of impact indicators, which always is a challenge. The author concludes that the policies are working well in terms of targeting the poorest households, even though only a limited number of work days is generated by this programme called the “National Rural Employment Guarantee Scheme, The Case of Birbhum District, West Bengal”.

Abstract

The world’s biggest Employment Guarantee Programme, India’s National Rural Employment Guarantee Scheme (NREGS) has been in operation in rural India since February 2006. In principle, the scheme is a self-targeted programme designed to provide 100 days of employment to rural households and to serve as a safety net. More broadly its aim is to reduce rural poverty through the creation of sustainable rural infrastructure which is expected to foster rural economic growth.

This study looks at the performance of the NREGS from three perspectives - it examines the targeting aspect of the programme, the efficiency of the implementing PRI bodies and the impact of the program on various outcomes at household level. The study is based on primary data collected from 500 randomly selected households, 2249 individuals and 70 schemes located in 13 Gram Panchayats in Birbhum District of West Bengal, India.

On the basis of this primary data, the study reveals that at least in Birbhum District the programme is far more likely to be accessed by poorer households (defined in terms of land holding, monthly per-capita income and other household related characteristics). At the same time there is a clear and substantial impact of left political inclination in terms of enabling access to a greater number of days of work under the scheme. In terms of the efficiency impact, the analysis reveals a clear violation of the formal clauses and the spirit of the NREG Act and thereby undermining the potential of the programme in terms of providing a safety net. In terms of the impact, the study finds no statistically significant impact on economic outcomes at household level but does find a statistically significant and substantial relation between reduction of stress related to joblessness and access to the NREGS. The estimates suggest that while the NREGS may not be creating any new employment, and may indeed be substituting for existing employment opportunities, the scheme is still considered valuable as it offers better working conditions.

Keywords: NREGS, targeting, efficiency, impact, labour-substitution, Birbhum, West Bengal

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