MGNREGA helps in reducing poverty, says study

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By NewsGram Staff Writer

Mahatma Gandhi National Rural Employment Guarantee Act (2005) promises 100 days of wage employment in each financial year to rural households. A recent study shows that it is because of this scheme that there is a notable reduction in poverty in India between 2004-05 and 2011-12.

15in_village_694702f26,000 rural households were interviewed twice- in 2004 before MGNREGA was introduced and later in 2011, after the introduction of the scheme. The survey was carried out by IHDS, Indian Human Development Survey.

IHDS, in a report released on Wednesday, has found the scheme to have reduced poverty among participant households to 31%. Out of the entities interviewed, 30% of them participated in the scheme along with 21% non-poor rural households.

Contradictory to the popular view that MGNREGA has raised rural wages, the study points to the fact that wages indeed rose sharply from 2004-05 to 2011-12, but the wage rate growth in high-level participation of MNREGA and low-levels of it, are almost the same. The issue that this report highlights is that women empowerment has come ashore because of this Act. For nearly 45% of women work under this scheme. Most of these women were disguised 21iit4

employed or unemployed in 2004-05. MGNREGA enabled 49% of women to have their own bank accounts in 2011-12.

As a result of this, the report also noted a significant reduction in borrowings from moneylenders and encouraged self-reliance among MGNREGA participants.