With 301.7 million poor people, constituting 27.5 percent of the population, poverty reduction in India is clearly far slower than anticipated. Most chronically poor are landless or nearlandless, have a higher dependency burden and illiteracy level and depend on wages. The wage dependence of those in chronic poverty makes recent initiatives under the National Rural Employment Guarantee Scheme (NREGS) an important milestone in anti-poverty policies since India's Independence. NREGS however, has roots in the Maharashtra Employment Guarantee Scheme (MEGS) – a flagship initiative of the Government of Maharashtra that recognised, for the first time, the right to work and provided unskilled work on demand. It has been operational for over three decades. This paper tries to revisit the existing literature on the MEGS to identify and understand the issues that deserve special attention in the context of employment-induced poverty reduction in the Indian context. The central argument in the paper is that awareness generation and empowerment of the poor for the creation and operationalisation of demand for work are the two most critical preconditions for rights-based programmes such as MEGS and NREGS to deliver the desired results.
This paper notes that while the NREGS has potential to reduce the intensity of poverty for the large mass of rural poor, the number of days of work provided and the level of the wage rate remain critical determinants of whether or not this can provide an escape route out of poverty for those who are able to work.
CPRC Working Paper No. 118, Chronic Poverty Research Centre, London, UK, ISBN: 978-1-906433-19-2, 37 pp.