The scheme’s impact on reducing rural poverty and improving standards of living is well established through several studies. According to a recent study by Azim Premji University, by compensating for income loss caused by COVID-19-induced shutdowns by up to 80 per cent, the scheme provided a much-needed safety net for the rural population during this difficult period.
Wages below the minimum wage rate coupled with reduced budgetary allocations have a direct impact on the disposable income of rural households furthering the decline in demand for goods and services in rural areas. Beyond the basic provision of employment guarantee, MGNREGS is known to have impacted the lives of rural residents in several ways. Its ability to provide social protection, livelihood stability, and democratic empowerment sets the stage for inclusive growth in rural India.
MGNREGS has been effective in generating long-lasting assets, enhancing water security, conserving soil, and increasing land productivity while ensuring that the employment potential through these measures goes to the local residents.
For MGNREGS to continue its support to the rural economy, financial wisdom in budgetary allocations, wages in line with rising prices and cost of living and meaningful asset creation are a must.