Five question to mgnrega

One, how well does the self-targeting mechanism work?
The MGNREGA is a self-targeting programme that assumes that only those who can’t find better-paying, less-strenuous[stren-yoo-us(effortful,कठोर)] work will participate in the hard manual labour offered under the act. A recently published report based on the India Human Development Survey (IHDS) of over 28,000 households before and after the implementation of the MGNREGA, shows that the programme is moderately effective in this. Thirty per cent of poor and 21 per cent of non-poor households participate; and 30 per cent of illiterate households versus 13 per cent of households with college graduates participate.

Two, does it really reduce poverty?
The IHDS shows that among the 24.4 per cent of MGNREGA-participating households, the median number of days worked is 40 and the median annual income from the MGNREGA is Rs 4,030, forming about 8.6 per cent of total household income, variety of assumptions suggest that without the MGNREGA, the poverty ratio would be at least 25 per cent higher among participants.

Three, does it distort[di'stort(falsify,विकृत)] labour markets?
The biggest complaint against the MGNREGA is from large farmers, who claim it has provided alternative jobs to agricultural labourers and increased agricultural wages. Data show that agricultural labour wages have risen faster than other wages, While individuals often worked 30-34 days, at the population level, this comes to less than four days of MGNREGA work per person. The small and marginal farmers who own the bulk of India’s farms are both MGNREGA workers and employers of farm labour. Thus their MGNREGA income more than makes up for any hardships caused by an increase in agricultural wages. Medium to larger farmers — less than 10 per cent of cultivators — are affected by increases in agricultural wages.

Four, why are 70 per cent of the poor not participating in the MGNREGA? 
In the IHDS sample, more than 60 per cent of interested households complained of not having sufficient work due to poor implementation. Since about 40 per cent of the excluded poor live in low-perfoming states.

Five, what about cash transfers? Recently, a lobby for replacing employment guarantee programmes with cash transfers has emerged among economists. This would dismantle[dis'man-t(u)(break,तोडना)] the bureaucracy and get cash into the bank accounts of individuals without distorting labour markets. Indian experiments with identification of the poor have been dismal[diz-mul(depressing,निराशाजनक)] failures, leading to enormous[i'nor-mus(big,बड़ी)] errors of inclusion (the non-poor getting benefits) and exclusion (the poor being left out). If cash is to be given to all households for 100 days without that barrier, the financial burden would be enormous.

Given these considerations, it would not be prudent[proo-d(u)nt(wise,बुद्धिमान)] to let our cynicism[si-ni,si-zum(distrustful,दोषदर्शिता)] about public programmes push us into dismantling the MGNREGA instead of reforming it to ensure better performance

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