Is India's Jobs Guarantee Scheme a Global Model at Risk?

The National Rural Employment Guarantee Scheme (NREGS) in India is a groundbreaking programme that guarantees rural households the right to demand paid work, providing crucial support to millions. Recently, the Indian government introduced a new law, G RAM G, which modifies this scheme, raising the annual employment guarantee from 100 to 125 days, but also shifting funding responsibilities to the states. This article explores the implications of these changes for rural livelihoods and the future of this essential social programme.

Last updated: 01 October 2023 (BST)

What’s happening now

The Indian government recently enacted a new law, G RAM G, which rebrands and modifies the National Rural Employment Guarantee Scheme (NREGS). This scheme has been a cornerstone of rural livelihood support since its launch in 2005, granting rural households the right to demand paid work. The new law increases the guaranteed workdays from 100 to 125 per household but shifts a significant portion of the funding responsibility from the federal government to the states. Critics are concerned that this may undermine the scheme's effectiveness and accessibility, particularly for the poorest and most vulnerable rural communities.

Key takeaways

The new law G RAM G increases guaranteed workdays from 100 to 125.
Funding responsibilities have shifted to a 60:40 split between the federal government and states.
Over 50% of scheme workers are women, and around 40% belong to scheduled castes or tribes.
Critics warn that the changes could dilute the legal right to employment.
Evidence suggests that the scheme has successfully reduced poverty and improved rural livelihoods.

Timeline: how we got here

Understanding the evolution of the National Rural Employment Guarantee Scheme provides critical context for the recent changes. Here’s a brief timeline:

2005: The NREGS is launched, providing legal rights to paid work for rural households.
2009: The scheme is renamed Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
2020: The COVID-19 pandemic leads to increased reliance on the scheme as rural demand for work surges.
September 2023: The G RAM G law is enacted, changing the structure and funding of the employment guarantee.

What’s new vs what’s known

New today/this week

The most significant changes include the increase in guaranteed workdays from 100 to 125 and a shift in funding responsibilities from a 90:10 split (federal to state) to a 60:40 ratio. This alteration could impact the financial viability of the scheme in many states.

What was already established

Since its inception, NREGS has been instrumental in providing rural employment, particularly during economic downturns. Studies have demonstrated its effectiveness in reducing poverty and boosting rural incomes, with over half of its beneficiaries being women and a significant portion from disadvantaged communities.

Impact for the UK

Consumers and households

For UK readers, understanding the implications of India's rural employment scheme can provide insights into the challenges of rural economies worldwide. The NREGS highlights the importance of employment guarantees in addressing poverty and economic disparity, themes relevant to discussions about social safety nets in the UK.

Businesses and jobs

While the scheme primarily focuses on rural households, the changes may influence business dynamics in rural areas. With a potential increase in demand for skilled labour as the NREGS evolves, businesses may need to adapt to a changing workforce landscape.

Policy and regulation

The shifts in NREGS funding may prompt discussions about similar programmes in the UK and the balance between local and central government responsibilities in welfare schemes. Observing these changes can inform policy debates on employment support and social welfare reform in the UK context.

Numbers that matter

125 days: The new maximum number of workdays guaranteed per rural household under G RAM G.
£9.5 billion: The allocated budget for the scheme in the current financial year.
7%: The percentage of rural households that received the full 100 days of work in 2023-24.
40%: The proportion of scheme workers who belong to scheduled castes or tribes.
14%: The increase in earnings for beneficiary households according to a study on the scheme.

Definitions and jargon buster

NREGS: National Rural Employment Guarantee Scheme, providing rural households the legal right to demand paid work.
MGNREGA: Mahatma Gandhi National Rural Employment Guarantee Act, the previous name for NREGS.
Scheduled castes/tribes: Socially disadvantaged groups in India, often facing economic hardship.

How to think about the next steps

Near term (0–4 weeks)

In the immediate future, stakeholders will likely monitor state-level responses to the new funding arrangements and any resulting impacts on employment provision under the revised scheme.

Medium term (1–6 months)

Over the next few months, the effectiveness of the G RAM G in actually increasing employment opportunities and addressing rural poverty will be assessed. This will involve critical evaluation of state compliance and funding adequacy.

Signals to watch

Monitoring state allocations and implementation of the new funding model.
Tracking employment statistics and the utilisation rates of the scheme across different states.
Observing any changes in rural poverty levels and consumption patterns influenced by the scheme.

Practical guidance

Do

Stay informed about the changes in local employment schemes and available work opportunities.
Engage with local government representatives regarding the implementation of the G RAM G scheme.
Advocate for transparency in funding and employment provisions under the new law.

Don’t

Assume that the increase in guaranteed workdays will automatically translate into more employment opportunities.
Neglect the importance of monitoring the impact of the scheme on rural livelihoods.
Overlook the need for ongoing advocacy for equitable funding and access to the programme.

Checklist

Review local notifications on the G RAM G implementation.
Track monthly employment data released by state governments.
Assess the impact of the scheme on local economic conditions.
Participate in community discussions about employment needs.
Engage with local NGOs focusing on rural development and employment rights.

Risks, caveats, and uncertainties

While the G RAM G aims to modernise and improve the NREGS, concerns persist regarding its funding model and potential impacts on employment rights. Critics argue that shifting costs to states may limit their ability to provide adequate jobs, leading to a dilution of the legal guarantees that the original scheme offered. The effectiveness of the reforms will depend heavily on state capacity and commitment to ensuring employment under the new framework.

Bottom line

The revamping of the National Rural Employment Guarantee Scheme into G RAM G represents a significant shift in India's approach to rural employment. While the increase in guaranteed workdays is a positive development, the potential implications of the new funding model raise concerns about the future effectiveness of this vital programme. As millions of Indians rely on it for their livelihoods, the success of these changes will be crucial for rural welfare in the coming years.

FAQs

What is the National Rural Employment Guarantee Scheme?

The National Rural Employment Guarantee Scheme (NREGS) is an Indian programme that provides rural households the legal right to demand paid work, ensuring a minimum number of workdays annually.

What changes were made under G RAM G?

G RAM G raises the guaranteed workdays from 100 to 125 per household and alters the funding model to a 60:40 split between the federal government and states.

How does the scheme impact rural households?

The scheme significantly supports rural households by providing paid work opportunities, thus reducing poverty and improving living standards in rural areas.