The government’s proposed Unnati scheme, if it works as planned, offers MGNREGA beneficiaries a ticket out of the programme, and, in the long run, out of poverty.
It has been clear for a long time that MGNREGA is barely the poverty reduction tool it is often made out to be; at Rs 204 per day per person, the average wage rate across the country is too low to sustain a household of five even if the card-holding member got 100 days of employment as promised under the programme. As it happens, just around a tenth of all households got this—in FY19, just 50.3 lakh households of the 5.5 crore that were alloted work reached the limit of 100 days of employment—and just around 43% of the households that have job-cards received employment under the programme. While MGNREGA outlays rose from Rs 44,000 crore in FY16 to Rs 70,000 crore in FY19, it is not clear how much it helps reduce poverty levels. For one, the wages are not enough to lift the really poor out of poverty, just around 50 days of employment are provided in a year and if this employment is not provided at a time when the individual has no other job, it is not an addition to the household income since some other paying job has to be sacrificed to get MGNREGA wages. The biggest problem, of course, is that MGNREGA has no in-built plan to reduce poverty since it doesn’t really build any skills that can help workers get higher-paying jobs later; indeed, till some time back, MGNREGA works were not even linked to any meaningful asset creation.
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