Role of MGNREGA in Poverty Reduction: A Case Study of Ranchi District of Jharkhand.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) reduced poverty by up to a third and gave a large number of women their first opportunity to earn cash income. The part of the rural job market that the MGNREGS did seem to have a more significant impact on rural workers. MGNREGA offers, at least, 100 days of unskilled manual work to every rural household in a year. Households have traditionally used MGNREGA wages to supplement other sources of income and smooth consumption gaps, but its indirect benefits include the building of rural infrastructure, strengthening of grass-root institutes and skill development. Since 2000 India has experienced rapid economic growth and a sharp decline in poverty. But employment has grown more slowly. And although agriculture contributes 18 per cent to the Indian economy, it continues to employ 47 per cent of the workers. The difference between 47 per cent of workers in agriculture and their contribution is only 18 per cent to the Indian economy reflect disguised unemployment (i.e., crowding of workers in agriculture sectors) in agriculture particularly women. During 2005, Indian economy was growing at the rate of 7 – 8 per cent but income disparity was widening. Labour class were not getting the benefit of market reforms, growth and globalisation. In this context, government intervention was required. Thus, government intervened in the economy through National Rural Employment Guarantee Act to provide employment to unskilled workers in rural areas. This programme is designed to provide income protection against poverty in rural area. A majority of the poor in rural areas of the country depend mainly on the wages they earn through unskilled, casual, manual labour. They are often on threshold levels of subsistence, and are vulnerable to the possibility of sinking from transient to chronic poverty. Inadequate labour demand or unpredictable crises that may be general in nature, like natural disaster or personal like ill-health, all adversely impact their employment opportunities. The choice of works under NREGA seeks to address the causes of chronic poverty such as drought, deforestation and soil erosion. In order to attack on causes of chronic poverty and bringing excluded people into the mainstream of economic development, the Government of India is focusing on rural development through agriculture development under MGNREGA. MGNREGA is different from other employment and poverty alleviation programme in the sense that it is a legal framework and right to work based programme. Besides, it has bottom-up, demand driven structure with built-in social audits.