The flagship program of UPA government that guarantees a minimum of 100 days of guaranteed employment to the unemployed in India especially in rural and semi urban cities has been a huge success. This is one scheme that clicked the right cord with the rural poor and instantly turned into votes for the Congress led UPA in the last elections. The scheme exceeded all the tangible benefits estimated or expected from it. Rural poor have a guaranteed employment scheme they can bank on that provides them a source of livelihood even if they are fired from their farm job or the crop on their tiny land holding fails. But it’s the intangible benefits which were unintended and untargeted initially that has made this scheme a huge success or at least a success which can serve as a launch pad for future rural development schemes.
NREGP helps control population growth among the rural and semi urban poor. No, it does not provide funds to laminate your libido or make you pop pills; it just raises the opportunity cost of having a child. A lady has to forgo her wage for at least a year if she bears a child. That translates into an opportunity cost of around Rs.40000 for the entire year she ‘wastes’ in childbirth and the costs associated with it. The men will rather prefer their ladies to have fewer children. A minimum standard wage also ensures incremental wages for them when they are employment in other sectors. In fact farm owners in Punjab had difficult time employing farm labor at rates close to those provided under the NREGP for sowing the kharif crop. They had to pay more than the minimum wage to attract farm labor. No doubt the NREGP wage rate is acting as a floor and incremental wages in other sectors brings a hope of better incomes and resulting subsistence livelihoods for the poorest of poor. As the opportunity cost of their time goes up, less time is wasted in activities like child birth and maternal leaves for the mother. On the flip side providing a subsistence wage may mean increased diversion of poor towards the only entertainment activity they relish or have access to. Education and awareness can play an important part in spinning a web of education, employment and population control among the poor. The development efforts at the base level should target these intangibles apart from the tangible benefits. Well done Team Manmohan in your batting power play (with the initial launch and success if NREGP), with wickets in hand (time to go before next election), lets hope you keep up the scoring rate in the middle overs and go for the slog in the final over. We seem to have an exciting match on our hands.
NREGP helps control population growth among the rural and semi urban poor. No, it does not provide funds to laminate your libido or make you pop pills; it just raises the opportunity cost of having a child. A lady has to forgo her wage for at least a year if she bears a child. That translates into an opportunity cost of around Rs.40000 for the entire year she ‘wastes’ in childbirth and the costs associated with it. The men will rather prefer their ladies to have fewer children. A minimum standard wage also ensures incremental wages for them when they are employment in other sectors. In fact farm owners in Punjab had difficult time employing farm labor at rates close to those provided under the NREGP for sowing the kharif crop. They had to pay more than the minimum wage to attract farm labor. No doubt the NREGP wage rate is acting as a floor and incremental wages in other sectors brings a hope of better incomes and resulting subsistence livelihoods for the poorest of poor. As the opportunity cost of their time goes up, less time is wasted in activities like child birth and maternal leaves for the mother. On the flip side providing a subsistence wage may mean increased diversion of poor towards the only entertainment activity they relish or have access to. Education and awareness can play an important part in spinning a web of education, employment and population control among the poor. The development efforts at the base level should target these intangibles apart from the tangible benefits. Well done Team Manmohan in your batting power play (with the initial launch and success if NREGP), with wickets in hand (time to go before next election), lets hope you keep up the scoring rate in the middle overs and go for the slog in the final over. We seem to have an exciting match on our hands.
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