Employment Guarantee in Rural India

This article assesses the impact on poverty and the likely cost of an employment guarantee scheme providing 100 days of work to the rural people during the lean season. At the current statutory wage rate, the scheme may help reduce rural poverty to 23 per cent (30 per cent year round), at a cost of 1.7 per cent of GDP. But, given the extra cost of the scheme, a greater impact on poverty would be achieved by taking the same fiscal outlay and allocating it equally to everyone, whether poor or not.