Tuesday, February 3, 2009

NREGA in numbers - impressive story?

Whatever the auditors and critics say about the National Rural Employment Generation (NREG) program (pilferage, ineligible beneficiaries, poor quality assets etc), the figures in the graphics below tell a mighty impressive story.

In terms of its universal scope (both in terms of geography - entire rural India - and beneficiaries - 2.25 Cr people) of and employment generation (934.7 Cr work days across 615 rural districts), NREG must surely be the largest and most ambitiuous anti-poverty program ever implemented anywhere in the world. Its secondary benefits -are especially impressive - financial inclusion (5.8 Cr savings bank account, which opens up access to formal credit mechanisms), increase in rural wages, terms of trade for agriculture products, and the simple multiplier effect from pouring Rs 40,000 Cr into the hands of those who are likely to spend all of it. Only an economic (and not the usual financial) cost-benefit analysis (or EIRR), can reflect the actual benefits of this program.

The data and logistics generated, bank accounts opened and the lessons from this experience can be invaluable implementation platforms for all future anti-poverty programs. Any welfare program implemented in future should invariably use the information generated by this. For example, Conditional Cash Transfer (CCT) schemes can utilize the excellent cash flow mechanism set up under NREGA. Further, all existing welfare programs, especially those involving distribution of cash - pensions, Self Help Group funds, farmers MSP payouts, etc - should also be intergrated into this.

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