Rural Labour Market in the Context of MGNREGA

Abstract

The article brings together secondary data pertaining to the rural labour market and argues that it is inappropriate to judge the impact of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) based on the trends in employment/Labour Force Participation Rate (LFPR) because the Act can both prop up and dampen them while enhancing welfare. Instead, it is noted that the impact of the Act can best be ascertained by analysing the trends in unemployment and real wage rates. After a close look at these trends, it is concluded that the MGNREGA served rural India adequately enough to accomplish its objective of improving the living conditions of the poor by containing unemployment, by effecting an increase in real wage rates and by reducing gender gap in wage rates.