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NREGA barrier to economic development

Posted by Ramoo on March 16, 2009

NEW DELHI: The World Bank has described the much-acclaimed National Rural Employment Guarantee (NREGA) scheme of the UPA government as a policy

barrier hurting economic development and poverty alleviation.

Various schemes of the Indian government like NREGA, watershed programmes and schemes for development of small and medium towns are acting as “policy barriers to internal mobility”, the bank said in its ‘World Development Report’ 2009.
The internal mobility, the report argued, is necessary as “lifting people out of poverty requires shifting populations from villages to cities”. The process of migration should be encouraged, the bank said.
“Negative attitudes held by (the) government and ignorance of the benefits of population mobility have caused migration to be overlooked as a force in economic development,” it said.
The report said economic benefits of migration are not always recognised by policy makers and, in fact, two forms of policy have been attempted in India to counter migration.
“The first response has been to increase rural employment, in an attempt to stem movement out of rural areas … These measures include the recently introduced National Rural Employment Guarantee Programme,” it said.

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3 Responses to “NREGA barrier to economic development”

  1. Srijit Mishra said

    The remark misses the following points. NREGA is meant to provides employment only if there is demand and not the other way round. People demand jobs within rural areas because the expected returns from migrating is even lower than wage rate of Rs.100 for 100 days for a household of five members and that too when the market was doing well.

  2. sudha said

    World bank remarks for NREGA program was in appropriate. Development does not mean only urbanization but also includes development of social capital. NREGA program has intense potential for creation of social assets if it is implemented in a full swing. It can also boost people participation in local village development for which world bank is advocating for part 30 years.

  3. Topsoil said

    Thanks for the advice. Will put it to work. Tom

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