Rationing and Its Implication on Targeting in India: The Case of the Rural Employment Guarantee Scheme

Abstract

Rationing and its implication on targeting of benefits to the poorer population is among the major concern of policy makers. Taking 66th round data of National Sample Survey (2009-10), this paper examines the implications of type 1 and type 2 rationing of work under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in India for poorer households. Using regression analysis, it attempts to find, if the households, which sought but did not get work, are poorer (by various indicators) than the ones, who got work (type 2) and then explores, if the non-poor households got higher number of days of work than the poor households (type 1). The results show that the households with lower per capita consumption expenditure have significantly lower probability of getting work compared to non-poor. This has left behind a substantial exclusion of poor, without work. It also gives evidence that non poor households get work for significantly higher number of days than poor households. The results highlight the implication of rationing, which led to exclusion of benefits for the poor. Hence, it welcomes the recent move by the government to scale up the works under MGNREGS, which is expected to reduce rationing of jobs.

Keywords: Targeting, Rationing, MGNREGS, Bivariate Probit, Tobit, Sample Selection

JEL Classification: I38, I32, J22, C14, C21