Impact of Mahatma Gandhi National Rural Employment Guarantee Program on Rural Poor - A Simple Theoretical Discourse

The basic objective of the Mahatma Gandhi National Rural Employment Guarantee Program (MGNREGP) is to provide safety net for the rural poor and to stabilize agricultural production through creating productive assets via employing labourers. Two important linked aspects are worth noting in respect of implementation of the program. Implementation of MGNREGP in multiple cropping areas can increase the employment opportunities among the landless agricultural labourers and thus has inevitably raised their bargaining power particularly during the time of second crop i.e. post rainy season cultivation. Besides this, Government of India has persistently been hiking per man-day MGNREGP wage. Both these instances undoubtedly increase the reservation wage in agricultural labour market which in turn may have an adverse effect on the farm income in the multi-cropping areas. In this paper, maximum possible per man-day MGNREGP wage is determined at which the corresponding agricultural wage can help the marginal farmers to sustain their net farm income at least at subsistence level. This paper also establishes the fact that as a result of the hike of MGNREGP wage, sustenance of subsistence net farm income may lead to price hike in agricultural sector. The study also attempts to analyze the results in respect of aggregate net pecuniary benefits of the rural poor in the light of MGNREGP considering different agricultural frameworks.