ADB lauds rural employment guarantee scheme, warns against low rank on social protection index

Written by ENS Economic Bureau | New Delhi | Updated: Jul 8 2013, 16:58pm hrs
Giving a pat on the back to the governments flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), a recent study by the Asian Development Bank has said it is a very effective labour market programme. However, Indias performance for over all social protection is below average.

India was rated 0.051 on the Social Protection Index (SPI) of the ADB that measures national social protection programmes to address poverty and vulnerability.

India, which lagged behind countries including Mongolia, Vietnam, Sri Lanka and Nepal, spent just 1.7 per cent of its GDP on social protection programmes.

Spending in most middle-income countries, including Armenia, Fiji, India, Indonesia, Pakistan, the Philippines, and Samoa, remains below 3 per cent of GDP. East Asia spends the most while South Asia spends the least, the ADB said.

But noting that though India has low SPIs for social insurance and social protection, the study noted, India stands out: it has an SPI for labour market programs of 0.250, which is far higher than its social insurance and social assistance SPIs.

Indias three labour market programmes take up 40 per cent of its total spending on social protection the MGNREGS accounting for 38 per cent of all such spending and covering 52.5 million beneficiaries.

The programme appears to have a decent targeting record, providing work for a significant number of poor rural workers and even encouraging womens participation in local labor markets, it said.

The scheme has also helped build infrastructure in rural areas and has helped expand female participation in the labour force.