This paper published by Center For Global Development, critically reviews the arguments for and against both employment guarantees and income guarantees when viewed as rights-based policy instruments for poverty reduction in a developing economy, with special reference to MGNREGA programme in India.

The paper critically reviews the arguments for and against both employment guarantees and income guarantees when viewed as rights-based policy instruments for poverty reduction in a developing economy, with special reference to India. Evidence on India’s National Rural Employment Guarantee Act does not suggest that the potential for either providing work when needed or reducing current poverty is being realized, despite pro-poor targeting. Instead, work is often rationed by local leaders in poor areas, and the poverty impact is small when all the costs are considered. Decentralized implementation of the right-to-work poses serious challenges in poor places.