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An evaluation of India’s National Rural Employment Guarantee Act

Country: India

Research area: Labor and employment

Timeline: 2009-2010


In 2005, India introduced a national anti-poverty program, now called the Mahatma Gandhi National Rural Employment Guarantee Scheme, which offered up to 100 days of unskilled manual labor per year on public works projects. An impact evaluation of the project, however, showed that the program didn’t function the way it was designed to and many people who needed work still didn’t have it, especially in the poorest states—where work was needed most. The team further examined results from the state of Bihar, India’s poorest, to better understand why the program was unable to provide work as intended. The results helped local policy makers design a new program that improved the ability of local government to provide better and more effective social protection programs.


The Government of India passed the 2005 National Rural Employment Guarantee Act, as a way to ensure up to 100 days of paid work per year for poor adults.  The program, now called the Mahatma Gandhi National Rural Employment Guarantee Scheme, aims to reduce poverty by providing extra work for those who need it, while also providing empowerment and insurance when other sources of work dry up. Much of the evaluation was focused on Bihar, where more than 50 percent of the population is under the age of 25 and nearly 90 percent of people live in rural areas.


Researchers analyzed household-level data from India’s National Sample Survey in 2009-2010 to determine the program’s effects nationally. They also used the data to better understand the program’s effectiveness in reaching India‘s rural poor, and more specifically, backward castes, tribes and women. In Bihar, researchers used a randomized control trial of an awareness intervention—a fictional movie about ways to seek work under the program—to understand its effects on people’s understanding of the works program and participation numbers.


Researchers found that there were large numbers of people across all of India’s states who sought work—but were unsuccessful in locating it through the program. This was even more pronounced in India’s poorest states, where the program was needed most. In Bihar, researchers found that the program fell far short of its goals: Workers are not getting the work they wanted, they are not getting the full wages they were due, and many participants reported having to give up other wage-paying jobs in order to participate in the program. The study also found that there was very low public awareness of what needed to be done to obtain work. The movie was effective in raising awareness, but it had little effect on people’s actions and those who saw it were no more likely to seek employment. As researchers noted, the results highlighted the challenges that local government faced in delivering the program effectively —specifically implementation complications, weak financial management and inadequate monitoring.


The results provided the Government of Bihar with a better understanding of challenges it faces in delivering social protection systems. Policy makers used the findings to design the Bihar Social Protection Project, a World Bank-supported project that strengthens the Department of Social Welfare and the Rural Development Department so that they can better deliver social protection programs and services to their poorest and most vulnerable citizens.