Assessment of Economic Impacts of MGNREGA in Selected Two Villages of Karnataka State using Social Accounting Matrix (SAM),Socioeconomics Discussion Paper Series Number 26

Murthy, P S S and Kumar, G and Gowda, V C and Bhattarai, M and Chandrakanth, M G and Girish, M R and Nagaraj, N (2014) Assessment of Economic Impacts of MGNREGA in Selected Two Villages of Karnataka State using Social Accounting Matrix (SAM),Socioeconomics Discussion Paper Series Number 26. [Socioeconomics Discussion Paper Series]

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Abstract

Public investment on rural infrastructure development, as done under employment Guarantee Act (MGNREGA), besides providing income, employment and livelihood security to rural labor force, is expected to have positive impacts on other sectors of the rural economy as well. This includes benefit to both farm and non-farm of the rural economy. Therefore, using framework of local economy wide modeling, particularly Social Accounting Matrix (SAM), we have analyzed direct and total economy wide impact of MGNREGA in two different dryland villages of Karnataka state of India: One village is in Tumkur district (Belladamadugu village) in Southern region and the other in Bijapur district (Markabinahalli village) in Northern region of Karnataka. SAM analysis was carried out collecting both primary as well as secondary data for the agricultural year 2012-13 (From 1st June 2012 to 31st May 2013). Purposive sampling was done for collection of data from the households. Following ICRISAT VDSA Study criteria, farm households were classified into five strata namely, landless households, and marginal, small, medium and large land holding households; and farming sector data were collected from the stratified random sampling of these households. In additions, data was collected from different economic agents including shops (Agricultural input shop, canteen, Provision store) and service providers (tailor, barber, drivers, labourers and so on) regarding details of employment provided, receipts and expenditure. Then, we have constructed SAM of 82X82 sizes for the analysis. Multiplier effect of MNGREGS on the whole village economy of Markabinahalli and BM villages was 1.9 and 1.45, respectively. This suggests for a very weak multiplier impact of the MGNREGA interventions. Likewise, we have also estimated income, output and employment multiplier of the MGNREGA interventions in each of the village. On the whole, the direct and total impact of MGNREGS on village economy was weak due to several factors, among them the important factors were the high level of leakage of MGNREGA expenditure on several materials and machines use that were brought from outside of the village economy. At the end, this study also suggests policy measures for enhancing multiplier impact of the MGNREGS program interventions in the local economy.

Item Type: Socioeconomics Discussion Paper Series
Divisions: RP-Market Institutions and Policies
CRPS: CGIAR Research Program on Policies, Institutions, and Markets
Series Name: Socioeconomics Discussion Paper Series Number 26
Uncontrolled Keywords: Social Accounting matrix, Village Economy wide modelling, MGNREGA, Karnataka, India
Subjects: Others > Agriculture-Farming, Production, Technology, Economics
Depositing User: Mr B K Murthy
Date Deposited: 17 Nov 2014 05:43
Last Modified: 04 Dec 2014 10:35
URI: http://oar.icrisat.org/id/eprint/8346
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