4. Beyond Digging and Filling Holes: Maximizing the Net Positive Impact of MGNREGA

When it was launched in 2005, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was expected to materially alter the working of rural labour markets and create durable assets, both public and private. In 2009–10, and then again in 2010–11, IWMI surveyed the post-MGNREGA rural labour markets and undertook case studies of more than 140 best-performing MGNREGA-constructed water infrastructure (assets). This chapter reviews and synthesizes the evidence from these field studies. The surveys indicate that where implemented well, MGNREGA has significant and positive income effect and improves the bargaining power of labour. Women find MGNREGA particularly attractive and though not eradicated completely, the gap between male and female wages seems to have reduced. However, MGNREGA’s impact on migration is less clear and we found conflicting evidence. Besides being the world’s largest employment programme, MGNREGA is also among the world’s largest water security programmes, investing over US$ 3 billion annually in constructing, repairing, and renovating rural water assets. One concern regarding MGNREGA has been that even when the programme enhances incomes and livelihoods of the poor, the structures it creates or improves may not be productive and durable. The chapter also reviews case studies of best-performing MGNREGA water assets. We find that, on average, the best-performing assets are able to generate gross returns equal to their investment in a little over a year. The chapter teases out eight lessons, which, if incorporated in programme design and administration, can enhance its ‘strike rate’ in delivering productive and durable rural water infrastructure.