Friday, 22 July 2011

NGREGA, bring real democracy to india's grass root.

INDIA country charactersied by sluggish agrarian economy ,marred by malnourised children and anaemic women as also sucide by farmer in distress . There is no doubt that NREGA has put some money in the hands of poor. But with exceptions. Without the appropriate government interventions ,widespread unemployment would be a characteristic feature of capitalism . One is to reduce taxes so that taxpayers .another is a large scale public work programme like NREGA which creates purchasing power among worker . When those receving tax breaks or working on NREGA site spend this additional money ,they create demand for commodities .demand stimulating process is called multiplier. The value of this multiplier depends on the marginal propensity to consume of those benefiting from government intervention .the mpc is our extra spending out of the additional rupee we earn . Clearly the higher the mpc ther greater tjhe stimulus provided to demand. NRGEA from this point of view is that it is putting money into the hands of those whose mpc is the highest ,those on the margins of existence are more likely to spend than save most of what they earn.
NGREGA is much more than an ad hoc relief programme dishing out doles or what these days are more fashionably called direct cash transfer. Not many people knows what data from the rural labour enquiry of the national sample survey confirm that a very high proportions of agricultural labour household on india actually owns land .under NGREGA , FARMER come back to land they long abandoned .it is a revolutionary act that seeks to bring real democracy to india's grass root.

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