Economic Analysis of MGNREGA in the Drought–prone States of Karnataka, Rajasthan and Irrigation–dominated State of Andhra Pradesh

Using macro level data on MGNREGA performance in drought-prone states of Karnataka and Rajasthan as well as in irrigation-dominated state of Andhra Pradesh, this study has revealed that the impact of MGNREGA wage on the economic scarcity of labour is relatively modest when compared with the impact of hike in non-farm wages. Even though the provision of food security through public distribution system has contributed to the economic scarcity of labour, the relative hike in non-farm wages is contributing to higher economic scarcity of labour rather than PDS and MGNREGA wages. The study has suggested subsidies for farm mechanization should be provided in order to sustain food and livelihood security in the drought-prone as well as irrigation-dominant states of India.