Demand Shortfalls or Supply-side Constraints

This article presents a political economy explanation for the dramatic decline in performance of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), India’s largest social welfare policy, in one of its highest performing states, Rajasthan. The sharp decline from 2009 to 2010 is shown to be counter-intuitive, given the active civil society engagement right from the early stages of the Act’s making and implementation. Using information from field visits, interviews and secondary literature, I unpack the reasons for this decline, evaluating the validity of demand-side shortfalls and supply-side constraints as explanations. I demonstrate that it is primarily low capacity and low motivation of state officials that have led to the drop in MGNREGA’s performance. Further, I argue that the biggest strengths of the MGNREGA, that is, demand-based nature and provisions around transparency, have been made its most pressing shortcomings. Given the political nature of implementation of the MGNREGA, I conclude that Rajasthan needs political engagement strategies rather than merely technocratic solutions if this downturn is to be arrested.