The performance of National Rural Employment Guarantee Scheme in Rajasthan was debated for its stupendous performance in the initial years of the scheme, but also for the relative sharp decline after 2010. Based on a large representative primary survey, this paper argues that the decline in performance of this scheme in Rajasthan is not entirely due to the lack of demand. Instead, the supply-driven top-down nature of the programme has led to a "discouraged worker" syndrome with workers showing disinterest in demanding work and passively waiting for availability of NREGS work. Strengthening the demand-based nature of the NREGS may reduce the need for rationing. Simple temporal tracking of NREGS outcomes at the village level along with proper recording of demand through the Management Information System may well help detect discrimination within panchayats.
