Macroeconomic Impact of Social Protection Programmes in India

Generally, the fiscal implications of social protection programmes are evaluated, but not so much on the economic impacts these schemes have on macro aggregates such as output, employment, income and revenue. This motivated us to evaluate the economic impact of three major social protection programmes, namely, the Mahatma Gandhi National Rural Employment Guarantee Act, Indira Awaas Yojana, and the National Social Assistance Programme in 2011-12 using a social accounting matrix. It is found that these programmes have significant impacts on output across different sectors of the economy, on income generation and distribution of different household classes in urban and rural areas, on employment across different sectors of the economy, and even on government revenue generation.

This research work was financially supported by the South Asia Research Network on Employment and Social Protection for Inclusive Growth. This is the abridged version of the paper presented in the Institute for Human Development Conference on 19 August 2014. The detailed results of the exercise have not been included in this version. For any further details, Atul Sarma may be contacted. The authors are thankful to S R Hashim and other distinguished participants present at the conference for their valuable suggestions.