MNREGA

Utilising household-level data, this paper investigates the impact of Mahatma Gandhi National Rural Employment Guarantee Scheme on financial inclusion. Exploiting the staggered timing of the roll-out of the programme across districts, while controlling for its non-random implementation, it is found that MGNREGS improves financial access. This is confirmed in simple univariate tests as well as in multivariate regressions that take into account several district- and household-level controls. The evidence, however, is less compelling when the use of finance is examined, although there is a differential impact for districts with higher proportion of women. The magnitudes in most cases are quite large and suggest that public works programme can positively influence financial inclusion.

Ensuring good governance while devolving the 3Fs— functions, funds and functionaries—is a formidable challenge. An action research conducted in Sikkim from 2010 to 2016 focused on four questions: where is the corruption, what are the different types of corruption, how much is the quantum, and how do we reduce it effectively? A set of anti-corruption tools was integrated in the programme delivery, and corruption practices were broadly grouped into “easy to prevent,” “difficult to prevent but easy to detect,” and “difficult to prevent and detect.” By applying this strategy, we found that the corruption level dropped more than three times from 1.74% to 0.55%, and the savings from sanctioned cost rose to 20% (₹30.16 crore). This reduction was achieved despite weak enforcement, highlighting that a dynamic anti-corruption strategy that increases the probability of being caught can significantly reduce corruption by decentralising accountability.