India’s rural employment guarantee boosts demand for agricultural technology

Anil K. Bhargava
CSISA Research Note

This study shows that the program (i.e., MGNREGA) leads small and marginal farm owners to adopt labor-saving technologies that replace labor-intensive alternatives. In other words, MGNREGA decreases the threshold farm size associated with basic labor-saving technology use. In addition, MGNREGA’s focus on providing public water infrastructure appears to be decreasing the use of diesel and electric-powered water pumps. A focus on education and agricultural skill development may augment the chances that workers are prepared for a higher-productivity agricultural sector. Future data on long-run labor use, wages, output and technology adoption patterns will give much better insight into where MGNREGA villages end up in the long run.