Cap & trade, Nrega style

Good sections of rural India don’t want NREGA any more, showing the government spending pattern on the scheme. Since a large percentage of the village labourers have moved to the cities, it makes far better sense to develop an unemployment dole for them. The subtext is an accounting arrangement that ensures that like NREGA, the government can keep on rolling out similar entitlement programmes like the proposed Food Security Act, but the hit on the fisc will be far less than the projected expenditure. The fiscal deficit does not balloon even as the vote bank is kept happy.

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