Employment guarantee scheme through the lens of financial inclusion

Abstract

Financial Inclusion is one of the stated objectives of National Rural Employment Guarantee Act (NREGA) — world's largest Employment Guarantee Scheme. Even though financial inclusion efforts began in India in 2005, large sections of rural India still remain financially excluded. At the time of this work, possessing a bank/ post office account has not been mandated by the Government of India for gaining NREGA employment — our work, therefore focuses on the role of access to formal banking on the breadth and depth of participation in Employment Guarantee Schemes. We find evidences of positive impact of access to formal banking on demand for NREGA jobs as well as extent of participation. We also find interesting contrasts between individual and joint bank account holders in demand for labor as well as participation.