India's National Rural Employment Guarantee Act, or NREGA, seemed unpromising from its inception. Not only did it have an ugly acronym that sounded like a Panamanian dictator in search of two vowels. It also threatened to become yet another wasteful subsidy, destined to distort prices, to be filched by corrupt middlemen and to tear a new hole in India's threadbare finances.
NREGA, enacted in 2005, has turned out to be a roaring success. Essentially a Rooseveltian make-work scheme that guarantees 100 days of manual work a year, it was probably the biggest factor in last year's emphatic electoral victory by the Congress party-led alliance. Worth just $170 per family – rightly deemed “crumbs from the high table” by Arundhati Roy, the novelist and campaigner – its popularity is an indication of the desperate circumstances in which hundreds of millions of Indians still live.
As well as alleviating abject poverty, the scheme is credited with helping to put a floor under domestic consumption. India grew at 6.7 per cent even as the global financial crisis raged around it. In the coming financial year, the economy is projected to expand by 8.8 per cent.