MGNREGA and Financial Inclusion – An Inter-District Analysis of Odisha

Abstract

The study attempts to have an inter-district analysis of the performance of MGNREGA in Odisha. Among 23 states, Odisha is having an index of financial inclusion value of 0.2 and is at 15th rank. Thus the extent of financial inclusion is found to be significantly low in Odisha. Financial inclusion is the key to empowerment of poor, underprivileged and low skilled rural households as they compose 70 percentage of Indian population. Financial Inclusion can truly lift the financial condition and improve the standards of lives of the poor and the disadvantaged. To fasten the pace of financial inclusion, the Government of India in 2008 declared that wage payments, under the Mahatma Gandhi National Rural Employment Guarantee Act, the world's largest rural public works programme, would be made through banks and post offices. As MGNREGA is a widely discussed public policy and knowledge about it is the need of the hour, the present paper will analyze how the scheme is helping in promoting financial inclusion via wage payment through banks and post offices in Odisha. It will also highlight some of the problems that are encountered when banks and post offices are used as a means for wage payment to accelerate the speed of financial inclusion and remedial measures that could be taken to tackle these problems.