India’s rural employment guarantee was conceived at a time when village economies were marked by chronic distress, limited non-farm opportunities and weak infrastructure. This weakens the role of public employment as an automatic stabiliser and reduces its ability to support rural demand during downturns. A key fiscal lesson from past experience is that rural employment produces stronger results when linked to asset creation. This approach places rural employment within the wider development process rather than treating it as a parallel system. Large public works running simultaneously can strain labour availability, raise input costs for farmers and affect output.

Source: The Hindu December 22, 2025 00:47 UTC