Economy
Poverty, Unemployment and Inclusive Growth
Poverty Alleviation and Employment Programmes
From IRDP to MGNREGA and the VB-G RAM G Act 2025: wage employment, self-employment, livelihoods (NRLM, Bihan), housing, skilling and job incentives for CGPSC.
Prerequisites
- Measuring Poverty and Inequality — who these programmes are meant to reach.
- Unemployment: Types, Measurement and Trends — seasonal and disguised unemployment explain why wage employment programmes exist.
- Local Government: 73rd and 74th Amendments — Gram Sabhas and Gram Panchayats plan and audit rural works.
The Hook: The Pond in Every Village
Connect
Almost every village in Chhattisgarh has a talab (तालाब) that was dug or deepened under a government works programme: Food for Work in the 1970s, Jawahar Rozgar Yojana in the 1990s, MGNREGA after 2006. From 1 July 2026, that work continues under a new law with a new name and 125 guaranteed days.
Why has India kept changing these programmes? What is the difference between giving people wage work, helping them become self-employed, and building assets for them? This page traces seventy years of answers.
Why it matters: Prelims loves launch years, mergers (“SGSY merged which schemes?”) and scheme features (days of work, funding ratios, loan limits). After December 2025, the MGNREGA → VB-G RAM G change is a near-certain question. Mains asks you to evaluate wage employment programmes and the SHG model.
Three Strategies Against Poverty
| Strategy | Logic | Examples |
|---|---|---|
| 1. Growth-oriented (“trickle down”) | Fast growth will raise incomes and pull people out of poverty | Early Five-Year Plans (industrialisation); post-1991 reforms |
| 2. Targeted anti-poverty programmes | Give the poor assets, credit, skills or wage work directly | IRDP, SGSY, NRLM (self-employment); NREP, JRY, MGNREGA (wage employment) |
| 3. Minimum needs and social security | Guarantee basic services (food, housing, health, education) as a floor | Minimum Needs Programme (Fifth Plan), PDS and NFSA, PMAY, PM-JAY |
The Fifth Plan (1974–79) made poverty removal an explicit objective (“Garibi Hatao” was the 1971 election slogan), and the Twenty Point Programme was launched in 1975. See Economic Planning and NITI Aayog.
Timeline of Major Programmes
timeline
title Poverty and employment programmes in India
1952 : Community Development Programme
1977 : Food for Work
1978-80 : IRDP (nationwide 1980) and TRYSEM (1979)
1980s : NREP 1980, RLEGP 1983, IAY 1985
1989 : Jawahar Rozgar Yojana
1999 : SGSY (self-employment merger)
2001 : SGRY
2005-06 : NREGA passed 2005, in force 2006
2011 : NRLM Aajeevika
2025-26 : VB-G RAM G Act 2025, in force July 2026| Programme (year) | Type | What to remember |
|---|---|---|
| Community Development Programme (1952) | Integrated rural development | Block as the unit of development; led to Panchayati Raj (Balwant Rai Mehta, 1957) |
| Food for Work (1977) | Wage employment | Wages partly paid in food grains |
| IRDP (1978–79; nationwide 2 October 1980) | Self-employment | Assets (cattle, carts) through subsidy + bank credit to BPL families |
| TRYSEM (1979) | Skilling | Training of Rural Youth for Self-Employment, linked to IRDP |
| NREP (1980) and RLEGP (1983) | Wage employment | Merged into JRY (1989) |
| DWCRA (1982) | Women’s self-employment | Development of Women and Children in Rural Areas: early group-based model |
| Indira Awaas Yojana (1985–86) | Rural housing | Began as a sub-scheme of RLEGP; restructured as PMAY-G (2016) |
| Jawahar Rozgar Yojana (1989) | Wage employment | Funds routed to panchayats; restructured as JGSY (1999) |
| Employment Assurance Scheme (1993) | Wage employment | Merged with JGSY into SGRY (2001) |
| PMRY (1993) | Self-employment for educated youth | Merged with REGP into PMEGP (2008) |
| SGSY (1 April 1999) | Self-employment | Merged IRDP, TRYSEM, DWCRA, SITRA, GKY and MWS; SHG-based; restructured as NRLM (2011) |
| SGRY (2001) | Wage employment + food security | Merged EAS and JGSY |
| NFFWP (2004) | Wage employment | National Food for Work Programme in 150 backward districts |
| NREGA (2005) | Legal right to wage work | Subsumed SGRY and NFFWP; renamed MGNREGA on 2 October 2009 |
Wage Employment: MGNREGA (2005–2026)
Mahatma Gandhi National Rural Employment Guarantee Act (महात्मा गांधी राष्ट्रीय ग्रामीण रोजगार गारंटी अधिनियम)
| Feature | Detail |
|---|---|
| Enacted | 2005 (NREGA); in force from 2 February 2006 in 200 districts (launched at Bandlapalli, Anantapur, Andhra Pradesh); 130 more districts in 2007–08; all rural districts from 1 April 2008 |
| Renamed | MGNREGA, 2 October 2009 |
| Guarantee | 100 days of unskilled manual work per rural household per financial year, on demand. Additional 50 days for forest rights (FRA) holder households and in drought or calamity-notified areas |
| Unemployment allowance | If work is not given within 15 days of the application |
| Distance | Work within 5 km of the village; extra wage beyond that |
| Women | At least one-third of beneficiaries should be women |
| Wage–material ratio | At least 60:40 at the district level; no contractors and no labour-displacing machines |
| Funding | Centre: 100% of unskilled wages and 75% of material costs; State: 25% of material and the unemployment allowance |
| Planning and audit | Gram Sabha decides works; social audit by the Gram Sabha (Section 17) |
| Payment | Wages to bank or post office accounts (DBT), within 15 days |
Assessment (for Mains):
- Gains: a rural wage floor; a safety net in drought and during the COVID-19 lockdown; high women’s participation; water conservation assets; reduced distress migration in some areas.
- Problems: delayed wage payments; work “rationed” below demand; budgets running out mid-year; weak asset quality; corruption in material components; wages in some states below the state minimum wage.
Wage Employment: VB-G RAM G Act, 2025 (from 1 July 2026)
Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (विकसित भारत – रोज़गार और आजीविका गारंटी मिशन (ग्रामीण))
| Feature | Detail |
|---|---|
| Status | Passed by Parliament in December 2025; President’s assent 21 December 2025; in force from 1 July 2026; replaces MGNREGA |
| Guarantee | At least 125 days of unskilled manual wage employment per rural household per financial year (up from 100) |
| Agricultural pause | States may notify a pause of up to 60 days in a year during peak sowing and harvesting, so that farm labour is available |
| Funding | 60:40 (Centre:State) for general category States; 90:10 for North-Eastern and Himalayan States; 100% Central for UTs without legislatures |
| Allocation | Normative (rule-based) allocation to States; expenditure beyond it is borne by the State |
| Unemployment allowance | Linked to failure to provide work within 15 days; borne by the State |
| Planning | Viksit Gram Panchayat Plans, integrated with PM Gati Shakti and spatial data |
| Works | Four verticals: water security, core rural infrastructure, livelihood-related infrastructure, and works to mitigate extreme weather (climate resilience) |
The debate in one box (Mains)
For: more guaranteed days (125); assets tied to a village plan and to national infrastructure planning; the agricultural pause addresses farmers’ complaint of labour shortage at harvest; rule-based allocation gives predictability.
Against: under MGNREGA the Centre paid all unskilled wages, so the 40% State share is a large new burden for poorer States such as Chhattisgarh; a capped normative allocation may weaken the “demand-driven” right; the pause cuts work in the months when other work is also scarce for some households; opposition parties objected to dropping Mahatma Gandhi’s name.
Balanced line: the right to work survives, but its strength now depends on State finances and on how the allocation and pause rules are applied.
Self-Employment and Livelihoods
DAY-NRLM: National Rural Livelihoods Mission
- Launched in June 2011 as Aajeevika, restructuring SGSY; renamed Deendayal Antyodaya Yojana–NRLM. Ministry of Rural Development.
- Model: mobilise at least one woman from each poor rural household into Self-Help Groups (स्वयं सहायता समूह), federate them into village organisations and cluster-level federations, and link them to bank credit with interest subvention.
- Support structure: Community Resource Persons, Revolving Fund and Community Investment Fund; Start-up Village Entrepreneurship Programme (SVEP); DDU-GKY (Deen Dayal Upadhyaya Grameen Kaushalya Yojana, 2014) for placement-linked skilling of rural youth aged 15–35.
- Lakhpati Didi: an SHG woman earning at least ₹1 lakh a year. The target of 3 crore Lakhpati Didis was reported met by early 2026, and a new target of 6 crore by 2029–30 was announced (as of 2026).
- About 10 crore women are members of SHGs under the mission (as of 2026).
Chhattisgarh angle: Bihan (बिहान)
The Chhattisgarh State Rural Livelihoods Mission is branded Bihan (“dawn” in Chhattisgarhi). Its SHGs run activities such as minor forest produce processing, ready-to-eat food for anganwadis, fisheries, poultry and small enterprises. Bihan is the backbone for many state schemes that target women. See Economy, Budget and State Schemes.
Urban livelihoods and other self-employment schemes
| Scheme (year) | Key features |
|---|---|
| NULM (2013), later DAY-NULM | Urban SHGs, skilling, shelters for the urban homeless, support for street vendors; replaced SJSRY (1997) |
| PMEGP (2008) | Credit-linked subsidy for new micro-enterprises; merged PMRY and REGP; nodal agency KVIC |
| MUDRA / PMMY (8 April 2015) | Collateral-free loans to non-farm micro-enterprises: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), Tarun (₹5–10 lakh), Tarun Plus (₹10–20 lakh, added in 2024 for those who repaid Tarun loans) |
| Stand-Up India (5 April 2016) | Bank loans of ₹10 lakh to ₹1 crore for greenfield enterprises; at least one SC/ST and one woman borrower per bank branch |
| PM SVANidhi (June 2020) | Collateral-free working-capital loans to street vendors, in rising tranches, with interest subsidy and digital-payment cashback |
| PM Vishwakarma (17 September 2023) | Artisans and craftspeople in 18 trades: recognition, skill training, toolkit incentive and collateral-free loans up to ₹3 lakh in two tranches at a concessional rate |
Housing as Poverty Alleviation
| Scheme | Features |
|---|---|
| PMAY-Gramin (from 1 April 2016) | Restructured IAY; pucca house with basic amenities; assistance of ₹1.20 lakh in plains and ₹1.30 lakh in hilly, difficult and IAP (Integrated Action Plan) districts; beneficiaries from SECC 2011 data verified by the Gram Sabha (and later Awaas+ surveys); 60:40 Centre–State sharing for most States; convergence with MGNREGA (unskilled labour days) and Swachh Bharat (toilet) |
| PMAY-Urban (June 2015) and PMAY-U 2.0 (approved 2024) | Urban housing for EWS, LIG and MIG through beneficiary-led construction, affordable housing in partnership, and interest subsidy; 2.0 targets 1 crore more urban houses |
PMAY-G was extended beyond March 2024 to build 2 crore more houses by 2028–29. In Chhattisgarh, the government that took office in December 2023 made approval of pending PMAY-G houses its first cabinet decision.
Skilling and Job Creation
| Scheme (year) | Purpose |
|---|---|
| Skill India Mission (15 July 2015) | Umbrella; National Policy on Skill Development and Entrepreneurship, 2015 |
| PMKVY (2015) | Short-term skill training and Recognition of Prior Learning (RPL); Ministry of Skill Development and Entrepreneurship |
| DDU-GKY (2014) | Placement-linked skilling for poor rural youth (under DAY-NRLM) |
| National Career Service portal (2015) | Online job matching; replaced the old employment exchange model |
| PM Viksit Bharat Rozgar Yojana (approved 1 July 2025) | Employment-linked incentive: up to ₹15,000 (in two instalments) to first-time employees and up to ₹3,000 a month per new employee to employers; outlay ₹99,446 crore; jobs created between 1 August 2025 and 31 July 2027; aim of over 3.5 crore jobs; special focus on manufacturing |
Analysis: What Has Worked and What Has Not (Mains)
- From subsidy to institutions: IRDP gave one-time assets with a subsidy, many of which were sold or failed (no markets, no follow-up). NRLM builds long-lived women’s institutions first and credit second.
- From scheme to right: MGNREGA made work a legal entitlement with time-bound wages and social audit; VB-G RAM G keeps the guarantee but shifts cost and planning rules.
- Panchayats matter: programmes routed through Gram Sabhas (JRY, MGNREGA) gave local voice; social audits curbed leakage where they worked.
- Leakages fell with DBT: Aadhaar-linked bank payments (the JAM trinity) cut ghost beneficiaries but created new exclusion errors (authentication failures, wrong account details).
- Convergence: the best outcomes come when schemes are combined: a PMAY house with MGNREGA labour days, an SHG loan with skill training and market linkage.
Memory Tricks
SGSY merged six: 'I Took Delhi's Six Great Mangoes'
IRDP, TRYSEM, DWCRA, SITRA, GKY (Ganga Kalyan Yojana), MWS (Million Wells Scheme) → SGSY (1999) → NRLM (2011).
Wage employment family tree
NREP (1980) + RLEGP (1983) → JRY (1989) → JGSY (1999); JGSY + EAS → SGRY (2001); SGRY + NFFWP → NREGA (2005) → MGNREGA (2009) → VB-G RAM G (2025, in force 2026).
VB-G RAM G numbers: '125 – 60 – 60:40 – 90:10'
125 days guaranteed; 60-day farm-season pause; 60:40 funding for most States; 90:10 for NE and Himalayan States.
Don’t Confuse
| This | vs | That |
|---|---|---|
| MGNREGA: 100 days; Centre paid all unskilled wages | vs | VB-G RAM G: 125 days; 60:40 sharing for most States |
| NRLM (rural, 2011, MoRD) | vs | NULM (urban, 2013, Ministry of Housing and Urban Affairs) |
| PMEGP: subsidy for new micro-units, KVIC | vs | MUDRA: collateral-free loans, no subsidy |
| Stand-Up India: ₹10 lakh–₹1 crore, SC/ST and women, greenfield | vs | Start-up India: innovation-driven start-ups, DPIIT recognition |
| DDU-GKY: rural youth, placement-linked (MoRD) | vs | PMKVY: general short-term training and RPL (MSDE) |
| IAY (1985) | vs | PMAY-G (2016) |
Common Mistakes
MCQ traps
- “MGNREGA guarantees 100 days of work to every adult member.” No. It is per household, per financial year.
- “MGNREGA came into force in all districts in 2006.” No. It began in 200 districts (2 February 2006) and covered all rural districts from 1 April 2008.
- “The VB-G RAM G Act came into force on the date of assent.” No. Assent was on 21 December 2025; implementation began on 1 July 2026.
- “Under VB-G RAM G, the Centre bears the full wage cost.” No. Most States share costs 60:40.
- “SGSY replaced MGNREGA.” No. SGSY (self-employment) was restructured as NRLM; MGNREGA subsumed SGRY and NFFWP.
- “MUDRA is a refinancing agency for large industries.” No. It refinances lenders for micro enterprises.
Practice
All questions below are original practice questions written in CGPSC style. They are not previous-year questions.
Level 1: Foundation
- The Swarnajayanti Gram Swarozgar Yojana (SGSY) was restructured in 2011 as ______.
- Under the VB-G RAM G Act, the guaranteed wage employment is at least ______ days per rural household per year.
- The Chhattisgarh State Rural Livelihoods Mission is known as ______.
Answers
- NRLM (Aajeevika), later DAY-NRLM.
- 125 days.
- Bihan (बिहान).
Level 2: Prelims MCQs
Q1. Consider the following statements about the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025:
- It guarantees at least 125 days of wage employment per rural household in a financial year.
- States may notify a pause of up to 60 days in a year during peak sowing and harvesting seasons.
- For all States, the Centre and the State share the cost in the ratio 90:10.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer and explanation
(b) 1 and 2 only. The Act raises the guarantee to 125 days and allows a farm-season pause of up to 60 days. Statement 3 is wrong: 90:10 applies only to North-Eastern and Himalayan States; general category States share 60:40, and UTs without legislatures are fully Centre-funded.
Q2. Match List I (Programme) with List II (Year of launch):
| List I | List II |
|---|---|
| A. Integrated Rural Development Programme | 1. 1989 |
| B. Jawahar Rozgar Yojana | 2. 1999 |
| C. Swarnajayanti Gram Swarozgar Yojana | 3. 2011 |
| D. National Rural Livelihoods Mission | 4. 1978–80 |
- (a) A-4, B-2, C-1, D-3
- (b) A-1, B-4, C-2, D-3
- (c) A-4, B-1, C-2, D-3
- (d) A-4, B-1, C-3, D-2
Answer and explanation
(c) A-4, B-1, C-2, D-3. IRDP began in 1978–79 and was extended nationwide on 2 October 1980; JRY in 1989 (merging NREP and RLEGP); SGSY on 1 April 1999; NRLM (Aajeevika) in June 2011.
Q3. Which of the following programmes were merged to form the Swarnajayanti Gram Swarozgar Yojana (1999)?
- IRDP
- TRYSEM
- DWCRA
- Jawahar Rozgar Yojana
Select the correct answer:
- (a) 1, 2 and 3 only
- (b) 1 and 2 only
- (c) 2, 3 and 4 only
- (d) 1, 2, 3 and 4
Answer and explanation
(a) 1, 2 and 3 only. SGSY merged the self-employment schemes: IRDP, TRYSEM, DWCRA, SITRA, Ganga Kalyan Yojana and the Million Wells Scheme. JRY was a wage employment programme; it was restructured as JGSY in 1999.
Q4. Under the Stand-Up India scheme, bank loans are provided for:
- (a) existing micro-enterprises up to ₹10 lakh without collateral
- (b) greenfield enterprises of SC/ST and women entrepreneurs, between ₹10 lakh and ₹1 crore
- (c) street vendors as working capital
- (d) artisans in 18 traditional trades
Answer and explanation
(b). Stand-Up India (2016) aims for at least one SC/ST and one woman borrower per bank branch, for greenfield projects. Option (a) describes MUDRA, (c) PM SVANidhi, and (d) PM Vishwakarma.
Q5. Under MGNREGA (before its replacement), which of the following was not a statutory feature?
- (a) Unemployment allowance if work was not provided within 15 days
- (b) Social audit of works by the Gram Sabha
- (c) At least one-third of beneficiaries to be women
- (d) Use of contractors for large works to speed up completion
Answer and explanation
(d). MGNREGA barred contractors and labour-displacing machinery. The unemployment allowance, Gram Sabha social audit and one-third share for women were all part of the scheme.
Level 3: Mains Answer Writing
Q1. (150–200 words) “The replacement of MGNREGA by the VB-G RAM G Act, 2025 is both an expansion and a dilution of the right to work.” Critically examine, with reference to Chhattisgarh.
Model answer outline
- Intro: MGNREGA (2005) gave rural households a legal right to 100 days of work; the VB-G RAM G Act (assent 21 December 2025, in force 1 July 2026) replaces it.
- Expansion: 125 days; Viksit Gram Panchayat Plans linked to national infrastructure planning; four asset verticals including climate resilience; agricultural pause meets farmers’ labour needs.
- Dilution concerns: 60:40 cost sharing shifts burden to States; normative allocation may cap a demand-driven right; unemployment allowance on States; pause may reduce work for landless households.
- Chhattisgarh angle: a poorer, largely rural, tribal state with rain-fed agriculture and seasonal migration depends heavily on rural wage work; a 40% share pressures a state budget already carrying large transfers; Bihan SHGs and Gram Sabhas in Fifth Schedule areas (PESA) can make village plans meaningful.
- Conclusion: the guarantee’s value will depend on adequate allocation, timely wages and strong social audit.
Q2. (60 words) Why did India shift from IRDP to the SHG-based NRLM approach?
Model answer outline
- IRDP gave individual assets with subsidy but no training, market or follow-up; many assets failed and loans went unpaid.
- NRLM builds women’s SHG federations first, then links them to credit, skills and markets; it is demand-driven and community-led.
- Conclusion: the shift was from a one-time transfer to building lasting institutions of the poor.
Quick Revision Table
| Fact | Detail |
|---|---|
| CDP | 1952; block as unit |
| IRDP | 1978–79; nationwide 2 Oct 1980; subsidy + credit |
| JRY | 1989 = NREP (1980) + RLEGP (1983) |
| SGSY | 1 April 1999; merged IRDP, TRYSEM, DWCRA, SITRA, GKY, MWS |
| SGRY | 2001 = EAS + JGSY |
| NREGA | 2005; in force 2 Feb 2006 (200 districts); all districts 1 April 2008; renamed MGNREGA 2 Oct 2009 |
| MGNREGA features | 100 days/household; allowance after 15 days; 1/3 women; 60:40 wage–material; no contractors |
| VB-G RAM G | Assent 21 Dec 2025; in force 1 July 2026; 125 days; 60-day pause; 60:40 (90:10 NE/Himalayan) |
| NRLM | June 2011 (Aajeevika); DAY-NRLM; CG = Bihan |
| Lakhpati Didi | ₹1 lakh+ a year; 3 crore target reported met; new target 6 crore by 2029–30 |
| PMEGP | 2008; PMRY + REGP; KVIC |
| MUDRA | 8 April 2015; Shishu / Kishore / Tarun / Tarun Plus (up to ₹20 lakh) |
| Stand-Up India | 5 April 2016; ₹10 lakh–₹1 crore; SC/ST and women; greenfield |
| PM Vishwakarma | 17 Sept 2023; 18 trades; loans up to ₹3 lakh |
| PMAY-G | 2016 (IAY 1985); ₹1.20 lakh plains / ₹1.30 lakh hilly-IAP |
| PM-VBRY | Approved 1 July 2025; ₹99,446 crore; jobs 1 Aug 2025 to 31 Jul 2027 |
Key Takeaways
Key Takeaways
- India has fought poverty through growth, targeted programmes (self-employment and wage employment) and minimum needs guarantees.
- Self-employment moved from IRDP → SGSY → NRLM: from one-time subsidies to women’s SHG institutions (Bihan in Chhattisgarh).
- Wage employment moved from NREP/JRY → SGRY → MGNREGA → VB-G RAM G: from schemes to a legal right, now with 125 days and State cost sharing.
- Credit and enterprise schemes (PMEGP, MUDRA, Stand-Up India, PM SVANidhi, PM Vishwakarma) target urban and non-farm livelihoods.
- The new frontier is job quality: skilling and employment-linked incentives (PM-VBRY) for formal jobs.
What’s Next
- Inclusive Growth and Social Security — financial inclusion, food security and social protection
- Welfare and Development Programmes — the same schemes from the Mains GS-V angle
- Economy, Budget and State Schemes — Chhattisgarh’s own schemes
- Money, Banking and Inflation — priority sector lending and the banks behind these loans
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