Fall in central funding in V B G RAM G may reduce spending by poorer states: Abhijit Banerjee

The poorer states spending less on the scheme would not help the cause of reducing poverty, Banerjee said.

Hyderabad: Nobel laureate Abhijit Banerjee on Monday said the fall in funding by the Centre in the V B G RAM G that replaced MGNREGA may make the poorer states to spend less.

"I think the thing about G RAM G that worries me is that the fraction of federal funding is being reduced. The fraction of federal funding being reduced means that it's already true that the poorer states do less. That was always the problem with NREGA," he said speaking at the Hyderabad Literary Festival (HLF).

The poorer states spending less on the scheme would not help the cause of reducing poverty, he said.

"Now that the incentives are created so that the poorer states are even less able to do it. That doesn't seem to serve the purpose of fighting poverty," he said.

He felt that the bill has not yet "settled" and might change as there is fair amount of pushback even from "people in the ruling party" (BJP), adding that he would not like to take a position on the issue yet till he sees where it goes.

According to the Centre, the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) scheme, which has replaced Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, aims to establish a rural development framework aligned with the national vision of 'Viksit Bharat 2047'.