Inclusive growth schemes

Story hook

It is mid-April 2020. India is three weeks into the world's strictest lockdown. The trains have stopped. The construction sites are abandoned. 80+ lakh migrant workers are walking home — from Mumbai to Bihar, from Surat to UP, from Delhi to Madhya Pradesh — some 1,200 km on foot. Television cameras catch the desperation.

In the Ministry of Rural Development office in Krishi Bhavan, civil servants are running a hurried calculation. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) had been the policy lifeline-of-last-resort built for moments exactly like this. The Act guarantees 100 days of unskilled wage labour per rural household per year at a notified wage. As migrants returned to their villages, MGNREGA enrolment surged.

By end of FY 2020-21, MGNREGA had provided 389 crore person-days of work — the highest ever in its 15-year history — to 11.2 crore households. Total spending: ₹1.11 lakh crore (vs original budget ₹61,500 crore — a 80% overshoot). It was the largest counter-cyclical employment intervention any country ran during COVID.

Three years later, in May 2024, the same MGNREGA was being criticised from a different angle. Sustained budget allocation had dropped to ₹86,000 crore. Wage payment delays averaged 39 days. Aadhaar-based payment system mismatches had left 8 crore worker accounts inactive at peak. The Direct Benefit Transfer (DBT) system that powered MGNREGA wages had become so efficient at eliminating intermediaries that, in some cases, it had also eliminated the workers — when names didn't match Aadhaar exactly. And economists at the Indian Statistical Institute were arguing that India should stop tinkering with targeted schemes and shift to a Universal Basic Income (UBI) — a flat monthly transfer to all citizens.

What is "inclusive growth," and what does India's safety-net architecture look like?

Why this matters for UPSC

Inclusive-growth schemes are a standard GS-III topic — Prelims tests MGNREGA + DBT + JAM trinity (2014, 2017, 2019, 2022, 2024) and UBI (2017, 2021, 2024). Mains questions on counter-cyclical employment, targeted vs universal welfare, DBT savings appear regularly. The 2024 Economic Survey chapter on social-sector spending + the 2017 Economic Survey UBI proposal are touchstones for any answer.