DOES PARTICIPATION IN TWO LIVELIHOOD PROGRAMS MAKE THE LOW-INCOME HOUSEHOLDS ANY BETTER?

61 pagesIncome support programs like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and recently launched Prime Minister Kisan Samman Nidhi (PM-kisan) support over 90 million households together across rural India. Many researchers look at these programs as alternative policy options due to the negative effect of cash benefits on demand for conditional income support programs like MGNREGS. This paper investigates the alternative nature of these schemes by estimating the negative effect of PM-kisan on demand for work under the MGNREGS. To do so, we tracked 611 households from the Tata-Cornell Institute's survey on nutrition and income for benefits under both schemes for 2018 and 2019. The average treatment effect on treated was estimated using the difference-in-differences method. The result holds the hypothesis showing almost a decrease of 13 MGNREGS workdays in households receiving cash transfers under the PM-kisan program relative to the households not receiving cash benefits. This result bolsters the opinion about the alternative nature of both schemes as a policy option. Furthermore, PM-kisan beneficiary households in Maharashtra forgo more than 44 percent of PM-kisan benefit (INR 6000) by doing less work under MGNREGS in 2019. These losses are subjective to the prevailing wage rates in states