New Delhi, Feb. 5 -- The recent budget marks a shift in India's approach to short-term state-backed employment support. It has reduced funds for the scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which is expected to be phased out, to Rs.30,000 crore from last year's spending of Rs.88,000 crore and allocated over Rs.95,000 crore to the new Viksit Bharat Guarantee for Rozgar and Ajeevika Mission-Gramin (VB-G RAM G) scheme that will replace it.

What explains this shift and what is its context?

In 2004, India made a distinctive choice: an unconditional public employment guarantee for rural citizens. Most countries, up to that point, had relied on conditional income support or unemployment assistance duri...