According to Progress in providing employment for the poor: The national public works programme in India (2010) by Rebecca Holmes, Jenny Morgan and Jessica Hagen-Zanker, Overseas Development Institute, http://www.developmentprogress.org/sites/default/files/ind
• MGNREGA’s participatory approach is supported by a three-tiered system of governance called the Panchayati Raj system.
• Registration for MGNREGA is undertaken at the lowest tier of local government – the gram panchayat – which means that more people have been able to access the service and register for job cards. Gram panchayats estimate the local demand for work, suggest suitable projects, issue job cards for new job seekers, monitor worksites and implement works. Payment for work is made through banks or post offices, which can be opened free of charge, which adds to the accessibility of MGNREGA.
• Intermediary panchayats then ensure that job seekers are provided work within 15 days, and identify appropriate works if the gram panchayat fails to do so. Finally, district panchayats are required to develop five-year plans based on overall district needs and to coordinate MGNREGA activities at the district level.
• Domestically financed, MGNREGA has scaled up rapidly, from 200 districts in 2006 to national coverage in 2008. It now reaches over 40 million households and has created over 1.7 billion person days of employment. MGNREGA is the only rights-based employment guarantee programme in the world, and it has stimulated the development of a range of similar initiatives in other countries in the South Asian region.
• The budget allocated to MGNREGA has increased as the programme has expanded nationally. In the first fiscal year of the Act, 2006/07, expenditure was $1.76 billion. In 2009/10, $6 billion was allocated. This amounts to around 0.5% of GDP, 3.3% of budget expenditure and 10% of planned expenditure.
• In 2009/10, over 43 million rural households in India demanded work. Of these, 99% were provided with work.
• During 2009/10 in Rajasthan, over 344 million person days have been created, in Uttar Pradesh over 248 million and in Tamil Nadu over 222 million.
• In 2009/10, a national average of only 7% of households employed under MGNREGA completed 100 days of work. Rajasthan, Uttar Pradesh and Tamil Nadu were more successful than other states in this regard, providing the full 100 days to 12%, over 14% and 7% of households, respectively.
• SCs and STs represent 14% and 8% of the population in India, respectively, but their representation in MGNREGA is almost 20%. MGNREGA also prioritises works on irrigation facilities on land owned by households belonging to SCs/STs or on land of the beneficiaries of land reform. In 2008/09, 20% of MGNREGA works supported the provision of irrigation facilities on land owned by SCs/STs, compared with 10% in 2006/07 and 15% in 2008/09, suggesting that this focus is an increasing priority.
• Specific provisions to support women’s participation in MGNREGA include priority to work on sites close to home (within 5km) and provision of childcare facilities. Overall, women represented 48% of participants in 2008/09 and 46% of participants in 2009/10.
• In Rajasthan and Tamil Nadu, the proportions of women receiving days under MGNREGA were much higher than the national average, at 64% and 78%, respectively, whereas in Uttar Pradesh it was much lower, at only 14%.
• Many factors influence the number of women employed in MGNREGA, including existing cultural and social norms, wage rates and the provision and quality of child care facilities.
• In some states, cultural norms prevent women from working outside the home or working with men, reflected in household decisions to send only men for MGNREGA work, thereby denying women’s rights to access employment days (Samarthan Centre for Development Support, 2007). Entrenched ideas about the gender division of labour also affect the type of work seen as acceptable for women to do.
• Studies also show that, even when women want to work, the panchayat may have excluded them because of social norms around the ‘appropriate’ type of work for women (Khera and Nayak, 2009). In Madhya Pradesh, for example, although women’s representation overall is above 40%, in practice women receive fewer days on MGNREGA because they are not involved in all types of work available. Women are often given ‘soft’ work such as throwing out the soil from digging wells, which requires fewer days.
• Evidence from Andhra Pradesh demonstrates that MGNREGA can reduce vulnerability to external shocks, in particular weather-related shocks, which affect agricultural productivity in India, by smoothing income and consumption.
• Johnson (2009) finds that MGNREGA participation in the lean season responds to weather-related shocks in the wet season, with more households participating in MGNREGA (although not necessarily for more days). The study also finds that participation levels in MGNREGA are more responsive to weather-induced shocks than other government welfare programmes.
• Another important benefit of MGNREGA in reducing vulnerability has been an increase in household wage income. Average household wage income increased from Rs. 2,795 in 2006/07 to Rs. 4,060 in 2008/09.
• Drèze and Khera (2009) find that MGNREGA also supports household health. A survey of six states in northern India found that the majority (57%) of the sample workers had used a part of their wages to buy medicine or treat an illness in the family. In Andhra Pradesh, 13% of household earnings from MGNREA are spent on health security (Kareemulla et al., 2009).
• The increase in the average wage has also supported rural purchasing power and boosted overall spending, particularly in the face of drought and higher food prices. Mahambare (2010) finds that MGNREGA-generated consumption expenditure amounted to nearly 1.4% of total rural consumption and nearly 1% of total household consumption in India in 2010, nearly doubling its share since 2007/08. Dev (2009) argues that employment on MGNREGA also helped cushion the impact of the recent food price crisis. Although food prices in India did not rise as sharply as in other countries, because of India’s food management policies, they were slightly higher than normal. MGNREGA resulted in higher purchasing power and generated demand for food in rural areas.
• Evidence from a study carried out in 2008 by the Centre for Science and the Environment (2008) suggests that assets and infrastructure have reduced vulnerability to food insecurity and improved livelihood opportunities. In Nuapada district in Orissa, where people are highly dependent on forest land, 43% of the community felt that the availability of fuel wood and/or fodder had increased as a result of MGNREGA works. A total of 15% of respondents had also diversified their crop mix from paddy and biri to produce groundnut, millet and vegetables, and 15% of the population reported that MGNREGA had led to increased water availability.
• The same study found that, in Sidhi, in Madhya Pradesh, MGNREGA works had reduced the population’s dependence on the forest by providing alternative livelihood options. MGNREGA works have also improved access to better irrigation facilities, which has impacted positively on agriculture in the area. MGNREGA has been responsible for the construction of ponds, tanks and wells on SC and ST land. Respondents also reported crop diversification into vegetables. A total of 78.6% of respondents felt that MGNREGA works had led to increased water availability.
• Similar results were found by a 2007 study by the Samarthan Centre for Development Support (2007) in Uttar Pradesh, where 30% of respondents highlighted increased food security and improved diets, particularly for children, as a result of MGNREGA employment.
• Kareemulla et al. (2009) found that, in Andhra Pradesh, 18% of household earnings from MGNREGA is spent on education. Similarly, the Samarthan Centre for Development Support (2007) found that households use MGNREGA wages to increase access to and improve quality of children’s education, by paying admission fees, purchasing books, providing tuition and buying school uniforms. In Uttar Pradesh, improved road connectivity has enabled children to attend school more regularly by bicycle or on foot.
• Uppal (2009) found that child labour decreases with parents’ registration and participation in MGNREGA. Meanwhile, child health as measured by anthropometric measures improves when parents register and work for MGNREGA.
• In Gujarat, Madhya Pradesh and Jharkhand, it was found that the bribe that local officials demand for an application form for a job card may range from Rs. 5 to Rs. 50, where a day labourer may earn only Rs. 60 or so.
• The demand-led nature of the programme also entails complicated calculations, as the number of households that will apply for MGNREGA and therefore the amount of work to be allocated cannot be guaranteed. In Madhya Pradesh, Holmes et al. (2010) found that, in practice, MGNREGA was supply- rather than demand driven, with panchayats allocating work to households rather than households applying for it when needed.
• Limited staff capacity and skills in implementing MNGREGA result in serious deficits in effectively delivering employment for the rural poor. Ambasta et al. (2008) suggest that MGNREGA is constrained by a lack of professionals, in particular programme officers, who were to be appointed at state level to support implementation, and accredited engineers, also to be appointed at state level to support timely and transparent costing of works to be undertaken. In many cases, the capacity of the panchayats is lagging. As one interviewee stated: ‘the panchayats are the weakest link in the roll out of NREGA’ (Holmes et al., 2010). In addition, Drèze (2009) reports routine violations of the entitlements of MGNREGA workers, ‘whether it is their entitlement to work on demand, or to minimum wages, or to payment within 15 days, or to basic worksite facilities.’
• There is limited civil society activity in some states. A survey undertaken by Drèze and Khera in 2009 reported still very low awareness levels among MGNREGA workers of their rights, including employment on demand; minimum wages; payment within 15 days; and basic worksite facilities. This is linked to low levels of civil society intervention.
• During the 1990s, India faced the lowest growth rate of rural employment since independence, with annual growth of rural employment falling from 2.03% to 0.67% over the period 1993/94 to 1999/00, directly attributed to the stagnation of agricultural employment (Pal and Ghosh, 2007).
• According to National Sample Survey (NSS) data, there was a very large increase in landless households as a percentage of total rural households, from around 35% in 1987/88 to as much as 41% in 1999/00.
• As growth has accelerated in India over the past few decades, poverty has declined. In the 1970s and 1980s, poverty rates fell rapidly, in large part because of the agricultural ‘green revolution’ in the 1970s. Poverty declined from 64% in 1967 to 50% in 1977 and to 34% in 1986.
• In 2004/05, the number of people still living in poverty was 28% and, because of population growth, the absolute number of poor people has declined only marginally, from 320 million in 1993/94 to 302 million in 2004/05.
• In April 2010, the Planning Commission of India (PCI) accepted a new methodology for estimating poverty, which pushed the proportion of people living below the revised poverty line to 37.2%.
• Poverty rates remain highly concentrated in rural areas in absolute numbers, because 75% of the population lives in rural areas. Poverty is also highly correlated with particular social and ethnic groups. Owing to the hierarchical and unequal nature of the caste system, Scheduled Castes (SCs), Scheduled Tribes (STs) and Other Backward Castes (OBCs) are denied access and entitlements to economic, civil, cultural and political rights. Data from 2000 show that the poverty headcount in rural areas was highest among SCs and STs (45.8% and 35.9%, respectively) compared with 21% among non-SCs/STs.
• The rural poor remain highly reliant on agricultural day labour work. The proportion of casual workers increased from 65% in 1972 to 80% in 2002 among male wage earners, and from 89% to 92% among female wage earners.
• In terms of numbers, India has 82 million landless rural households dependent on agricultural wage employment, as well as 80 million marginal farmers with low asset positions, who turn to off-farm work for survival.
• According to the United Nations Development Programme (UNDP, 2009), 41.6% of India’s population is living in poverty according to the $1.25 poverty line. However, the national poverty line puts the number at a lower 28.6% of the population (over 300 million people).
According to the Annual Report 2009-2010 of the Ministry of Rural Development, http://rural.nic.in/annualrep0910/anualreport0910_eng.pdf:
• In 2009-2010, upto December 2009, an amount of Rs. 18950 crore has been utilized out of Rs. 39,100 crore, during the same period 160 crore persondays employment has been generated across the country. At the national level, average wage paid under MGNREGA has increased from Rs.65 (FY 2006-07) to Rs. 88.48 in FY 2009-10. In FY 2009-10, 36.51 lakhs works were undertaken, of which 51% constituted water conservation, 16% rural connectivity, 14% land development and provision of irrigation facility to individual beneficiaries constituted around 17%.
• During the first year of implementation (FY 2006-07) in 200 districts, 2.10 crore households were employed and 90.5 crore persondays were generated. In 2007-08, 3.39 crore households were provided employment and 143.59 crore persondays were generated in 330 districts. In 2008-09, 4.51 crore households have been provided employment and 216.32 crore persondays have been generated across the country.
• At the national level, average wage paid under MGNREGA has increased from Rs.65 (FY 2006-07) to Rs. 88.48 in FY 2009-10. This has led to a strengthening of the livelihood resource base of the rural poor in India. In 2008-09, 67% of funds utilized (Rs.18200.03 crore as wage expenditure) were in the form of wages paid to the labourers. In 2009-10, 69% of the funds have been utilized in the form of wages (Rs.18806.39 crore as wage expenditure)
• The Programme had a high workforce participation of marginalized groups like SC/ ST (54%) in FY 2008-09. Women workforce participation has also surpassed the statutory minimum requirement of one third participation. In 2008-09, women participation was 48% which has increased to 49% in FY 2009-10.
• Payment of wages through banks and post offices has been statutory. In the current financial year 2009-10, so far 8.57 crore bank and post offices accounts have been opened to disburse wages.
• MGNREGA workers have been identified as a category for Jana Shree Bima Yojana of LIC for insurance cover. Efforts are also on to extend the benefits of Rashtriya Swasthya Bima Yojana to MGNREGA workers.
• In FY 2008-09, 27.75 lakhs works were undertaken with 46% water conservation works. Similarly, in FY 2009-10, 36.51 lakhs works were undertaken, of which 51% constituted water conservation, 16% rural connectivity, 14% land development and provision of irrigation facility to individual beneficiaries constituted around 17% with remaining 2% works related to other activities. Out of 36.51 lakh works undertaken, 13.75 lakhs works have already been completed.
According to the Highlights of Quarterly Progress Report on National Rural Employment Guarantee Act (NREGA), Rural Development Ministry, 15 September, 2009, http://www.pib.nic.in/release/release.asp?relid=52639, http://www.pib.nic.in/release/release.asp?relid=52648
1. Evolving the design of the wage employment programs to more effectively fight poverty, the Central Government formulated the National Rural Employment Guarantee Act (NREGA) in 2005.
2. New initiatives: To continue focus on critical issues and priority areas highlighted by the President to strengthen NREGA, the Ministry has held high level workshops and extensive consultations. The action taken by the Ministry is as follows:
• District Level Ombudsman: Instructions on Ombudsman have been issued. The Ombudsman will be appointed by the State Government on the recommendation of the selection committee. Ombudsmen will be well-known persons from civil society. The Ombudsman will receive complaints from NREGA workers and others on any matters, consider such complaints and facilitate their disposal in accordance with law.
• NREGA partnership with Unique Identification Development Authority of India (UIDA): NREGA partnership with UIDA has been initiated.
• Social Audits: Social Audit is an important tool by which the people can improve and devise strategies to enhance the quality of implementation of NREGA. The Act was amended to provide for procedures on conducting social audits.
• Independent Monitoring Mechanisms: 100 eminent citizens will be identified to further report on the progress of NREGA.
• Convergence: The Ministry of Rural Development has developed and disseminated guidelines for convergence of NREGS with different Schemes and specific programmes. 115 pilot districts in 23 states have been identified for convergence.
• Enlarge the scope of works permitted under NREGA presently limited to unskilled manual labour: The Act has been amended to include provision of irrigation facility, horticulture plantation and land development facilities to land owned by households of the small farmers or marginal farmers.
• NREGA has the potential to diminish the adverse impact of drought by placing purchasing power in the hands of the people. Advisories were issued to all 11 drought affected states to ensure that adequate funds and shelf of project have been made available to the Districts.
• 115 pilot districts in 23 states have been identified for convergence among various rural development programs of the ministry. He also informed that the scope of works permissible under NREGA has been enlarged to include the provision of irrigation facility, horticulture plantation and land development facilities to land owned small or marginal farmers. Efforts have been made to protect the non negotiable instruments in the act. Gram Panchayats have been asked to ensure that works on lands of SC / ST and BPL receive first priority. Provision of Ombudsman at district level, setting up of Eminent Citizen’s Panel along with the reports from the National monitors will play a a major role in the monitoring of implementation of the Act.
• Efforts are on to upgrade the capacity of NIRD for better training in rural development and governance reforms are being undertaken to upscale the capacity of CAPART. NIRD and CAPART have been assigned the responsibility to prepare training modules for flagship programs.
According to Chakraborty, Pinaki (2007): Implementation of the National Rural Employment Guarantee Act in India: Spatial Dimensions and Fiscal Implications, Bard College, http://papers.ssrn.com/sol3/papers.cfm
- The National Rural Employment Guarantee Act (NREGA) was enacted by the Indian Parliament in 2005 to provide a minimum guaranteed wage employment of one hundred days in every fiscal year to rural households with unemployed adult members prepared to do unskilled manual work.
- In the past, public employment programs in India targeted at the poor were generally identified with the poverty alleviation. NREGA goes beyond poverty alleviation and recognizes employment as a legal right. The only example of guaranteed state-sponsored employment in India is the Maharashtra Employment Guarantee Scheme, which was enacted and implemented under the extraordinary circumstances of severe drought in the state during 1970 to 1973 as innovative anti-poverty intervention.
- NREGA goes beyond poverty reduction and recognizes employment as a legal right. Skeptics considered it as a populist measure while others have considered it as a landmark initiative towards poverty alleviation and empowerment of poor.
- During the 1980s and 1990s, one would observe that during the tenth Five Year Plan, the growth rate of employment has slowed down considerably. The annual rate of growth of rural employment was around 0.5 percent per annum between 1993–94 and 1999–2000, as compared to 1.7 percent per annum between 1983 and 1993–94 and also the current daily status unemployment rate in rural areas increased from 5.63 percent in 1993–94 to 7.21 percent in 1999–2000.
- The deceleration in employment growth was further reinforced by a sharp cut back in public spending on rural employment programs (Dev 2002). In this context, the enactment of NREGA is appropriate and timely. Although, the aggregate employment figure shows a decline, national sample survey estimates of unemployment rates in 1999–2000 showed that the rate of unemployment in “usually unemployed” category in 1999–2000 was only 2 percent for the male labor force and less than 2 percent for the female labor force.
- Despite low unemployment rates, the incidence of income poverty in rural areas is at least four times the incidence of unemployment as per the current daily status, which implies that the number of poor far outweighs the number of poor for want of work
Provisions of NREGA
The various provisions of the NREGA are the following: (i) it provides at least one hundred days of guaranteed wage employment in every fiscal year for at least one adult member of every household prepared to do unskilled manual labor at the wage rate specified by the state government; (ii) creation of durable assets and strengthening the livelihood resource base of the rural poor shall be an important objective of the scheme. The state council shall prepare a list of permissible works, as well as a list of “preferred works”; (iii) the program may also provide, as far as possible, for the training and upgradation of the skills of unskilled laborers; (iv) wages may be paid in cash, in kind, or both, provided that at least one-fourth of the wages shall be paid in cash only; (v) employment shall be provided within a radius of five kilometers of the village where the applicant resides at the time of applying. In cases where employment is provided outside such radius, it must be provided within the block, and the laborers shall be paid 10 percent of the wage rate as extra wages to meet additional transport and living expenses; (vi) in case the number of children below the age of six years accompanying the women working at any site is five or more, provisions shall be made to depute one women worker to look after such children. The person deputed for this shall be paid the statutory minimum wage; and (vii) a proportion of the wages, not exceeding 5 percent, may be deducted as a contribution to welfare schemes organized for the benefit of laborers employed under the program, such as health insurance, accident insurance, survivor benefits, maternity benefits, and social security schemes