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Indian Economy Assignment on NREGA.

National Rural Employment Guarantee Act of India, 2005.

The National Rural Employment Guarantee Act of India was signed by the president on 5th September, 2005. Some of the provisions of NREGA are as follows: a) Every household in the rural areas of India shall have a right to at least 100 days of guaranteed employment every year for at least one adult member, for doing casual manual labour at the rate of Rupees 60 per day; b) The Programme may also provide, as far as possible, for the training and up-gradation of the skills of unskilled labourers; c) Wages may be paid in cash or in kind or both, taking into account the guidelines and recommendations of the State Council on this matter as far as possible; d) Employment shall be provided within a radius of 5 kilometres 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 transport allowances and daily living allowances shall be paid in accordance with Programme Rules; e) A proportion of the wages, not exceeding 5%, may be deducted as a contribution to welfare schemes organized for the benefit of labourers employed under the Programme, such as health insurance, accident insurance, survivor benefits, maternity benefits and social security schemes. In a nutshell, it can be said that this scheme was introduced to provide the rural population with economic safety and stability, so that their income levels are increased and hence there is a rise in

their consumption. This was done so that the population pressure on the urban areas due to migration is reduced and hence the process of economic development takes place in our country. This scheme is applicable throughout India except the state of Jammu and Kashmir. A national conference of legal experts was held under the chairmanship of honourable minister of rural development on 25th Nov., 2008 at PUSA in New Delhi. Some of the opinions which the experts came up with in the open house discussions were as follows: a) Mr. K. Uthirapathy, Member Secretary, Puducherry State Legal Services Authority observed that since empirically it is found that the out turn of male and female workers are not the same, payment of equal wages to men and women workers is resented by male workers. In Pondicherry, the work site supervisor gets paid out of the share of wages of the workers. This causes disgruntlement among the workers. b) Mr. U. Sarathchandran, Member Secretary, Kerala State Legal Services Authority observed that the political interference poses hindrances in the dissemination of information. The legal literacy and education camps are very helpful for awareness generation. c) Mr.V.R.Reddy, Member Secretary, AP State Legal Services Authority, underlined that there is a need for full time dedicated legal authorities to conduct Lok Adalats and educational activities on NREGA. He suggested the model of Pension Lok Adalats for grievance redressal in NREGA. d) Mr.D. K. Basu, Retired Judge, High Court, West Bengal stated that the awareness generation about the law and the involvement of the NGOs will be critical for the successful implementation of NREGA.

A survey was carried out by the Institute of Applied Manpower Research evaluating the effects of NREGA, which covered 20 districts of our country. According to this report, some of the pros and cons of the NREGA scheme can be discussed below. Pros: a) Two-thirds of the people covered in the survey reported that the wages under the NREGA scheme are more than the normal wage levels. Hence the income levels of the beneficiaries were reported to increase. b) Out of the 1200 beneficiaries in the northern states covering 4 districts, around one-fourth of them were women participants. Female participation was reported to be higher than the male participation in the southern states which covered 3 districts. Beneficiaries hailing from ST are significant in numbers in the eastern, and north east region. The number of male beneficiaries were more than the female beneficiaries, but there was much more increase in female participation compared to the past. c) Migration was also reported to decrease from the rural to urban areas in search of work due to the creation of various job opportunities in the rural areas due to the implementation of NREGA scheme. d) Women and men are reported to be paid equally for the same amount of work done by them. There were no gender discrimination practices being carried out. Cons: a) Though it was mandatory to provide transport allowance to job card holders in the event of work site falling beyond the distance of 4 km, it was found in the survey that no such

allowance was paid in spite of working in sites falling beyond the stipulated distance. b) 75% of the people surveyed in the Eastern region reported that there was no electricity at their houses. This shows that the people living there were not benefitting from this scheme. c) Cases of delay in payments has been reported in the state of Andhra Pradesh, the people working there didnt got their share for as long as four months. d) The records are not maintained under and hence all the workers are not registered under this scheme. This leads to various problems. e) With an increased purchasing power in the hands of poor people, an increase in the sale of Indian made foreign liquor(IMFL) was reported among the beneficiaries under this scheme.(Arindam Chaudharys blog NREGA IS A GREAT DEVELOPMENTAL INITIATIVE, BUT THE GOVERNMENT HAS TO ENSURE THAT THE ADDITIONAL INCOME IN THE HANDS OF THE RURAL POOR GETS MOBILISED, June 25, 2010.) Quantitative Measures MGNREGA report 2008-09 No. Of HHs who dema nded empl oyme nt 1251 No. Of HHs who were provi ded empl oyme nt 1218 SCs( % of STs %of lacs SC (la ST ) partic cs) partic ipatio ipatio n n Wo me n (lac s) %of wom en partic ipatio n Avg pers onda ys per HH No. Of HHS availe d 100 days of empl oyme nt 7055

586 28.87 49

24.39 105 51.82 16.6




5.6 6

3.1 3

MGNREGA report (2011-12) No. Of HHs who dema nded empl oyme nt 5038 0213 No. Of HHs who were provi ded empl oyme nt 4989 4603 SCs % of STs %of (lac SC (lac ST s) partic s) partic ipatio ipatio n n Wo men (lac s) %of wom en partic ipatio n Avg pers onda ys per HH No. Of HHS availe d 100 days of empl oyme nt 3896 589

466 22.01 386 18.24 101 48.17 42.4 0.5 2.2 97.7 3 3 6 4

As it can be seen from the above tables, this scheme was proved to be a great success, there was an increase in the no. of HHs demanding for job opportunities. The no. of SCs, STs and women increased over the time and they were proved to be the greatest beneficiaries. There was a decrease in the % of women participation on comparative basis(to men), but in absolute terms the participation of women increased as explained in the above part of the paper. Potential gainers and losers from the policy Empowerment of women proved to be the highlighting benefit of this scheme. SCs and STs were also benefitted from this programme. Though it was seen that the incomes/earnings generated from this

scheme were not utilised in the right direction by the male members, since they engaged on the consumption of alcohol and tobacco. The government has to face huge expenditures, since there are many loopholes in our tax system. Most of the people in India try to evade taxes, this forces the governments to spend it from the state treasuries, thus leading to an increase in the fiscal deficit. The wages offered is more than the normal wage rates prevailing in the markets, the private corporate houses to suffer owing to this, because they have to pay more money to the farmers than what they used to pay them before, this leads to an increase in their cost of production. References 1. Mr. Diganta Mukherjee, Mr. Uday Bhanu Sinha, Understanding NREGA: A simple theory and some facts, CDE. 2. Minutes of the National Conference of Legal Experts on NREGA held on 25th November, 2008, at PUSA, New Delhi. 3. All-India Report On Evaluation Of NREGA:A Survey Of Twenty Districts, INSTITUTE OF APPLIED MANPOWER RESEARCH, Plot No. 25, Sector A-7, Narela, Delhi 110040. 4. 5. 6. .(Arindam Chaudharys blog NREGA IS A GREAT DEVELOPMENTAL INITIATIVE, BUT THE GOVERNMENT HAS TO ENSURE THAT THE ADDITIONAL INCOME IN THE HANDS OF THE RURAL POOR GETS MOBILISED, June 25, 2010.)