A PROJECT REPORT

ON

“Critical Analysis of MGNREGA”

SUBMITTED TO THE WELINGKAR INSTITUTE OF MANAGEMENT,

MUMBAI

RURAL DEVELOPMENT IN INDIA

BY

Dhananjay Nagpure Roll No: 16

Gayathri Menon Roll No: 18
Kumara swamy MJ Roll No: 24
Mayur Hadawale Roll No: 27
Sampada Rakesh Roll No: 42
Shivani Singh Roll No: 44

UNDER THE GUIDANCE OF

PROF. PRAVEEN SINGH

PGDM RURAL MANAGEMENT

Welingkar Institute of Management, Mumbai.
[2020-2022]
 TABLE OF CONTENT

Page
Sr. No. Title Page No
Acknowledgement ii

Table of content iii

List of tables iv

List of graphs v

Chapter 1 Summary 1

Chapter 2 Definition of milk and oil as products 2

Chapter 3 Demand and supply functions 12

Chapter 4 Price, demand and supply of quantity 17

Chapter 5 Domestic demand and supply 26

Chapter 6 Future market trends 33

Analysis 38

References 39

LIST OF TABLES
LIST OF FIGURES
 CHAPTER 1
EXECUTIVE SUMMARY
 CHAPTER 2
INTRODUCTION
 2.1 The Start

Mahatma Gandhi Employment Guarantee Act 2005 or NREGA later called as Mahatma Gandhi
National Rural Employment Guarantee act is an Indian labour law and social security measure that
aims to guarantee the 'right to work'. This act was passed in September 2005 under the UPA
government of Prime Minister Dr. Manmohan Singh.
MGNREGA aims at enhancing livelihood security in rural areas by providing at least 100 days of
wage employment in a financial year to every household whose adult members volunteer to do
unskilled manual work. The Ministry of Rural Development (MRD), Government of India is
monitoring the entire implementation of this scheme in association with state governments

The MGNREGA was initiated with the objective of "enhancing livelihood security in rural areas by
providing at least 100 days of guaranteed wage employment in a financial year, to every household
whose adult members volunteer to do unskilled manual work". Another aim of MGNREGA is to
create durable assets (such as roads, canals, ponds and wells). Employment is to be provided within
5 km of an applicant's residence, and minimum wages are to be paid. If work is not provided within
15 days of applying, applicants are entitled to an unemployment allowance. That is, if the
government fails to provide employment, it has to provide certain unemployment allowances to
those people. Thus, employment under MGNREGA is a legal entitlement.
 The scheme was introduced in 200 districts during financial year 2006-07 and 130
districts during the financial year 2007-08
 In April 2008 NREGA expanded to the entire rural area of the country covering 34
States and Union Territories, 614 Districts, 6,096 Blocks and 2.65 lakhs Gram Panchayat.
 The scheme now covers 648 Districts, 6,849 Blocks and 2,50,441 Gram Panchayats in
the financial year 2015-16.

The Act aims to follow the Directive Principles of State Policy enunciated in Part IV of the
Constitution of India. The law by providing a 'right to work' is consistent with Article 41 that directs
the State to secure to all citizens the right to work. The statute also seeks to protect the environment
through rural works which is consistent with Article 48A that directs the State to protect the
environment.

2.2 Salient Features of the Act

1. Adult members of a rural household, willing to do unskilled manual work, may apply for
registration in writing or orally to the local Gram Panchayat
2. The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the
photograph of all adult members of the household willing to work under MGNREGA and is free of
cost
3. The Job Card should be issued within 15 days of application.
4. A Job Card holder may submit a written application for employment to the Gram Panchayat,
stating the time and duration for which work is sought. The minimum days of employment have to
be at least fourteen.
5. The Gram Panchayat will issue a dated receipt of the written application for employment,
against which the guarantee of providing employment within 15 days operates
6. Employment will be given within 15 days of application for work, if it is not then daily
unemployment allowance as per the Act, has to be paid liability of payment of unemployment
allowance is of the States.
7. Work should ordinarily be provided within 5 km radius of the village. In case work is provided
beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses
8. Wages are to be paid according to the Minimum Wages Act 1948 for agricultural labourers in
the State, unless the Centre notifies a wage rate which will not be less than Rs. 60/ per day. Equal
wages will be provided to both men and women.
9. Wages are to be paid according to piece rate or daily rate. Disbursement of wages has to be
done on weekly basis and not beyond a fortnight in any case
10. At least one-third beneficiaries shall be women who have registered and requested work under
the scheme.
11. Work site facilities such as crèche, drinking water, shade have to be provided
12. The shelf of projects for a village will be recommended by the gram sabha and approved by the
Zilla panchayat.
13. At least 50% of works will be allotted to Gram Panchayats for execution
14. Permissible works predominantly include water and soil conservation, afforestation and land
development works
15. A 60:40 wage and material ratio has to be maintained. No contractors and machinery is
allowed
16. The Central Government bears the 100 percent wage cost of unskilled manual labour and 75
percent of the material cost including the wages of skilled and semi-skilled workers
17. Social Audit has to be done by the Gram Sabha
18. Grievance redress mechanisms have to be put in place for ensuring a responsive
implementation process
19. All accounts and records relating to the Scheme should be available for public scrutiny

2.3 STUDY OBJECTIVES

 
Main Objectives
The main objective of the present study is to assess the impact of
MGNREGA on the overall living status of rural households, particularly of poor
households. However, the specific objectives of the study are mentioned as
Follows:
 

Specific Objectives of the Study

i. To assess the impact of the programme on availability of employment in
rural areas;
  
ii. To assess the impact of on wages and earnings in general and rural wage
rates in particular;
 
iii. To assess the impact on living status of poor households;
 
iv. To identify gaps in administrative structure and implementation process of
the programme; and
 
v. To suggest measures for strengthening the implementation of the
programme.
 

2.4 NEED FOR THE STUDY

Enactments of MGNREGA and subsequent policies and programs of the government have
extensive impacts in the field of rural development and implement the right to employment. Since
the implementation of MGNREGA, several studies and reports have been written about its impact
on life and livelihood of the rural wage labours, however no empirical study has been come in the
light in context of understanding the right to work and government supported programmes in the
rural area is impacting relations between earlier employer and agricultural labourers. The study
reveals that despite numerous problems, MGNREGA is a program that has begun to make a
difference in the lives of BPL. Furthermore, it is popular among the workers, who routinely ask if
more work could be made available to them under the MGNREGA. This present research on
impact evaluation of the MGNREGA is intended to assess the impact of this scheme on the overall
quality of life of people by gauging different parameters associated with the improvement of
overall quality of life Of BPL people such as impact on income, earning levels of each household,
expenditure on food and non-food items, household and cultivable assets creation by the
beneficiaries. This study also captured the impact of the scheme to arrest out-migration, views and
feed-back of the beneficiaries on various faucets of implementation of the scheme at grass root
level right from the stage of issue ofjob cards etc. As stated earlier, MGNREGA is a flagship
programme of government of India which is unique and first of its kind. It is in implementation in
all the districts 7 of the country since April, 2008. The numbers of studies were taken up by NGOs,
researchers, institutions etc. which looked into the impact of MGNREGA on different parameters
and also examined its number of implementation issues. Some studies found substantial positive
impact of MGNREGA on wage rate, food security, migration whereas some studies reported
minimum and delayed wage payment, non-payment of unemployment allowances, failure in
halting migration, errors in wage calculation, number of operational bottlenecks, corruption etc.
Most of the studies were concerned on systemic defects rather than probing the impact on
beneficiaries. At present, degree of impact, implementation procedure, Irregularities and corruption
of MGNREGA has become a hot issue of debate for researchers, academicians and politicians.
These conflicting views on implementation procedure, level of corruption and degree of impact of
MGNREGA etc. indicate that clear picture on functioning and effectiveness of Act has yet to
emerge. Further, there are many issues, which are straddling the implementing agencies right from
State or district to Gram Panchayat. Also there are issues such as non-homogeneity in its
effectiveness, region specific disparities and outcomes etc. Therefore the purpose of this evaluation
study is primarily to access how the MGNREGA project has impacted on the rural and agricultural
life of BPL households as well as the poor and disadvantaged women. It will also document the
findings and lessons learnt as the basis for post-project decision making; and to make
recommendations to strengthen the project for the future.
 CHAPTER 3
AN OVERVIEW ON MGNREGA

3.1 Introduction
NREGA Launched on 2nd February 2006 as a momentous initiative towards pro-poor growth. For
the first time, rural communities have been given not just a development program but also a regime
of rights. The National Rural Employment Guarantee Act, 2005 (NREGA) guarantees 100 days of
employment in a financial year to any rural household whose adult members are willing to do
unskilled manual work.
This work guarantee also serve other objectives: generating productive assets and skills thereby
boosting the rural economy, protecting the environment, empowering rural women, reducing rural
urban migration and fostering social equity, among others. The Act offers an opportunity to
strengthen our democratic processes by entrusting principle role to Panchayats at all levels in its
implementation and promises transparency through involvement of community at planning and
monitoring stages.
In context of Gujarat in Phase one it was introduced in 6 most backward districts of the State
namely Dahod, Banaskantha, Sabarkantha, Dings, Narmada and Panchmahal. It was implemented
in an additional 3 districts in Phase two 2007-2008 namely Navsari, Valsad and Bharuch and the
Scheme was extended to the rest 17 rural districts of the State from April 1, 2008 in Phase III.
MGNREGA is the first ever law internationally, that guarantees wage employment at an
unprecedented scale. The primary objective of the Act is augmenting wage employment. Its
auxiliary objective is strengthening natural resource management through creating rural
infrastructure works that address causes of chronic poverty like drought, deforestation and soil
erosion and so encourage sustainable development. The process outcomes include strengthening
grassroots processes of democracy and infusing transparency and accountability in governance.
The vision of the Government is enabling MGNREGA to become a transformative vehicle for
empowering local communities to enhance their livelihood security. Government of Gujarat has
taken several steps to ensure the Scheme is implemented effectively like encouraging decentralized
participatory management, improving delivery systems and public accountability & transparency.

3.2 Objectives of Mahatma Gandhi NREGA

The basic objective of the MGNREGA is to enhance livelihood security of the people in rural
areas by guaranteeing hundred days of wage employment in a financial year, to a rural household
whose members volunteer to do unskilled manual work. The poor masses of rural areas are
provided with an opportunity of means of livelihood and access to durable assets under
MGNREGA. The choice of works suggested in the Act address causes of chronic poverty like
deforestation, drought and soil erosion so that the enable to sufficient generation of employment
opportunities on a sustainable basis.

3.3 Time-line of MGNREGA

The following Table 4.3.1 depicts the time line of MGNREGA and modifications during the years
of its running.
 Table 3.3.1: The time line of MGNREGA

Aug, 2005 Feb, 2006 Apr, 2007 Apr, 2008 Oct, 2008 16 Feb, 2009 Oct, 2009

NREGA Came into 130 more Universaliz Wage MOU with Name
legalized force in districts ation of the transactio the postal changed
200 included scheme n through dept. to
districts banks/pos MGNRE
t offices GA

Source: www.mgnrega.nic.in

3.4 Goals of Mahatma Gandhi NREGA

 To provide backup or alternative source of employment to the vulnerable groups of society so
that they are strong and secure, both socially and economically.
 To create durable assets and strengthen the livelihood resource base of the rural poor.
 Flood management and drought-proofing in rural India.
 To act as a growth engine for sustainable development of an agricultural economy.
 Empowerment of the socially disadvantaged, especially women, Scheduled Tribes (STs) and
Scheduled Castes (SCs) through the processes of a rightsbased legislation.
 Deepening democracy at the grass- roots by strengthening Panchayati Raj Institutions.
 Effecting greater accountability and transparency in governance.
 To eliminate or atleast reduce practice of forced migration from rural to urban areas.
In view of the above advantages, MGNREGA is much more than being simply an initiative of
welfare. It is a constructive effort and a stepping stone for the development of Indian Economy.
Therefore, Mahatma Gandhi NREGA has 3 distinct goals:
 Promotive
 Protective
 Preventive
It protects the rural poor from vulnerabilities by providing them demand based employment. It
prevents risk associated with agricultural investment and forced migration of rural poor people. By
increasing the demand of consumers, it indirectly promotes and enhances prosperity in the economy
of rural areas. Therefore, Mahatma Gandhi NREGA is an influential instrument for ensuring
inclusive growth in rural India through its impact on livelihood security, social protection and
democratic empowerment

3.5 Mandate and Objectives:

The mandate of the Act is to provide 100 days of guaranteed wage employment in a financial year
(FY) to every rural household1 whose adult members volunteer to do unskilled manual work. The
objectives of the programme include:
 Ensuring social protection for the most vulnerable people living in rural India through providing
employment opportunities,
 Ensuring livelihood security for the poor through creation of durable assets, improved water
security, soil conservation and higher land productivity
 Strengthening drought-proofing and flood management in rural India
 Aiding in the empowerment of the marginalised communities, especially women, Scheduled
Castes (SCs) and Scheduled Tribes (STs), through the processes of a rights-based legislation,
 Strengthening decentralised, participatory planning through convergence of various anti-poverty
and livelihoods initiatives
 Deepening democracy at the grass-roots by strengthening the Panchayati Raj Institutions (PRIs).
 Effecting greater transparency and accountability in governance. MGNREGA has become a
powerful instrument for inclusive growth in rural India through its impact on social protection,
livelihood security and democratic governance.

3.6 A paradigm shift

The MGNREGA marks a paradigm shift from previous wage employment programmes either
planned or implemented in India’s history. It has an integrated natural resource management and
livelihood generation perspective. The transparency and accountability mechanisms under
MGNREGA create unprecedented accountability of performance, especially towards immediate
stakeholders. Some of its other unique aspects are outlined below:
1. Its design is bottom-up, people-centered, demand- driven, self-selecting and rights-based,
2. It provides a legal guarantee of wage employment,
3. It is a demand-driven programme where provision of work is triggered by the demand for work
by wage-seekers,
4. It has legal provisions for allowances and compensation, in case of failure to provide work on
demand, and delays in payment of work undertaken. In case work is not provided on time, the States
bear the cost of the unemployment allowance,
5. It overcomes problems of targeting through its self-targeting mechanism of beneficiary selection,
6. It incentivises states to provide employment as100 per cent of the unskilled labour cost and 75
per cent of the material cost of the programme is borne by the GoI,
7. Unlike the earlier wage employment programmes that were allocation-based, MGNREGA is
demand- driven and the transfer of resources from GoI to States is based on the demand for
employment in each of the States. This provides an additional incentive for the States to leverage the
act to meet the employment needs of the poor,
8. The order of devolution of financial resources to GPs (with GPs implementing 50 per cent of the
works in terms of cost) is unprecedented,
9. The bottom-up, people – centered, demand-driven architecture also means that a great share of
the responsibility for the success of the MGNREGA lies with the wage-seekers, GSs and GPs,
10. Social audit, a new feature of MGNREGA, creates unprecedented accountability of performance,
especially towards the immediate stakeholders,
11. A Report on the outcomes of MGNREGA is presented annually by the GoI to the Indian
Parliament and by the State governments to the State Legislatures. Given the radically new character
of the programme, an innovative approach is required for the effective implementation of
MGNREGA so that the novel elements of the Act can be properly realised on the ground at the
cutting-edge level of implementation (MGNREGA Sameeksha 2012).

3.7 Importance of Mahatma Gandhi NREGA:

The main objective of Mahatma Gandhi NREGA is as described in the Article: 41 of the Indian
Constitution - “giving citizens the right to work”. The Mahatma Gandhi NREGA is important due to
the following reasons:
• There was no guarantee of jobs in the previous all wage employment programmes, the
MGNREGA provided guaranteed job. Now there is uniform security of wage employment in the
entire country unlike before.
• Almost all the previous programmes were allocation based rather than demand based. This
criterion is the unique punch point of Mahatma Gandhi NREGA.
• The key element of Mahatma Gandhi NREGA is the provision of employment by the state to
those people who are not able to find alternative employment, which provides a form of social safety
net to the rural unemployment people.
• MGNREGA is an initiative for development, chipping in with essential public investment for
creation of durable assets without which the growth process can’t be possible in the most backward
regions of rural India.
• There is no time frame in other wage employment programmes but in Mahatma Gandhi
NREGA, employment will be given within 15 days of demand.
• In other wage employment programmes, there is no restriction on any person to be engaged as a
labour whereas in Mahatma Gandhi NREGA only job card holders that apply for employment can
be engaged as labourers. 97
• The duration of employment is dependent on duration of work in other wage employment
programme by implementing agency whereas in Mahatma Gandhi NREGA, a job card holder
applies for maximum 100 days.
• The payment of wages through post office and bank accounts is other innovative step that is
likely to reduce fudging of muster rolls on the part of the implementing agencies since don’t have
access to actual payments.
• Mahatma Gandhi NREGA are decentralized participatory planning, labour intensive work,
women’s empowerment, work-site facilities and above all accountability and transparency through
the provision of right to information and social audits. Information Technology is extensively used
in this programme to keep a close track on the works done and promote transparency and efficient
execution. So Mahatma Gandhi NREGA is a vital stepping stone for the Indian economy committed
to enhance its growth and not just a welfare initiative.

3.8 Permissible activities

Over the last few years there has been an increased demand from States to include new works
which would create an even stronger positive synergy between MGNREGA and agriculture and
allied rural livelihoods. In response to the demand, the provision in Schedule I has been amended
vide. Notification dated 4th May, 2012 to include additional works that can be taken up under
MGNREGA. The amended Schedule I provides that the focus of the scheme shall be on the
following works;
1. Water conservation and water harvesting including contour trenches, contour bunds, boulder
checks, gabion structures, underground dykes, earthen dams, stop dams and spring shed
development;
2. Drought proofing including afforestation and tree plantation;
3. Irrigation canals including micro and minor irrigation works;
4. Provision of irrigation facility, dug out farm pond, horticulture, plantation, farm funding and
land development;

5. Renovation of traditional water bodies including desilting of tanks;

6. Land development;
7. Flood control and protection works including drainage in water logged areas including
deepening and repairing of flood channels, chaur renovation, construction of storm water drains for
coastal protection;
8. Rural connectivity to provide all weather access, including culverts and roads within a village,
wherever necessary;
9. Construction of Bharat Nirman Rajiv Gandhi Sewa Kendra as Knowledge Resource Centre at
the Block level and as Gram Panchayat Bhawan at the Gram Panchayat level;
10. Agriculture related works, such as, NADEP composting, vermi-composting, liquid bio-manures;
11. Livestock related works, such as, poultry shelter, goat shelter, construction of pucca floor, urine
tank and fodder trough for cattle, azolla as cattle-feed supplement;
12. Fisheries related works, such as, fisheries in seasonal water bodies on public land;
13. Works in coastal areas, such as, fish drying yards, belt vegetation;
14. Rural drinking water related works, such as, soak pits, recharge pits;
15. Rural sanitation related works, such as, individual household latrines, school toilet units,
anganwadi toilets, solid and liquid waste management; (a) Construction of anganwadi centres (b)
Construction of play fields.
16. Any other work which may be notified by the Central Government in consultation with the State
Government.
All activities mentioned in items (4), (10), (11) and items (13) to (15) are allowed on land or
homestead owned by households belonging to the Scheduled Castes and the Scheduled Tribes or
below poverty line families or the beneficiaries of land reforms or the beneficiaries under the Indira
Awas Yojanaof the Government of India or that of the small or marginal farmers as defined in the
Agriculture Debt Waiver and Debt Relief Scheme, 2008, or the beneficiaries under the Scheduled
Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (2 of 2007).

3.9 Janmanrega - Citizen-centric Mobile Application (Beta Version)

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has inherent
provisions for proactive disclosure of information to its citizens in reference to implementation
of the MGNREGS. Citizen awareness is a key to efficient, effective and transparent execution of
the scheme, while the programme rests on participation principles. Paradigm shift from an
employment-oriented to a sustainable and productive livelihood support programme warrants
greater public engagement. Mobile phone acts as a mode of communication with people at
farther places, with greater ease and less time.
Janmanrega is an instrument for information flow to and from ground-level, which will connect
citizens with the system. An initiative towards good governance, Janmanrega is an interface to
improve quality of public services.

The Ministry of Rural Development (MoRD) launched ‘Janmanrega’ – a Citizen-centric Mobile

Application (CCMA). This was launched by Hon’ble Minister of Rural Development on 19th of
June 2017.

Janmanrega has been developed with collaboration between the MoRD, National Informatics
Centre (NIC) and National Remote Sensing Centre (NRSC, Hyderabad). Beta Version of this
Android Application is now available at Ministry’s MGNREGA Website that will allow
locating already geotagged more than 1.78 crore Mahatma Gandhi National Rural Employment
Guarantee Scheme’s (MGNREGS) Assets within Indian Space Research Organisation’s (ISRO)

Bhuvan Map Interface along with their attributes and two photographs using an Android mobile
phone. Citizens will also be able to provide feedback about assets that have been created under
the programme.

Current Features of the App:-

 Background
About MGNREGA
Objectives
Stakeholders
Ten Entitlements
Works
Referring to Friends
Setting of Preference, for switching between English & Hindi versions

3.10 Recent Initiatives to Strengthen MGNREGA

3.10.1 List of permissible works expanded

The list of permissible works under MGNREGA has been expanded:

To strengthen the positive synergy between MGNREGA and agriculture and allied rural
livelihoods,
To respond to the demands of the States for greater location-specific flexibility in permissible
works, and
To help improve the ecological balance in rural India. Some of these works are new but many of
them come within the category of works already permitted under MGNREGA. The list was drawn
up in response to demands from States for a more, specific and unambiguous list of works that
could be taken up under the categories currently permissible. While taking up works under
MGNREGA, the following conditions need to be followed:
Only those works to be taken up that result in creation of durable assets,
The order of priority of works will be determined the Gram Pancahayat (GP),
60:40 ratio for labour: material costs should be maintained at the GP level,
No contractors/labour-displacing machinery to be used.

3.10.2 Ensuring the demand-based character of MGNREGA

A major weakness in the implementation of the Scheme (also discussed in Chapter 6) has been
that States have not set up effective systems of recording demand. The new MGNREGA
Guidelines enlists provisions for States to overcome this weakness. Some of these are:

The GP or Programme Officer (PO), as the case may be, shall be bound to accept valid
applications and to issue a dated receipt to the applicant,

Refusal to accept applications and provide dated receipts will be treated as a contravention
under Section 25 of MGNREGA

The provision for submitting applications for work must be kept available on a continuous basis
through multiple channels so designated by GPs. GPs may empower ward members, anganwadi
workers, school teachers, self-help groups (SHGs), village-level revenue functionaries, common
service centres and MGNREGA Labour Groups to receive applications for work

Provision must also be made (wherever feasible) for workers to register applications for work
through mobile phones in addition to the MGNREGA website and this should feed directly into
the Management Information System (MIS)

The MGNREGA software will automatically generate the pay-order for payment of
unemployment allowance to such wage seekers whose demand for work is not met within 15
days (of demand). Reports prepared on this will have to be part of the essential set of reports to
be tracked at the State level,
State Governments have to ensure that the MGNREGA MIS will record the demand for work,
i.e. the monitoring system has to ensure it captures even households3 that may have been
purposely denied employment,
To estimate demand in advance, the district administration may conduct a door to door survey of
Job Card (JC) holders.

3.10.3 Effective planning

To adequately match the demand of work, prior assessment of the quantum of work likely to be
demanded as well as the timing of this demand, is required. Concomitantly, a shelf of projects of
works to be taken up in the year, should be prepared to meet this demand. This matching of
demand and supply of work is the process of planning under MGNREGA and is summed up as a
Labour Budget for submission to the GoI for fund allocation at the beginning of the Financial
Year (FY).

A Labour Budget must, therefore, reflect:

Anticipated quantum of demand for work,

Precise timing of the demand for work, as also
A plan that outlines the quantum and schedule of work to be provided to those who demand
work. This is the only way work-providers can open work in a manner that is synchronised with
the pattern of migration in that area so as to pre-empt distress migration. It must also be
incumbent upon work providers to pro-actively inform work-demanders well in advance about
the schedule of work to be provided so that they do not need to migrate in distress.

3.10.4 Strict time schedule

Under the current timeline, Annual Plans (outlining works to be undertaken in a GP, as per
demand) are to be presented for approval at the Gram Sabha (GS) around 2 October each year.
However, this may be too late to prevent distress migration. In the absence of a timely work
guarantee, households are likely to migrate after the kharif harvest season. It is, therefore,
important for the GP to inform potential workers of available employment and the timing of this
employment in advance of the kharif harvest. The Guidelines provide a time schedule to ensure
that Labour Budgets are submitted on time by States, approved by the GoI, communicated back
to the States and districts for beginning work in March and April.

3.10.5 Deployment of human resources

Field studies and reports have both indicated the need to deploy additional staff to aid effective
planning at the GP level, supervising (taking measurement, etc.) and monitoring of works.

3.10.6 Strengthening MIS

A major criticism of MIS is that it does not capture transactions on real-time basis and all data
entries are basically post facto. For example, entry of payments into the MIS is done after wages
are disbursed to workers. Another criticism is that there are delays in data reporting through
MIS.
3.10.7 Equal opportunity for vulnerable groups

The Guidelines have provisions to ensure rights of vulnerable groups such as persons with
disabilities, primitive tribal groups, nomadic tribal groups, de-notified tribes, women in special
circumstances, senior citizens above 65 years of age, and internally displaced persons.

3.10.8 Facilitation

For ensuring equal opportunity, POs may procure the services of resource agencies/Civil Society
Organisations (CSOs) working for the disabled/ vulnerable. The resource agencies will be
responsible for assisting the GS in identifying the disabled and vulnerable persons, mobilising
them and ensuring that they get their rights under the Act.

3.10.9 Greater role for civil society organizations

To ensure greater dissemination of information and participation of rural people at every stage,
guidelines emphasize the need for state and district governments to involve CSOs as resource
agencies. CSO involvement will also aid the process of social audits and help with increased
transparency and accountability in implementation of the Act.

3.10.10 Better social audits and vigilance for transparency and accountability

Social Audit
Performance Audit
Vigilance Cell
Strengthening Section 25 of the Act
Limitations on Administrative Expenses
 CHAPTER 4
BUILDING RURAL ASSETS

4.14.1 MGNREGA building rural assets:

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, aims at providing
livelihood security to the rural households of the country by providing 100 days of guaranteed
wage employment through public works programs. Its other objectives include creation of
durable community and individual assets which may work as a catalyst for transforming the
livelihood conditions of the rural households.

4.24.2 Objectives of the Study:

The present study examines the processes of selection of beneficiaries and creation of Category
-B assets on the land or homestead of individual households and impacts of the assets with a
focus on changes in the livelihood conditions and occupational status, if any, of the households.
It examines whether the provision of individual assets has resulted in transformation of the status
of beneficiaries from casual labours to self-employed.
It is argued that the impacts of wage employment and income generation are ephemeral whereas
the impacts of assets may be transformational. The provision of assets on the land or homestead
of individual beneficiaries could change the status of the households forever, including a change
in the status from that of a wage employment seeker to self-employed.

4.34.3 What the Act permits to do:

Rural sanitation related works, such as individual household latrines, school toilet units,
Anganwadi toilets either independently or in convergence with schemes of other Government
departments to achieve ‘open defecation free’ status, and solid and liquid waste management as
per prescribed norms.

Providing All-weather rural roads connectivity to unconnected villages and to connect identified
rural production centres to the existing pucca road network; and construction of pucca internal
roads or streets including side drains and culverts within a village.

Construction of play fields

Works for improving disaster preparedness or restoration of roads or restoration of other

essential public infrastructure including flood control and protection works, providing drainage
in water logged areas, deepening and repairing of flood channels, chaur renovation, construction
of storm water drains for coastal protection

Construction of buildings for Gram Panchayats, women self-help groups’ federations, cyclone
shelters, anganwadi centres, village haats and crematoria at the village or block level.

Construction of food grain storage structures for implementing the provisions of the National
Food Security Act (2013)
Production of building materials required for construction works under the MGNREGA Act as a
part of the estimate of such construction works

Maintenance of rural public assets created under the Act

4.4 The question is — When do ‘works’ become ‘assets’?

Beneficiaries’ perceptions
The transition from the works completed to the creation of ‘assets’ to finally the sustainability
and productivity of assets is a key issue. Even as the technical aspects of works present their
own challenges, it is beneficiaries’ use and perceptions that transform a work to an asset

Works under MGNREGA have several potential outcomes: economic, environmental and
financial. The word technical therefore has different meanings for different disciplines. Further,
it is difficult to do an expert evaluation of all the works as there are several types of works for
which technical evaluation formats that are usable by other non-technical persons need to be
created.

Regardless of these concerns, the subjective perception of end users is the keystone and cannot
be denied, for it is the capability and quality of life of this person/household which the
government programmes seek to address. It is indeed remarkable that most independent research
evaluations on beneficiary perceptions support the view that if planned and executed well,
works do give returns on investments and are perceived as useful by the beneficiaries.

In a beneficiary (n=2,381 households) perception survey done in the six states of Andhra
Pradesh, Chhattisgarh, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh,1 it was
confirmed that MGNREGA works on the lands of individual beneficiaries had a significant
impact on improving the quality of their lands, generating extra incomes, aiding small and
marginal farmers’ move to dual and multi-cropping and in creating alternative sources of
livelihood for these households.

A limited, micro study conducted on wells in one GP in Ranchi, Jharkhand,2 found that the
wells constructed under MGNREGA increased cropping intensity and crop productivity and led
to a decrease in cultivation costs for individual beneficiaries.

4.5 MGNREGA and Asset Creation:

The MGNREGA scheme is not merely about transferring cash to people in rural India rather it is
about creating durable assets that will ultimately lead to a reduced dependence of people on
MGNREGA. The assets created under the MGNREG scheme (see details in Table 1) can be
broadly classified into two categories: one, Assets created in individuals' land and two, assets
created in community land.
 Type of work Nature of Work

Water conservation Digging new tanks/ ponds, small check dams, etc.
and harvesting
Draught proofing Afforestation, tree plantation, etc.
and plantation
Flood control and Drainage in water logged areas, construction and repair of
protection embarkment, etc.

Land development Plantation, land leveling, etc.

Micro irrigation Minor irrigation canals, etc.

Works
Renovation of Desilting tanks/ponds, Desilting of old canals, desilting of
Traditional Water traditional
Bodies open wells, etc.

Provision of Scheduled caste and schedule tribes, beneficiaries of land reform,

irrigation facility etc.
land owned by
Rural connectivity Construction of roads, etc.

Any other activity Other works, etc.

approved by
ministry of rural
development

4.5.1 4.5.1 Assets Created in Individual Land

In order to understand the importance of assets created in individual lands we asked the
workers "Do you think that the assets in individual lands created under the scheme are
required"? About 58 percent of the workers agreed that assets in individual land are
required. To know the possibility of creating/ recreating assets in individual lands without
MGNREGS, we surveyed the villagers. Out of 1414 usable responses, most of the villagers
reported that without MGNREGS it would be difficult to create assets in individual lands.
It indicates that MGNREGS has helped in creating the assets which otherwise would have
been very difficult for individuals to create. Because there is a need to develop assets in
individual land, we found the assets created in the individual land very useful to the rural poor.

4.5.2 4.5.2 Community Assets

Apart from creating assets in individual land there is a merit in creating assets in community
land. There is an apprehension that if work is allowed on poor farmers lands, the provision will
be misused by powerful rich farmers in the villages. Also, there is a need to implement the plans
on a watershed basis. To know the quality of community assets created under the scheme, we
asked the respondents at the worksite to rate the quality of assets created under MGNREGS on
five point scale: excellent, very good, good, poor, and very poor.
4.6 4.6 MGNREGA Works Directly Linked To Agriculture and Allied Activities:
Schedule-I of the Act lists four types of permissible works, viz. Category-A, -B, -C and -D.
Category-B works include six types of community or individual assets for vulnerable sections,

listed in Para-5, which are households belonging to SCs, STs, nomadic tribes, de notified tribes,
BPL, women-headed, physically handicapped headed, land reform beneficiaries, IAY
beneficiaries, scheduled tribes and other Traditional Forest Dwellers (Recognition of Forest
Rights) Act, 2006, and small or marginal farmers.
CATEGORY OF AS PER AS PER SCHEDULE-1, MGNREGA, WORKS
SCHEDULE-1, MGNREGA, PERMITTED UNDER MGNREGA

1 2

I.  Water conservation and water harvesting

structures to augment and improve groundwater
like underground dykes, earthen dams, stop dams,
 Category, A:PUBLIC WORKS check dams with special focus on recharging
RELATING TO NATURAL ground water including drinking water sources
RESOURCES MANAGEMENT
 ON INDIVIDUAL
Watershed management
4.7 CREATION OF ASSETS LAND works such as
contour trenches, terracing, contour bunds,
boulder checks, gabion structures and spring shed
development
Demand for Creation of Assets on Individual Landsresulting
& Typesin aofcomprehensive
Assets
created treatment of a watershed;
It was observed that across the study states 95 per cent of the respondents reportedly
 Since, Micro
demanded asset creation on their land. all the and minor irrigation
respondents sampledworksfor theand
study had
creation, renovation and maintenance
some kind of asset created on their land; the above statistics indicates that around of irrigation
5 percent
canals and drains;
of respondents had assets created on their land without having to place a demand for the
same.
 Renovation of traditional water bodies
Table 4.7.1: Beneficiariesincluding desilting
who demanded for of irrigation
assets tanks on
to be created andtheir
other
land
water bodies; (s) Afforestation, tree plantation and
State horticulture in common andPercentage
District forest lands,ofroad
beneficiaries
margins, canal bunds, tank foreshores
who and coastal
belts duly providing right todemanded
usufruct toforthecreation of
households covered in Paragraph assets5; and
on their land
Rajasthan (N=403) 
Barmer Land development works
95% in common land.
Udaipur 94%
Uttar Pradesh (N=398) Jhasi 95%of lands of
II.Category,  Improving productivity
B:COMMUNITY ASSETS OR Sitapur
households specified in Paragraph 95% 5 through land
Madhya Pradesh
INDIVIDUAL ASSETS (N=400) Betul 91%suitable
development and by providing
Domah 94%
infrastructure for irrigation including dug wells,
Chattisgarh (N=399) Sarguja 95%
farm ponds and other water harvesting structures;
Korba 94%
Odisha (N=390) Sundargarh
 Improving livelihoods 97% through
Mayurbhanj 97%
horticulture, sericulture, plantation, and farm
Andhra Pradesh (N=391) Chitoor
forestry, 94%
Adilabad 94%

Total (N=2381) Development of fallow
95%or waste lands of
households to bring it under cultivation;
A state-wise report on the type of assets created on individual land was also generated from the
data collected. For the purpose of the study, the Creating infrastructure
structures have beenfor promotionasoffollows:
categorized
livestockwater
Water Conservation and Harvesting includes suchtank,
as, poultry
rechargeshelter, goat shelter,
structures, farm ponds;
Irrigation facilities include Dug-wells piggery
etc; Land shelter, cattle shelter
Development includesand Land
fodder troughsBunding,
leveling,
land reclamation etc. for cattle; and
 Creating infrastructure for promotion of
fisheries such as, fish drying yards, storage
facilities, and promotion of fisheries in seasonal
water bodies on public land;
Table 4.7.2: Assets created till date
III.Category, C: COMMON (I)Works for promoting agricultural productivity
INFRASTRUCTURE INCLUDING
S.No State/UT by creating durable
Assets infrastructure required for bio-
Created
FOR NRLM COMPLIANT
. SELF fertilizers and post-harvest facilities including
HELP GROUPS pucca storage facilities for agricultural produce;
-Construction of Food Grain Storage Structures
 1 ANDAMAN AND 2,850
NICOBAR
2 ANDHRA PRADESH 65,15,632
3 ARUNACHAL 17,695
PRADESH
4 ASSAM 5,02,515
5 BIHAR 18,68,526
6 CHHATTISGARH 22,75,681
7 GOA 2,025
8 GUJARAT 10,90,033
9 HARYANA 1,34,069
10 HIMACHAL PRADESH 6,16,161
11 JAMMU AND 4,82,756
KASHMIR
12 JHARKHAND 18,97,833
13 KARNATAKA 32,76,004
14 KERALA 16,55,922
15 LAKSHADWEEP 19
16 MADHYA PRADESH 48,86,975
17 MAHARASHTRA 17,55,373
18 MANIPUR 62,916
19 MEGHALAYA 1,79,832
20 MIZORAM 1,13,569
21 NAGALAND 78,269
22 ODISHA 23,83,872
23 PUDUCHERRY 5,473
24 PUNJAB 1,69,146
25 RAJASTHAN 21,67,634
26 SIKKIM 42,131
27 TAMIL NADU 28,89,820
28 TELANGANA 13,29,576
29 TRIPURA 9,91,050
30 UTTAR PRADESH 65,89,770
31 UTTARAKHAND 5,30,300
32 WEST BENGAL 56,60,904
  Total 5,01,74,331

4.7.1 MGNREGA intensifies focus on capacity building and assets creation

 Around 57,000 technical personnel at state (521), district (6,669) and block level (48,934) have
been trained for using of remote sensing and GIS tools for project planning and monitoring
 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) aims at
strengthening the rural livelihood resource base through creation of productive and durable assets for
sustainable growth.
 To ensure this, there has been emphasis on timely completion of works and on improving the
quality of works. There has been equal thrust on capacity building of dedicated MGNREGS
functionaries and community resource persons towards upgradation of their skills for improved
quality of implementation of the programme.

4.7.2 Completion of incomplete works under MGNREGS, is a major concern of the

government:
 As such, the Ministry of Rural Development is focusing on completion of all 61.39 lakh works
which have been lying incomplete out of a total of 4.54 crore works that have been taken up since
inception of the scheme.
 Owing to the close monitoring and intense engagement with the states, the Ministry has been
able to ensure completion of over 1.02 crore works during FY 2016-17 and current FY, so far. The
Ministry hopes to improve completion further through effective monitoring.   
 Given the diverse nature and scale of works being executed and the varied capacities of
stakeholders involved, separate training modules to suit the requirements of the target groups have
been developed with support from domain specific apex organisations. These training modules have
formed the basis of imparting training to technical personnel under the banner SAKSHAM scheme.
 The training programme was launched by the Minister for Rural Development, Narendra Singh
Tomar, on June 19, 2017 and is expected to be completed by March 15, 2018 covering more than
65,000 technical persons. Around 57,000 technical personnel at state (521), district (6669) and block
level (48,934) have been capacitated, so far, on the use of remote sensing and GIS tools for project
planning and monitoring along with the thematic components like watershed, groundwater and
geohydrology, plantation and Integrated Natural Resource Management. National Remote Sensing
Centre, Hyderabad and Central Ground Water Board have partnered with the Ministry of Rural
Development in this exercise.
 Imparting skill training to MGNREGA workers is a key focus area. The 6367 barefoot
technicians have been trained, so far, for improving the quality and durability of assets through
appropriate work planning, timely monitoring and supervision of works and also to bridge the gap in
availability of technical resources at gram panchayat level.
 The Ministry has also taken steps to standardise the estimates to bring about uniformity in cost
norms, minimise leakages and to improve quality of works through detailing of technical
specifications, tasks and workflows by adopting a Software for Estimate
 Calculation Using Rural Rates for Employment (SECURE). The Ministry has initiated training
of Resource Persons at state, district and block levels on SECURE. All estimates under MGNREGS
will be generated with the use of SECURE software from the Programme’s Management
Information System with effect from April 1, 2018.
 Further, institutional strengthening for Social Audit in accordance with notified auditing
standards has been ensured through concerted efforts for establishment of administratively and
financially independent Social Audit Units and training of dedicated resource persons.
A total of 3760 resource persons from these independent Social Audit Units, at the state, district and
block level, have been trained, assessed and certified by Tata Institute of Social Sciences (TISS), on
a 30 days Certificate course on conduct of Social Audit.
 Steps have also been taken to ensure engagement of women of self-help-groups as village
resource persons for conducting the Social Audits. As of now, 47,000 women SHG members have
been trained on a 4 days training module, for conducting Social Audits at the gram panchayat level.
 To bring in transparency and to enhance the visibility of the programme, the Ministry is
implementing GeoMGNREGA, a GIS based solution to visualise, analyse and explore MGNREGS
asset related data. As on date more than 2.34 crore assets have been geotagged across the country.
This has been achieved through capacity building of over 2.6 lakh functionaries on a mission mode.
Now, the Ministry has initiated GeoMGNREGA Phase-II in 31 states and UTs from November 1,
2017. Under GeoMGNREGA Phase-II, the geotagging is being carried out in three stages viz.
before start of the work, (ii) during the work and (iii) on completion of work. A National Orientation
Workshop and Training was held on 21-22 August 2017 for State Resource Persons and
subsequently, 2,69,075 officers from states, districts, blocks and gram panchayats have been trained.

 The impact is already discernible as reported in a recent study conducted by Institute of

Economic Growth, New Delhi to assess the impact of Natural Resource Management (NRM) Works
under MGNREGA. Primary and secondary data from 30 districts spread over 21 states reveal that
MGNREGA has helped in crop intensification and diversification leading to increase in rural
household incomes.

 The 76% households have reported that the quality of assets created under MGNREGA are very
good or good. Only 0.5% of the beneficiaries felt that the quality of assets was not satisfactory over
time.

 Further, the creation of these NRM assets has led to an increase in irrigation potential and
ground water table. The availability of water in turn has led to a growth in production

between 11% for rice and 25% in oilseeds and encouraged 28% of the sampled households to adopt
horticulture plantation for higher returns. Overall, the study reported an 11% increase in gross
annual income per household (HH) of all the 30 districts taken together within a span of two
financial years 2015-16 and 2016-17.

CHAPTER 5
IMPACT OF MGNREGA ONINDIVIDUAL AND FAMILY
WELFARE

5.1 Individual and family welfare

 Mahatma Gandhi National 5 Rural Employment Guarantee Act of 2005 (MGNREGA)
demonstrates any impact on the welfare of rural children, which will be analyzed on the basis of
child labor and educational attendance.
 The aim is to verify whether the act has the potential to terminate poverty in the long run and
sustainably. Due to the striking inequalities particularly between the rural and the urban regions in
India, the MGNREGA was implemented in 2006 in order to provide 100 days of unskilled manual
labor to any household willing to work at the minimum wage.
 Through this policy, poor people have the opportunity to receive a minimum salary every year
or, if employment cannot be provided according to the given terms, these people will receive the
unemployment allowance.
 Since its implementation, 125.5 million job cards have been issued and 252.5 million workers
have been registered in all India (Government of India, 2017). It is not these numbers alone which
trigger the interest of the government, researchers and other (developing) countries in the
performance of the act.
 A lot of research has emerged over the past ten years evaluating the effect of the implementation
of the act towards the enhancement of the livelihood security of poor people in rural areas. This
preceding research has mostly focused on primary goals like employment, nutrition security and
women empowerment.
 However, there is still a big lack of research on the secondarily affected people as well as the
sustainable development of the country.
 Apart from building resources in the villages in order to connect them and enhance the
infrastructure, it is not very clear so far if the program is able to not just cure the symptoms of
immense poverty, but also promote long-term development.

5.2 Enhancement of Livelihood Security

 A main objective of MGNREGA is to improve the livelihood security of the poor in rural areas,
however, the literature has been inconclusive in the overall assessment of to what extent the scheme
has really improved the living situation in the villages so far.

 The authors follow four criteria in order to evaluate their results:

1. The average quantity of work provided per household;
2. The percentage of households which worked for the full 100 days under MGNREGA;
3. The percentage of expenditure on the scheme valued against the total available
funds; and
4. The percentage of total work completed under MGNREGA.

 If the act was duly implemented, say the authors, it should assist meeting the basic needs in rural
India. However, after analyzing the data according to the four criteria, they find that only the
percentage of households who completed the 100 days of employment went up.
 All other performances; the average workdays per household, the percentage of money spent by
the government and the percentage of completed resources, deteriorated over the examined time
span.
 The authors conclude that regardless of the economic growth during the past years and the
implementation of the scheme, the problem of high unemployment stays deep-seated in India. 13
Kumar and Joshi (2013) use the 66th round of the National Sample Survey (NSS) from 2009 to
 analyze the alteration in household consumption pattern and nutritional security of poor rural
households.
 To examine the influence of MGNREGA on the dietary structure and nutritional status of these
households, the authors establish the following groups: Non-job card holders, job card holders, job
seekers, non-job seekers, beneficiaries – the households receiving employment under MGNREGA,
and non-beneficiaries – the households not receiving employment under the act.
 They first compare the participation over different regions, income groups, land classes and
household types, where they find among others that 83,4% of the MGNREGA job seekers were
successful in receiving employment for an average of 43,1 workdays in 2009.
 A further comparison the authors make is between the dietary pattern, the share of food
expenditure out of the total expenditure and the nutritional status of MGNREGA job card holders,
which are further divided into non-beneficiaries and beneficiaries and non-job card holders.
 The authors find (amongst other things) that people, who received employment under the act,
had a higher calorie and protein intake compared to households who sought for a job, but did not get
the opportunity to work.
 This finding, according to the authors, reveals that the act is achieving its goal of nutritional
security provision to the poor in rural areas
 . They conclude that the study reveals a direct positive effect on the income of the rural poor
through the implementation of MGNREGA. According to their study, 22.5% of the rural 14
households have benefited through the provision of an average of 43 days and with this, the poverty
level was reduced by 4%.
 Due to the rise in income, the consumption of cereal, non-cereal as well as non-food
expenditure has increased in all categories of the rural households. In their opinion in accordance
with the statistical results, MGNREGA has had a good and effective influence, causing an increase
in household food consumption, a change in the dietary scheme and provision of food security the
poor households in rural India.
 As phase three districts implemented the act as recently as April 2008, they are not covered by
the data of the 64th round and are therefore treated as control districts. The author further uses the
Employment and Unemployment round for the year 1999-00 to control for differential trends, which
had been existent before and are therefore not caused by MGNREGA.

Major findings of this analysis are:

 First, compared to non-MGNREGA districts, districts in which MGNREGA was implemented

show a significant increase of participation in the public work sector. This increase has been 15
particularly high for female workers as well as for Scheduled Caste (SC) and Scheduled Tribe (ST)
3 workers.
 Second, even though there has been a downward trend in labour force participation in rural India
after 2004-05, the positive impact on labour force participation, which is contingent to the
significant positive impact on the female labour force participation, has been able to mitigate this
trend in districts where MGNREGA was implemented.

 Third, the author finds a positive impact of MGNREGA on average wages of casual workers,
which is mainly caused by the wage increase of female workers by 8% compared to non-
MGNREGA districts.

 The wage increase of male casual workers however, was found to be less than 1%, which
implies that the implementation of MGNREGA caused prevailing gender gaps in wages to decrease.
 5.3 Female Empowerment

 In order to find out about important gender-specific vulnerabilities, to see if and in what context
gender issues get discussed and integrated already into social protection policies, to which degree
gender deliberations are integrated into these policies, and to analyze the role MGNREGA plays in
this framework, the authors structure their research around the following fields:
o 1. They try to understand the pluralism of social and gendered economic risk;
o 2. They analyze the design and the social protection policies with regard to gender;
o 3. They evaluate the impact of these social protection 3 Scheduled Castes and Scheduled

 Tribes are official groups which consist of people who have been disadvantaged historically in
India.
o They were known as the Depressed Classes over the era the British ruled over India.
o The Scheduled Castes consist of about 16.6%,
o The Scheduled Tribes about 8.6% of the population.
 These groups form the baser part of the society in India. 16 programs on the gender equality, the
food security and possible reductions of poverty or vulnerability at the household, intra-household
and the community level.
 Lastly they give suggestions for policy and program designs in the future in order to enhance
the social protection effectiveness.
 Focusing on MGNREGA through a gender lens, the authors find an improvement in the policy
design. The one-third quota is an important key to help women in receiving more employment, the
Equal Remuneration Act 1976, achieves equal wage payment of men and women and social forums,
which the authors invoke as an example, promotes the participation of women in the development
and assessment of necessary community assets.
 They also observe a significant increase in earning opportunities and household income
contribution for women. However, a huge gap still persists because women work fewer days under
the act than men, due to reasons like heavy work exclusion where women are not allowed to help.
 Further problems are inflexible working hours, which might conflict with the domestic
responsibilities the women still face (in contrary to men) and the absence of crèche facilities, even
though the policy design asks for their provision.
 Therefore, women might face the problem that nobody is available to care for younger children,
which means that they are unable to attend any job. The authors moreover find that women
participate less in the community meetings where MGNREGA works are planned and discussed.
 This again leads to decisions mainly made by men, which potentially exclude the women’s
needs. For these reasons, they provide an extensive list of recommendations in order to empower
women and decrease the gender gap in the long run.
 The overall tone of the paper is that MGNREGA is a good step into the right direction, but still
a lot needs to be done. Narayanan and Das (2014) evaluate women’s participation and rationing in
MGNREGA compared to men by using the Employment and Unemployment Schedule of the 68th
round (2011-2012) of the National Sample Survey.
 They address the question of whether women receive the same access opportunities to direct
wage employment benefits as men and try to narrow down the design and implementation factors
that stipulate their participation in the program.
 While, according to the authors, the nationally representative data implies that the program has
performed well in being inclusive of women and helping them to take part in the act, they also
ascertain that the findings are mixed across the states and sub-populations, where some report better
participation and rationing as others.
 They conclude that policies may need to be designed with distinct focal points for different
performing states. The literature review above which is focusing on the enhancement of livelihood
security and female empowerment through MGNREGA is inconclusive about the progress the act
has brought into the households of the rural poor.
 Both of the above-discussed topics are important indicators of children’s welfare and have a
particular influence on children’s education and the necessity for them to engage in work.
 The next section shows that research has also been ambiguous about findings on both child
labour and children’s participation in education with regard to MGNREGA. Even though literacy
rates in India have, according to the census data, exclusively 18 increased over the past 20 years at
least, they are still at about 74% on average (Government of India, 2011).
 As education is a very important criterion to generate sustainable growth and decrease the gap
between rich and poor, it is relevant to find out if MGNREGA has been able to have a positive
impact.
 Child labour is indivisibly linked to poverty and illiteracy. To solve this problem, concentrated
efforts of the whole society are needed (Ministry of Labour and Employment, 2015).
 According to the Ministry of Labour and Employment (2015), which refers to data from the
census and the National Sample Survey Organization, the number of children in work has reduced
from 9,075,000 in 2004-05 to 4,353,000 in 2011.

5.4 Children’s Education and Child Labour

 Afridi et al. (2012) find that a higher participation of mothers in the MGNREGA is positively
related to their children’s education outcomes, whereas father’s participation in the program seems
to have a negative impact on their children’s education.
 The authors first argue that there are two possible outcomes of an increase in employment for
mothers: It could either lead to a decrease in children’s education due to a substitution effect, that
somebody, normally the older children, needs to take over duties in the household when the mother
is at work.
 Or it could lead to an increase in children’s education, because the mother gets into a higher
bargaining position as she contributes to the household’s income. If the mother values education
enough, this will lead to better results of the children at school.
 Afridi et al. (2012) use panel data from the Young Lives Study rounds 2 19 (2007) and 3 (2009-
10), which solely covers the districts of the state Andhra Pradesh, to test their hypothesis. The
authors take into account the stage-wise implementation across the districts and compare the
participation rates of the household members over the given time span, using the age group of 16 to
60 years old women.
 The results indicate that, ceteris paribus, a gain in employment for mothers through MGNREGA
can possibly influence the decisions of the household in such a way that her preferences are better
incorporated in the outcomes.
 They further show that the participation of mothers in the program has a positive influence on
children’s time spent in school. These effects are particularly large on children from the poorest
wealth group, girls and younger children in the household.
 According to the authors, their findings also implicate that the grades of both the younger
children of the household as well as children of less landed households get better as the mothers
participation in MGNREGA increases.

 They conclude that the evidence implies that the positive effect of the mother’s participation in
MGNREGA would be due to her better standing in the household’s decision making, which implies
that the influence of the act is over and above the pure income effect.
 Das and Singh (2014) examine whether MGNREGA has an influence on children’s education
by employing a Difference-in-Difference test using cross-sectional datasets from 2002 to 2004 and
2007 to 2008 of the District Level and Household Survey (DLHS).
 Their sample contains around 890,000 children who are aged between seven and 15 years. Apart
from the reasons that can influence children’s education either way mentioned by Afridi et al.
(2012), Das and Singh (2014) add one more possibility, which is solely 20 income related:
 They suspect, apart from the already named possibilities, that due to a mother’s greater
participation in the workforce, which leads to a higher income, households get the opportunity to
make bigger investments towards their children’s education. Their results however, do not confirm
the hypothesis.
 There is no evidence that MGNREGA influences children’s education through any of the
mentioned channels. The results depict large standard errors and no significant coefficients, which
would have indicated a positive influence.
 The only indication for any effects on children’s education are negative coefficients between
the Employment Guarantee Scheme and girls’ educational attainment especially in a femaleheaded
household.
 These results improve, the older the girls are. The authors theories that the income effect seems
to be weaker than the possibility that the older girls have to substitute the working mother at home to
care for the family and work in the household.
 They further state, like Holmes et al. (2010), that there are not enough day-care facilities for
small children provided close to the work sites. This forces the older girls to look after their younger
siblings while the mother is at work.
 A last possibility for the statistical results is, according to the authors, that schools are too far
away for the children to walk alone. If the mother participates in MGNREGA, she no longer has the
time anymore to walk with them, which means that the children have to stay at home.
 These pathways are:
1. Indirect effects of the program on both the reduction of risks and vulnerabilities, as well as the
rise of income and livelihood security of the households.
2. Well-being of the females and their decisions within the household
3. Direct effects of crèche facilities and connections with SSA4 and ICDS5.
 He emphasizes, though, that there are significant disparities across the regions and that poverty
cannot be the decisive factor since the poorest states, Bihar, Uttar Pradesh and Orissa have lower
numbers on child labour than comparable richer states like Andhra Pradesh, Karnataka and Tamil
Nadu.
 Before he brings the findings of the papers into context, the author identifies various supply and
demand side factors which affect the occurrence of child labour, which are:
 1. The occurrence of poverty, as poor people are more likely to let their children work.
 2. Economic development, which can influence child labour in both ways: Either it decreases
the likelihood that children are sent to work, as better opportunities for adult employment and
children’s education arise, or it could lead to the opposite just because better labour opportunities
arise.
 3. The wage rate is another important variable influencing the probability of child labour.
Higher wages for adults should have a negative effect on the probability of parents sending their
children to work, as they can effort a better living without monetary help from the children.
Throughout the paper, the author analyses the findings of other authors.

 4 SSA: Sarva Shiksha Abhiyan, a program of the Indian government with the goal of the
universalization of elementary schools’ education. It was established in order to meet the demand for
qualitative primary education across all India.
 5 ICDS: Integrated Child Development Services, a welfare program by the Indian government,
which provides nourishment, preschool education and essential healthcare to children under the age
of 6 and their mothers.
 This concludes that the evidence on the influence of MGNREGA on the well-being of children,
whose parents participate in the program, is mixed. An important finding is that the well-being of
women, as well as an increase in income and the empowerment of women, is a crucial factor which
determines the improvement of children’s health, nutrition and education as well as a reduction in
child labour – especially in the agricultural sector.
 The collection was limited to six districts of Andhra Pradesh, representing the diversity of the
different areas and income levels within the state. In order to approach the question of whether
MGNREGA is a safety net for children, Uppal (2009) focuses first on the characteristics the
programme aims at and the typical features people exhibit who self select into it.
 He then tries to assess the impact programme participation has on children in households that
take part in MGNREGA. He finds that households from lower castes as well as poorer households
and ones that had been affected by drought are more likely to enroll into the programme.
 He further discovers that household registration in the programme decreases the likelihood of
boys entering child labour by 13.4% and of girls by 8.19%. Important to note is that boys are
considerably more likely to engage into child labour if a drought affects the region, whereas girls
who live in rural areas are more prone to work, compared to girls living in urban areas.
 Both effects are almost entirely cured by the MGNREGA. Also, as 23 stated above, households
plagued by a drought are more likely to take part in the act. The author’s conclusion is positive as he
summarises that the MGNREGA seems not only to build a safety net for many rural families per se,
but also it seems to have a valuable impact on the well-being of the household’s children in
particular
 They use cross-sectional data from the National Sample Survey (NSS) rounds 60 (2004) and 64
(2007-08) to detect and compare the effects of parents who work under MGNREGA on children’s
education and child labour.
 This data has the limit that it is impossible to see whether the adults and children captured in the
data belong to the same family.
 To verify the robustness of the statistical results, the authors use NSS panel data, which was
collected over a time span from 2009 to 2011 in the three states Andhra Pradesh, Madhya Pradesh
and Rajasthan.
 This data was used to find out how children in a specific household allocated their time in
response to adults taking on employment under MGNREGA.
 This allows the verification whether the response of children in the cross-sectional data is
similar to the response of children in the panel data. Their findings suggest that one additional day of
an adult doing casual public work results in an increase of 0.038 days of labour outside the
household for children aged between 15 and 17 years.
 This finding is significant at the five per cent level and translates to an increase of 18% in labour
for children under 18 years

5.5 Effects of MGNERGA on malnutrition of infants

 In 2005–06, more than 40% of children in India were malnourished. Malnutrition increases the
risk of morbidity and mortality among infant. Macroeconomic and social policies can influence
 household income and poverty status which in turn function as social determinants of infant
malnutrition.
 The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of Government
of India targets deprivation and food insecurity in rural households. It is suggested that MGNREGA
may have a general positive effect on the nutrition and well-being of children.
 A recent study demonstrated that MGNREGA was associated with improved height-for-age
among children 5–6 years of age. However, the particular effect of MGNREGA on infant
malnutrition is not known. We hypothesised that MGNREGA could reduce infant malnutrition
through its positive effects on household food security and infant feeding.
 The aim of this study was to analyse the effect of MGNREGA on infant malnutrition and to
delineate the pathways through which MGNREGA affects infant malnutrition. We found a positive
effect of MGNREGA on infant nutrition mainly mediated through birth-weight.

5.5.1 Study Design

 MGNREGA is a wage-for-employment policy that “provides 100 days of guaranteed wage-
employment to rural households whose adult members volunteer to do unskilled manual work”.
 They conducted a literature review which suggested that MGNREGA as a source of income in
the participating households could lead to food security, which would have a positive effect on
infant feeding and thus, reduce their risk of malnutrition.
 However, factors such as infant feeding practices and mothers’ knowledge about infant care and
feeding could influence this pathway of effect.
 Based on existing literature, a conceptual framework was developed to link MGNREGA and
infant malnutrition (fig. 5.5.1), which guided the study design, data collection and analyses.
 They employed a mixed design i.e. a quantitative cross-sectional study and qualitative focus
group discussions to analyse the effect and the mechanisms of effect of MGNREGA on infant
malnutrition.

Figure 5.5.1: Hypothesized pathway of effect of MGNREGA on infant malnutrition

5.5.2 Cross sectional study

 MGNREGA is currently implemented in all districts in India, thus using an intervention trial to
analyse its effect on infant malnutrition was not possible. The study was conducted in the Dungarpur
 district in the Indian state of Rajasthan where MGNREGA has been implemented since September,
2006.
 The degree of poverty and unemployment in the district alongside a high prevalence of
malnutrition among children makes it an appropriate setting for examining the potential benefits of
MGNREGA.
 The target sample size of 540 households for the cross-sectional study was calculated assuming
a two-sided, two-sample comparison of proportions.
 The assumed baseline prevalence of being malnourished was based on the reported prevalence
of the anthropometric indicators - underweight 41.7%, wasting 19.2% and stunting 53.4% in
children under 5 years of age in Dungarpur district. The minimum expected effect size was 13%, an
effect demonstrated in the study by Uppal in Andhra Pradesh, India that measured the increase in the
height-for-age of children (5–6 years) whose parents were employed through MGNREGA compared
with their baseline (measurement before the implementation of MGNREGA). Equal sample size in
each group (employed through MGNREGA or not) was assumed for the three anthropometric
indicators at 5% significance level and 80% power.
 The sample size was adjusted by a variance inflation factor to account for the cluster sampling
design and further inflated by 5% to account for missing data.
 A total of 551 households were surveyed with data collected on 1102 participants (551 pairs of
mother and infant in each household). The survey questionnaire was administered face-to-face by
MN and trained nurses to 551 mothers, and weight and recumbent length of 551 infants were
measured. After excluding households with missing anthropometric data, 528 households with 1056
participants were included in the final analysis.
 CHAPTER 6
LIVELIHOOD AND SOCIAL SECURITY

6.1 Rural Livelihoods and Wage Employment:

 The concept of livelihoods has become increasingly important and central to the issues of
poverty reduction, environmental management and human development. Livelihoods may be
defined as means by which households obtain and maintain access to the resources necessary to
ensure their immediate and long term survival

 Rural livelihoods constitute the economic, social and cultural universe wherein rural families are
bound to make their living. Although farming is still an important activity in rural areas, it is
increasingly unable to provide sufficient means of survival. Employment growth in the farm sector
being stagnant, there is an increasing trend towards casualization of labour. Wage employment, both
as agriculture labour and labour in allied services, constitutes a significant means of livelihood in
rural India. Rural labour, which constitutes a large section of unorganized workforce in India,
includes landless and poor households which typically rely on the sale of their labour in farm and
non-farm activities. The rural workforce suffers due to excessive seasonality of employment, lack of
wage employment opportunities and low wage rates. These poor rural households practice multiple
livelihoods and even resort to temporary or permanent migration to increase their employment days
and cope with the risks.

 Having been designed as a novel and radical response to the challenge of combating rural
poverty, MGNREGA is probably the largest rights-based social protection initiative in the world. It
aims to provide a steady source of income and livelihood security for the poor, vulnerable and
marginalized. The main objective of the Act is: “To provide for the enhancement of livelihood
security of the households in rural areas by providing at least 100 days of guaranteed wage
employment in every financial year to every household whose adult members volunteer to do
unskilled manual work”. Its other objectives are reduction in distressed migration, creation of
durable assets in villages, enlivening of Panchayati Raj Institutions (PRIs), empowerment of rural
women, promotion of inclusive growth and facilitation of multiplier effects on the rural economy.
The Act provides an opportunity to build rural infrastructure through watershed development,
restoration of water bodies such as tanks and canals, activities aimed at forestry, land development,
soil erosion and flood control, and construction of roads and institutional facilities. MGNREGA is
different from erstwhile employment generation programmes not only in terms of its origin and
objectives, but also in its design. It combines various objectives of rural development, which imparts
a unique distinction to it.

 MGNREGA has provided around Rs 1,10,700 crore (66 per cent of the total expenditure of
around Rs 1,66,000 crore) as worker wages from FY 2006 up to FY 2011–12*. Studies note a
positive impact of this transfer on household income, monthly per capita expenditure, food security
and health of the beneficiaries. Overall, while there are several indications of the significant impact
of the Scheme, it has even greater potential in terms of poverty alleviation at scale, that can be
realised.

6.2 Household Income

 There are a number of distinct ways in which MGNREGA is likely to impact poverty, the most
direct and obvious way being by providing extra work opportunities and income to the poorest in the
rural areas.

 Net household income or income as a fraction of household income, is considered as an

indicator of the relevance of the Scheme for the poor. Surveying 1,500 households in three states, a
study observed that the share of MGNREGA in the income of the poor was the highest in Andhra
Pradesh (about 17 per cent). In Rajasthan this share was 10 per cent and in Maharashtra it was 7 per
cent. The importance of MGNREGA as a supplementary source of income is also noted by some
studies.
 In a longitudinal survey of 1,064 rural households across Medak district of Andhra Pradesh,
around 12 per cent of the households indicated that their household income had increased as more
members of the same household were being able to work.
 There is also preliminary evidence from the field that MGNREGA income is being used by rural
households for starting their own ventures. An interesting research analysing the impact of
MGNREGA income on rural entrepreneurship in Birbhum district of West Bengal concluded that
around 17 per cent (out of 96 Job Card holders surveyed) of the rural households used MGNREGA
income to run, expand or start a rural business.

6.3 Alternate Employment Options and Opportunity Cost of Time

 In order to estimate MGNREGA’s impact on income more accurately, research studies suggest
that it is necessary to deduct the opportunity cost of time (cost of the next best alternative foregone)
from MGNREGA earnings. In Rajasthan, among female headed households, the share of
MGNREGA earnings was found to be nearly 15 per cent of household income; this is slightly higher
than twice that in male headed households, implying substantially greater importance of this source
of income to female-headed households.
 In contrast, the shares are high for both male- and female-headed households in Andhra Pradesh
(19 per cent and 16 per cent, respectively). Using the same measure, among landless households, the
share is 20 per cent in Andhra Pradesh, followed by Maharashtra and Rajasthan with nearly equal
shares (about 7 per cent). Another measure to estimate the viability of MGNREGA for rural
population is to assess AEOs. If there are lucrative AEOs apart from MGNREGA, then relevance of
MGNREGA will be less.
 The National Sample Survey Organisation (NSSO) in one of its rounds of MGNREGA panel
survey in three States found that only around 6 per cent of the MGNREGA workers in Andhra
Pradesh reported availability of other work during the time MGNREGA work was performed. The
figure was 14 per cent for Rajasthan and 2 per cent for Madhya Pradesh. It is also important to
observe the average number of days when work other than MGNREGA was available.
 In the case of Andhra Pradesh other work was available on an average for 16 days (at a wage
rate of Rs 74/day), whereas MGNREGA work was available for 20 days (at a wage rate of Rs 89/
day). Madhya Pradesh and Rajasthan demonstrated similar trends with MGNREGA providing more
number of days of work at a higher average per day wage rate.
 The findings for Andhra Pradesh were confirmed by the longitudinal study in Medak district
(mentioned above). It was found that around 67 per cent of the households said they use
MGNREGA as a source of income when no other work was available.

6.4 Monthly Per Capita Expenditure

 Monthly per capita expenditure has been used as a proxy indicator to measure the impact of
MGNREGA on poverty levels of a household. The impact is likely to be positive if the increase in
income has translated into an increase in expenditure, particularly on food and essential items, of the
household. It follows from a study conducted in Andhra Pradesh that the MGNREGA has caused a
 significant increase in monthly per capita consumption expenditure of around 10 per cent for
households.

 Expenditure on non-food consumables increased significantly by around 23 per cent.

Expenditure on transportation decreased significantly due to the MGNREGA by around 65 per cent.
This was most likely because the MGNREGA stipulates that employment be provided within 5
kilometres (kms) of the residence of participants. Similar expenditure patterns were apparent in
Rajasthan, as per another study.
 The wage-seekers were spending their additional wages from MGNREGA mainly on food (50
per cent), clothing (20 per cent), education (10–15 per cent) and health care (10 per cent). Another
longitudinal study surveyed the same 2,500 households in Andhra Pradesh in 2004, before
MGNREGA, and in 2006 and 2008, after the implementation of MGNREGA.
 It found that participation in MGNREGA had a significant and positive impact on consumption
expenditure, intake of energy and protein and asset accumulation.
 MGNREGA seems to provide poor households the ability to withstand economic shocks and
deal with inflation. In a study conducted in Chhattisgarh, Jharkhand and Odisha, most sample
households reported that had MGNREGA not been implemented in the study areas, most of the
households would not have had the capacity to purchase enough food grains.

6.5 Impact on Food Security, Savings and Health Outcomes

 Studies on poverty suggest that deprivation across a wide range of nutrients (calories, micro-
nutrients, etc.), can lead to a poverty trap where low nutrition leads to low productivity which in turn
leads to low wages and then to low nutrition, thus completing a vicious cycle.
 Depending on how net transfers from MGNREGA are spent, their nutritional implications may
be significant. MGNREGA has contributed to ensuring a higher intake of food and food availability.
In Andhra Pradesh, a study compared the number of meals foregone by households and found that
this number had reduced significantly as a result of MGNREGA.
 Those who worked in the programme gave up 1.6 fewer meals per week. A few research studies
also observe that MGNREGA has had an impact on the health of the beneficiaries. As per the
longitudinal study in Medak in Andhra Pradesh (mentioned earlier), the health outcomes impacted
by the programme include a significant reduction of 12 per cent in the incidence of reported
depression and improvements in mental health indicators. Consequently, post MGNREGA, health
expenditure has decreased by Rs 8 per capita.

The programme also raised the probability of holding savings for a rural household by 21 per cent
and the per capita amount saved increased by around Rs 19.24

6.6 Participation of Marginalized Communities

 Evidence suggests that MGNREGA is succeeding as a self-targeting programme, with high

participation from marginalized groups including the SCs and STs. At the national level, the share of
SCs and STs in the work provided under MGNREGA has been high at 40–50 per cent across each of
the years of the Scheme’s implementation. In FY 2011–12* alone, 40 per cent of the total person-
days of employment (84 crore out of 209 crore) were provided to SCs and STs as according. In the
case of both SCs and STs, the participation rate exceeds their share in the total population.

 The Act allows works such as irrigation, horticulture, land development, on private land
belonging to the SCs and the STs or below poverty line families or to the beneficiaries of land
reforms or to the beneficiaries under the Indira Awas Yojana (IAY) of the GoI or that of the Small
or Marginal Farmers (SMF) as defined in the Agriculture Debt Waiver and Debt Relief Scheme,
 2008 of the GoI, or to the beneficiaries under the Scheduled Tribes and Other Traditional Forest
Dwellers (Recognition of Forest Rights) Act, 2006.

 In FY 2011–12*, around 12 per cent of the total MGNREGA works taken up have been on
private lands. Since 2006–07, around 20 lakh individuals have benefited under this category of
works. Micro-level case studies indicate the positive impact of the Scheme in creating sustainable
livelihoods for these individual beneficiary households. However, more rigorous research studies are
required to understand the impact on income of Small and Marginal Farmers as well as the
productive potential of these works.

 MGNREGA employment trends validate the hypothesis that it is the most needy who seek
employment under the Scheme. In a survey conducted in 2008 in six states—Bihar, Chhattisgarh,
Jharkhand,Madhya Pradesh, Rajasthan and Uttar Pradesh—it was found that a majority of the
MGNREGA workers belong to the most disadvantaged sections of society; 81 per cent of the
sample workers lived in kachcha (non-permanent) houses, 61 per cent were illiterate, and 72 per cent
have had no electricity at home. SC and ST families accounted for 73 per cent of the workers in the
randomly selected sample.

 At the national level, the share of SCs and STs in the work provided under MGNREGA has
been high at 40–50 per cent across each of the years of the Scheme’s implementation. In the case of
both SCs and STs, the participation rate exceeds their total share in the total population (except in
Maharashtra where it is only marginally less) as shown in Table 1.2. This trend is definitely a
positive indication.

 Other field studies corroborate the high workforce participation by the marginalised. A study
conducted in five districts of Uttar Pradesh noted that in its sample, around 85 per cent of the
beneficiaries belong to Below Poverty Line (BPL), 50 per cent belong to SCs, 45 per cent belong t0
the Other Backward Classes (OBCs).42 An NSSO survey on MGNREGA observed that in Andhra
Pradesh 42 per cent of the beneficiaries were SCs/STs and 50 per cent were OBCs, these proportions
in Madhya Pradesh were 67 per cent and 29 per cent, and in Rajasthan 50 per cent and 42 per cent,
respectively.
 6.7 Women Participation in MGNREGA

 From FY 2006–07 up to FY 2011–121, around Rs 53,000 crore have been spent on wages for
women and around 47 per cent of the total person-days2 generated have been by women

 With a national participation rate of 47 per cent, evidence suggests that women are participating
in the Scheme more actively than in other works. Research also indicates that MGNREGA is an
important work opportunity for women who would have otherwise remained unemployed or
underemployed. However, the significant inter-state variation in participation of women requires
further research and analysis. In FY 2011–12,* Kerala had the highest women participation at 93 per
cent, while Uttar Pradesh and Jammu and Kashmir showed low levels of women participation at 18
per cent and 17 per cent respectively.

 MGNREGA has reduced traditional gender wage discrimination, particularly in the public
works sector. As per NSSO 66th round, the average wage for labour in MGNREGA was Rs 90.9 per
day for men, and for women it was Rs 87 per day. The wage difference was larger for labour in
other public works; Rs 98.3 per day for men and Rs 86.1 per day for women.
 Other studies also suggest an upward movement of unskilled wages for women post-
MGNREGA. For instance, in Kerala, the wages for women in agriculture and forest work rose from
Rs 70–80 in 2007 to Rs 110–25 in 2009.21 In fact, real wages increased more rapidly for female
workers than for male workers.22 In a survey of 75 villages across four states—Bihar, Gujarat,
 Kerala and Rajasthan—it was found that the ratio of male-female wage rates, on an average,
declined from 1.40 in 2007–08 to 1.30 in 2009–10

 The increased access to paid work due to MGNREGA has had a positive impact on women’s
socio-economic status and general well-being. For instance, in a survey conducted across six states,
82 per cent of the widows in the sample regarded MGNREGA as a very important source of income,
and of the total sample, 69 per cent of the women stated that MGNREGA had helped them avoid
hunger. Findings from different studies also observe that post MGNREGA, women have greater
control over their wages and have been spending them on repaying small debts, paying for their
children’s schooling and bearing medical expenses, etc.

 Aggregate Participation: At the national level, the participation of women in the Scheme has
surpassed the statutory minimum requirement of 33 per cent; in
FY 2011–12* alone, women person-days of employment was close to 50 per cent.The
percentage of women participation from FY 2006–07 up to FY 2011–12* is provided in Table 2.1
 CHAPTER 7
LABOUR MARKETS, MIGRATION AND WAGES
7.1 Introduction

Rural labour markets are constrained by several mechanisms that are skewed in favour of the
socially and economically powerful and so the poor and landless labour is unable to negotiate in an
equitable manner. Migration, especially of vulnerable groups such as landless and small farmers, is
necessarily seen as a coping mechanism of individuals and households largely as a response to the
crisis in rural labour markets. In this manner, wages, rural labour markets and migration are
intrinsically linked to MGNREGA interventions.

Popular perceptions and discourse around these themes articulate several doubts:

Q1. Has MGNREGA adversely affected the agriculture sector by raising agriculturewages and made
the labour unavailable during the agriculture season?

Q2. Does MGNREGA have an impact on risk and distress migration?

7.2 MGNREGA and availability of agricultural labour

Rural labour markets are sensitive to the forces that shape the primary sector as such soil,water and
irrigation, land usage as well as events like droughts, floods etc. Regardless of the crises in
agriculture in the last decades dovetailing on the overall economic growth, agriculture itself has seen
a marginal sectoral growth in the last ten years. Due to the impact of globalization, industrialization
and growth of several sectors proximate to the rural contexts, there is an increasing connect between
rural and urban contexts.

● At the macro level, industrial policies and sector wise growth has meant that agriculture labour
may get ‘pulled’ into other non-farm work.
● Agricultural labour may be pulled into nonagricultural work if employment is available at higher
wages in the surrounding areas. Research shows that increase in non-farm wages causes a diversion
of agricultural labour
into non-farm work. This may be especially true of fast urbanization or industrialization blocks
which are proximate to developing towns and cities where industrial units have been set up or are
proposed to be set up. The conversion of agricultural land for non-agricultural purposes including
for real estate and tourism creates a class of marginal or casual workers who shift their occupation
structure.
● Data suggests that the MGNREGA has had a positive impact on labour force participation in
public works or that participation in public works has increased following the implementation of
MGNREGA. A study comparing4 the MGNREGA
districts and non-MGNREGA districts, found that the probability of a casual worker being engaged
in public works increased by 2.5 percentage points more in MGNREGA districts compared to non-
MGNREGA districts occupational structure.
● A study found that high non-farm wages have had a more significant role in the diversion of
labour from agriculture than MGNREGA.9 Using macro level data in the drought-prone states of
Karnataka and Rajasthan as well as in an irrigation-dominated state like Andhra Pradesh, it observed
that the impact of MGNREGA wages on the economic scarcity10 of labour is more prevalent in
 Karnataka and Rajasthan; however this impact is relatively modest when compared with the impact
of hike in nonfarm wages.
● An analysis of the quantum of MGNREGA works provided across the year also indicates a
powerful seasonal fluctuation, with a disproportionately higher share of works being done during the
agricultural off-season. The month-wise employment data under MGNREGA during FY 2010–11
indicates that it is in the lean agricultural season (April–June and January–March), that around 70
per cent of persondays of work were generated.14 While this does not factor in migration of labour
during an agricultural lean season to other places, it does suggest that the impact of MGNREGA on
labour markets may be limited at best.

Four distinct situations of MGNREGA’s (demand, supply and market wages) interaction with the
labour market-

● Insignificant Impact: In places where the volume of MGNREGA work is small compared to
the demand and compared to the total size of the labour market (due to limited institutional capacity,
Panchayati Raj Institutions (PRIs)20 not
fully functioning and other factors), the Scheme has no perceptible impact on local labour markets.

● Misfit: A competitive local labour market, with several employment opportunities outside
MGNREGA also offers limited scope for MGNREGA to influence the labour market. In such cases,
there was neither interest in the Scheme’s wage benefit nor in its non-wage benefit. For instance, the
studies found that in Kutch, Gujarat, people had limitless work opportunities at twice
the MGNREGA wage rates and therefore did not demand MGNREGA work.

● Significant Impact: This represents places where the MGNREGA wage is higher than the local
wage and, MGNREGA presence is large enough to catalyse widespread interest in the community
and also to significantly change the structure, conduct and performance of agricultural labour
Markets.

● Potentially Significant Impact: This represents cases where despite MGNREGA wages being
significantly higher than local wages and the volume of potential MGNREGA work also significant,
the MGNREGA invokes a lukewarm response owing to administrative constraints or lack of
awareness, or both.

7.3 Does demand for work under MGNREGA affect agriculture work during the
agriculture peak season?

 The first perception briefly reviewed and analysed in the light of available evidence is whether
the agricultural labour market is adversely affected due to MGNREGA. The
 Second perception is that agriculture labour is unavailable during the agricultural season.
However, contrary to this perception, it is seen that MGNREGS is optimally utilized by households
during the agriculture lean season. Data show that demand increases substantially during the non-
agriculture season across state and year trends. Demand for work in MGNREGA is also intricately
linked with years of rainfall deficit or drought years.
 Further substantiation for this point is provided as evidence by Makwana and Shah
 (2011)13 who report that MNREGA was found to have successfully shortened the period of
migration. The study also re-confirmed that there was a sizeable increase in wage rates for all types
 of labour activities during 2005 (the pre-MGNREGA period) and 2009. Among all activities, increase
in wage rates was the highest (88.05 per cent) for non-agricultural labour by male workers.
 The increase in wage rates was the lowest (24.32 per cent) for labour work in mining by male
workers. Wages for agricultural operations increased by 57.76 percent whereas for construction
work the wages increased by 54.81 per cent. For skilled workers such as electricians, plumbers and
pump-set/ boring operators wage rates increased between 50 and 64per cent.

7.3.1 Month-wise trends for demand from number of households(in crore) FY

2012–13 to FY 2014–2015
Table 7.3.1: Month-wise trends for demand from number of households (in crore) FY 2012–13 to FY
2014–2015

FY AP MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
R

2014 1.53 1.9 2.31 1.64 10.0 0.8 0.7 0.75 0.86 0.93 1.23 1.34
-
2015

2013 1.4 1.78 1.91 1.28 10.4 10.8 1.13 1.22 1.72 2.11 2.11 1.96
-14

2012 1.22 1.6 1.88 1.3 0.9 0.9 .88 0.86 1.01 1.24 1.47 1.56
-13

7.3.2 Month-wise trends for demand for work from persons (in crore) for
FY 2012–13 to FY 2014–15

Table 7.3.2: Month-wise trends for demand for work from persons (in crore) for
FY 2012–13 to FY 2014–15

Year(Month) Apr May June July Aug Sep

2014-2015 2.3592440 3.0083771 3.4299836 2.2676672 1.3153818 1.1726248

2013-14 2.1231838 2.6195548 2.7083067 1.6874613 1.3152553 1.3654128

2012-13 1.6939393 2.3955000 2.6048108 1.6801464 1.2721496 1.2388724

Year(Month) Oct Nov Dec Jan Feb Mar

2019-20 .9506968 .9742808 1.1070897 1.2246341 1.6606424 1.8529647

2018-19 1.4333125 1.5607499 2.3340476 3.0157686 3.0677847 2.8515094

2017-18 1.0971779 1.0793949 1.3294059 1.6338009 2.0169176 2.2079101

7.3.3 Spike in Demand for work from Households over the years(in cr.)

Figure 7.3.3.1: Spike in Demand for work from Households over the years(in cr.)

7.4 Increase in Bargaining Power, Choice of Work and Wages

MGNREGA wages provide an alternative source of income for rural labourers, raising
the reservation wage (the fall-back position if a bargain is not struck) and implicitly offering
labourers bargaining powers in an otherwise inequitable rural labour market. The Scheme has also
provided labourers (particularly those who are in debt bondage or contract labour) with a dignified
choice of work. Thus the diversion of labour in places may reflect an active choice made by the
workers. Given this, the practice of seasonal scheduling of works may not be an optimal solution.

● Providing Reservation Wage for Labourers- Proponents of the Scheme believe that the
MGNREGA wages ensure an alternative source of income raising the reservation wage (the fall-
back position if a bargain is not struck) of all workers and implicitly offering them some bargaining
powers. This must be seen as a positive development, since the Indian labour market, due to
inequitable social
and power dynamics, has suppressed wages far below the competitive wages for the rural labour
force.

● Seasonal Scheduling of MGNREGA Activities- Research claims that the positive effect of the
Scheme on agricultural productivity may be offset by a
diversion of labour away from the agricultural sector into the Scheme.32 As pointed out by a study
in Kerala, the diversion of labour from rice fields may actually result in a decline in agricultural
productivity. To limit distortion of the labour market during agricultural season, and ensure that
employment opportunities are additive instead of substitutive, some districts schedule MGNREGA
activities during the non-agricultural peak season.
 Table 7.4.1: State wise wage rate (Rupees/day)

State Current
Agricultural
Wage rate in minimum wage
rupees per day rate

Andaman Nicobar 267 451

Andhra Pradesh 237 312

Arunachal
Pradesh 205 220

Assam 213 255

Bihar 194 246

Chhattisgarh 190 237

Goa 280 409

Gujarat 224 312

Haryana 309 339

Jammu &
Kashmir 204 225

Jharkhand 194 239

Karnataka 275 269

Kerala 291 287

Madhya Pradesh 190 231

Maharashtra 238 247

Manipur 238 225

Meghalaya 203 196

Mizoram 225 250

Nagaland 205 115

Odisha 207 280

Puducherry 256 368

Punjab 263 315

Rajasthan 220 213

 Sikkim 205 300

Tamil Nadu 256 243

Telangana 237 312

Tripura 205 302

Uttar Pradesh 201 192

Uttarakhand 201 260.5

West Bengal 204 245

Non-scheduled
Areas-Rs. 198.00
Scheduled Tribes
Himachal Pradesh Areas-Rs.248.00 225

7.5 Migration and Mgnrega

MGNREGA has had a more direct and positive impact on reducing distress migration as compared
to migration taken up for economic growth and other reasons.

1. Studies indicate that MGNREGA has reduced migration by providing work closer to home and
decent working conditions. A study conducted in Anantapur, Andhra Pradesh observed that the
scheme brought down the migration levels from about 27
per cent to 7 per cent in the sample villages due to availability of work.
2. Another case study from Bastar notes that in one block the number of people migrating declined
from 4500 to 500 as a result of employment being provided close to home by MGNREGA.

3. A survey of 240 households in the district of Sidhi in Madhya Pradesh also confirmed these
findings; migration had reduced in sample areas by 60 per cent due to the availability of work.

4. The impact of MGNREGA may be more on the population that migrates for employment; as per
the National Census data 2001 around 15 percent of the
households migrate for employment.

5. In a study to assess the impact of MGNREGA on migration in Punjab, it was found that only
around 5 percent of the 300 households in five districts reported migration from
the village due to employment opportunities.

6. A study across 12 districts of Gujarat, Madhya Pradesh, Maharashtra and Rajasthan, found that
out of 938 beneficiaries, 55 per cent of the respondents felt that migration had been reduced in their
families as a result of MGNREGA.

7. Thirty-five per cent of the respondents (out of 938 respondents) felt that their
children’s education had been positively benefited by MGNREGA, while 30 per cent felt that their
clothing had improved.
 7.6 Summary and Conclusions

Several conclusions emerge from this analysis. Some points are clear directions, while some need
further research:

● The impact of MGNREGA on rural labour markets is complex and more research is needed to
understand rural contexts. Rural markets are transitioning due to inter-linkages between the sectoral
growth of agriculture, industries and urbanization in different states. There is an increasing rural-
urban connect and several factors pull agricultural labour in state-specific contexts. Research is not
conclusive on this aspect.
● Related to transitioning rural markets is the issue of distress migration. Research shows that
MGNREGA has a clear impact on distress migration, especially for women. Research also shows an
initial inter-linkage between women’s migration and its impact on their children’s education
parameters.

CHAPTER 8
DIFFERENT STATES AND ITS SCHEME UNDERTAKING

8.1 Different States and Its Scheme Undertaking

MGNREGA is a one kind of scheme which can be implemented for multiple purposes. Aimed at
building social security by providing 100 days of JOb for a rural Person. Today MGNREGA has
provided jobs to over 14 crore Job card holders across the nation becoming the largest Social
Security scheme. Every state has also been using the scheme to build assets, Natural Resource
management, Agriculture and Agriculture Allied Works. In this chapter we shall see the progress on
MGNREGA in all the states and look into the financial and the work progress of a couple of states.

Table 8.1.1: State wise Count of Job card holders and the workers.
Progress With Respect to Job Card (As on 3rd November 2020)
State Total No. of Total No. of Total No. of Total No. of SC worker ST worker
Job Cards Workers[In Active Job Active against against
issued[In Lakhs] Cards[In Workers[In active active
Lakhs] Lakhs] Lakhs] workers[%] workers[%]
Telangana 54.2 116.1 34.01 59.08 16.55 13.98
Odisha 74.18 181.35 44.24 75.84 15.73 29.79
Rajasthan 114.38 256.86 81.88 130.06 20.54 22.11
Chhattisgarh 41.87 95.9 34.63 70.98 10.82 32.2
Jharkhand 56.44 95.8 28.04 36.5 10.39 28.45
Madhya Pradesh 75.76 172.46 58.88 111.1 15.06 35.01
Tripura 6.41 11.1 6.17 9.55 13.83 35.95
Maharashtra 95.61 226.92 30.71 58.73 9.94 18.95
Gujarat 41.2 91.41 17.02 28.85 5.61 36.13
West Bengal 136.52 303.72 95.98 160.88 25.63 7.05
Kerala 37.69 58.45 19.71 23.92 14.09 4.88
Karnataka 68.49 160.57 38.4 75.83 17.76 9.76
Bihar 196.76 274.65 67.3 79.04 14.44 1.24
Mizoram 2.03 2.18 2.01 2.01 0.02 97.51
Haryana 10.76 19.25 5.17 7.79 47.2 0.01
Himachal
Pradesh 13.47 25.13 8.19 11.93 26.13 6.99
Uttar Pradesh 211.39 297.48 111.56 141.79 31.05 0.99
Nagaland 4.44 7.37 4.31 5.19 0.83 95.4
Assam 54.33 93.45 31.27 47.21 4.77 16.33
Uttarakhand 12.02 20.23 7.99 11.66 16.83 3.87
Meghalaya 6.14 12.01 5.64 8.55 0.64 90.7
Punjab 19.4 30.06 11.91 15.4 69.37 0.05
Tamil Nadu 88.41 128.49 72.83 89.65 26.81 1.4
Sikkim 0.86 1.39 0.75 0.96 4.39 37.03
Manipur 5.8 10.63 5.68 7.03 2.58 43.33
Jammu &
Kashmir 12.99 22.37 9.48 14.93 5.13 11.36
Goa 0.37 0.48 0.08 0.08 2.93 35.28
Arunachal
Pradesh 2.57 4.72 2.29 2.52 0.09 88.57
Andaman
Nicobar 0.33 0.49 0.12 0.15 0 2.56
Puducherry 0.74 1.53 0.57 0.67 30.96 0.17
Andhra Pradesh 93.61 188.26 54.88 94.8 19.47 7.25

● States like UP bihar, west bengal, Rajasthan Maharashtra, AP, Tamil Nadu, MP, Odisha,
Karnataka are top 10 states having highest number of Job card holders.
 ● Northeastern states Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,
Sikkim and Tripura comparatively have the least population and less job card holders but the
percentage of Active job card holders to the issued Job cards is more than 90%.
Figure 8.1.1: Total number of Job Cards issued

Uttar Pradesh
● Uttar pradesh is one the top states in the country to give employment under the rural
employment guarantee scheme. According to the statistics the state has around 211.39 lakh job cards
out of which 11.56 are active. With the Coronavirus pandemic in place the 2020 progress has seen a
spike. Still with 5 months in the Financial Year the state has surpassed the Previous years mandays
of work
● Currently there are around 2,37,600 Works completed in the state with still 5 months to go.
Which stood at 6,25,094 last financial year. Ongoing works are more than 13 lakhs.
● More than 70% of the Expenditure is on Natural Resource Management in Public and Individual
Land. This percentage has increased over the years which was 45% in 2017-2018.

Figure 8.1.2: Person Days of work generated for last 5 years in UP

 ● Even with the percentage of Utilization of Fund State has seen a huge increase in the FY 2020-
2021. Last year's total % of utilization was 99.93%. This year with still 5 months left the %
Utilization is already 94%
Maharashtra
● NREGA has been effective in all the districts of Maharashtra except some situations during
extreme drought. There are around 95 lakh job cards issued in Maharashtra in the last 14 years of the
project out of which 30.72 Lakh are active job card holders.

Figure 8.1.3: Person Days of work generated for last 5 years in Maharashtra
 Karnataka
● The MGNREGA scheme was introduced in the state during the year 2006 and has been
implemented across the districts in three phases. From the table 12.1 it is evident that 68.49 lakh Job
cards have been issued since the beginning of the scheme.
Figure 8.1.4: Person Days of work generated for last 5 years in Karnataka

● Year on Year Persondays generated are showing an increasing trend. For the financial year
2020-2021 the person days generated is very high when compared with the timeline with still 5
months to go in the financial Year.
● Out of 10.99 Lakh total number of works 9.06 lakh works are undergoing. These numbers were
different last year. Total Number of Works were 7.63 Lakh whereas the ongoing work was just 4.34
lakh.
● Percentage utilization of the funds were as low as 78.55 % in the Financial year 2019-2020. But
the Utilization in the FY 2020-21 has seen a sharp spike and has reached 95.03 % with still 2
quarters to go in the FY
Kerala
● Kerala is using MGNREGA for the Natural resource management which is highest when
compared to other states 80% of the NREGA Expenditures are on Natural resource management.
● 2020-21 has reported 80% of its fund utilization which was 73% for the whole year in 2019-
2020. But during the Natural Calamities the MGNREGA funds are used for restoration and in that
period the utilization was 120%
● 70%-80% of the funds are Utilized for the Agriculture and Agriculture Allied Activities.
● Wage rates in Kerala stand at 291 Rs from the FY 2020-2021

Figure 8.1.5: Person Days of work generated for last 5 years in Kerala
 Punjab
● Punjab has seen the Increasing tread in the Job creations year to year. In the 2020-21 it has been
211 lakh person days already with 5 months to go.
● 19.4 Lakh job cards have been issued in Punjab since the Beginning of the scheme.
Figure 8.1.6: Person Days of work generated for last 5 years in Punjab

● Total Individuals worked under the scheme are 9.16 lakh in the FY 2020-21 which was 6.51
lakh in the FY 2016-2017
● Percentage of expenditure on the Natural resource management stood at 67.96% which was
46.48% in the FY 2016-2017
● The fund utilization has been decreasing year on year in 2016-17 it was around 103 and for the
2019-2020 it stood at 93.46%
 Assam
● All the northwestern states are performing well in the NREGA implementation. Employment
generation has become a livelihood for many households.
● Assam has seen an increase in the work generated year on year. It has a total job card holders of
54 lakh people across the state out of which 31 lakh are active users.
● The fund utilization for Natural Resource management has increased by 25% from 2016 to 2020
Figure 8.1.7: Person Days of work generated for last 5 years in Assam

West Bengal
● Year on Year the funds utilization was on decreasing trend but the 2020-21 has utilized 80% 0f
the funds with still half way to go in the Financial Year
● A total of 136.55 lakh job cards have been issued in West bengal since the begining of the
scheme out of which 96.09 lakh are the active users
● For the financial year 2020-21 97 lakh individuals have worked
● Year on year the utilization of funds on Natural resource management has increased from 58%
to 61%
● Expenditure on Agriculture and allied activities has reduced from 67 to 60 % which was also
75% in the FY 2017-18

Figure 8.1.8: Person Days of work generated for last 5 years in West Bengal
Wage Rates in Different States
The decision of linking the MGNREGA wage rates corresponding to annual increase has given an
upward thrust to Mahatma Gandhi NREGA wage rates for all the states.
But still the NREGA wage rates are less than that of the minimum wage rates in many states. Only 8
states are receiving the wage rates slightly higher than that of the minimum agriculture wage rates.
(It is demonstrated through the Graph Below)

Figure 8.1.9: NREGA rate per day and current agricultural minimum wage rate (in Rs.)
 CHAPTER 9
CONVERGENCE WITH VARIOUS DEPARTMENTS

9.1 Convergence of Mahatma Gandhi NREGA with other Departments & schemes
In order to overcome the constraints as well as to realize better outcomes, the concept of
‘convergence planning’ was introduced in 2009. The Ministry of Rural Development designed the
guidelines for convergence.
Financial year 2014-15 was declared as the year of convergence under Mahatma Gandhi NREGA by
the Ministry of Rural Development, Government of India and requested all the states to develop a
roadmap for convergence. The purpose of this roadmap is to optimize public investments for
creating durable and productive assets and securing livelihood of rural households through
convergence of MGNREGA works with the resources of other programmes/schemes available with
Panchayat and Rural Development Department and other Line departments.
Every year the Ministry of rural Development gets the new convergence plan from every state where
states will plan the budgetary allocations at district level and block level for various schemes
available in the particular state.
Recently the government has shifted its focus more towards natural resource management and every
state has also increased its funds upto 60% towards natural resource management.

9.1.1 Why Convergence?

The MoRD Notification dated 20th December 2013 states that
“The State Government shall take concrete steps to achieve effective interdepartmental convergence
till the last mile implementation level of the works under the Scheme with other Government
Schemes / programmes so as to improve the quality and productivity of assets and bring in synergy
to holistically address the multiple dimensions of poverty in a sustainable manner.”
The objective of MGNREGA namely creation of durable assets and securing livelihood of rural
households can be facilitated through Convergence of MGNREGA works with resources of other
programmes / schemes available with Panchayats and other line departments. These resources are
not restricted to availability of funds but include technical expertise and knowhow that officials of
the line departments may be endowed with.
Substantial public investments are being made for strengthening the rural economy and livelihood
base of the poor, especially the marginalised groups like SC/STs and women. To effectively address
the issue of poverty alleviation, there is a need to optimise efforts through inter-sectoral approaches.
The convergence of different programmes like: Watershed Programmes, National Agriculture
Development Programme (Rashtriya Krishi Vikas Yojana), National Horticulture Mission, Scheme
of Artificial Recharge of Ground Water through Dug well, BRGF, with NREGA will enable better
planning and effective investments in rural areas. This convergence will bring in synergies between
different government programmes/schemes in terms of planning, process and implementation. This
will also facilitate sustainable development.
Convergence of funds from other sources can help in creation of durable assets. For instance, funds
available with PRIs from other sources such as the National Finance Commission, State Finance
Commission, State Departments and other Central or Centrally Sponsored Schemes such as
SGSY(Swarnajayanthi Gram Swarozgar Yojana), DPAP(Drought Prone Area Program),
DDP(Desert Development Program), IWDPIIntegrated watershed development Program),
BRGF(Backward regions grant funds) can be dovetailed with other rural development funds for the
construction of durable community assets under the works permissible. However, core funds of any
scheme should not be used as substitute resources by different departments and agencies for their
own activities.
 The Ministry of Rural Development has developed and disseminated Guidelines for Convergence of
NREGS with different schemes and specific programmes viz. Indian Council of Agricultural
Research, National Afforestation Programme and other schemes of the Ministry of Forest &
Environment, Schemes of the Ministry of Water Resources, PMGSY (Department of Rural
Development), SGSY (Department of Rural Development), Watershed Development Programmes
(Department of Land Resources, Ministry of Rural Development).

9.1.2 Modalities of Convergence

● All convergence initiatives should be within the objectives of the Mahatma Gandhi National
Employment Guarantee Act and provisions outlined in the guidelines of the respective converging
programme.
● Only MGNREGA registered households will be utilized for MGNREGA components.
● Financial Resources and / or Technical expertise of line departments may be utilized in works
implemented by the Panchayats as PIA (Project Implementing Agencies).
● The line departments can also act as PIA in implementation of MGNREGA works

9.1.3 Modes of Convergence

● Funds may be utilized from other schemes, to meet the cost of an identified part of the project
that could result in enhanced durability of assets created / proposed using MGNREGA funds.
● Funds may be made available from other schemes as livelihood components for putting to use
for livelihood, assets created / proposed using MGNREGA fund.
● Provision for technical input from line department officials and technical experts during the
work execution for improving the quality of assets created / proposed or for capacity building for
using assets for livelihood under MGNREGA.
● Gap filling, pooling funds of MGNREGA and other schemes and deploying pooled funds for
creation of an asset.
● Combination of two or more of the above modes.

9.1.4 Schemes for Convergence

Sl Scheme For Technical & Managerial expertise

1 Central / State Finance Commission Concerned line department and GPs

Grants

2 National Rural Livelihood Mission RD&PR Department

(NRLM)

3 Integrated Watershed Management Watershed Department

Programme (IWMP)

4 Total Sanitation Programme (TSC) Nirmal Bharath Abhiyan

5 Backward Region Grant Fund (BRGF) RD&PR Department

6 Rashtriya Krishi Vikas Yojana (RKVY) Agriculture Department

7 Repair, Renovation and Restoration (RRR) Minor Irrigation Department

(Ministry of Water resource)
 8 National Afforestation Programme (NAP) Forest Department

9 Pradhan Mantri Gramin Sadak Yojana RD&PR Department

(PMGSY)

10 National Horticulture Mission (NHM) Horticulture Department

11 Schemes funded from State budget Concerned line department and GPs

9.2 The departments to converge with Mahatma Gandhi NREGS

The following departments have been identified for convergence with Mahatma Gandhi NREGS.
1. Department of Agriculture
2. Department of Forest
3. Department of Horticulture
4. Department of Fisheries
5. Rural Development and Panchayath Raj
6. Animal Husbandry Department
7. Department of Food &Civil Supplies
8. Public Health Engineering Department
9. Sports of Youth Welfare Department
10. Water Resources Department
11. Rural Engineering Services Department
12. School Education Department
13. Child Development Department
The Convergence with the different departments depends on the states, different states have different
convergence plans based on the requirement.

9.3 Convergence Process

● Project for convergence work will be Identified and approved by the Gram Sabha.
● Works identified under convergence will be included in the shelf of projects.
● Planning for optimal use of available resources for convergence at district level.
● Development of technical proposals and estimates at respective levels. Prime role for developing
technical proposals will be held with the expertise of line departments.
● If the source of funding is more than one department i.e. other than Mahatma Gandhi NREGA
then both/all departments will prepare a composite project clearly defining activity wise budget
and/or technical support.
● The implementing department of the converging programme will provide necessary technical
expertise to the Gram Sabha so that convergence takes place in complementary manner.
● The programme Officer, Mahatma Gandhi NREGA and the Gram Panchayat will be responsible
for linking wage workers with the identified implementing agencies for convergence projects.
● E-muster roll will also be generated by Programme Officer, Mahatma Gandhi NREGA for all
PIAs.
● Projects in which funds are dovetailed from other schemes to meet the cost of an identifiable
part of the project, a complete project proposal including all project activities and budget will be
prepared.
● All wage and material payment of MGNREGA activities will be made directly through e-FMS.
● Issue of digital signature to all line department designated officers.
● The 60:40 ratio for wage and material costs will be maintained at Gram Panchayat level for
works to be taken up by Gram Panchayats.
● For the works to be taken up by all other agencies will be maintained at the Block/Janpad
Panchayat level.

9.4 Outcomes from convergence initiatives

● Increase in Social Capital: Collective planning and implementation among different
stakeholders will enhance social capital. This will improve management and work output.
● Increase in Physical Capital: The process will help in creating durable assets and will also
improve land productivity.
● Facilitation of Ecological Synergies: Natural resource base regeneration through different
Activities such as afforestation, drought proofing, flood proofing, and watershed will lead to
effective use of Resources.
● Mitigating Effects of Climate Change: NREGA helps in addressing issues such as CO2
emissions and industrial pollution and stemming.
● Enhancing Economic Opportunities: Income opportunities, savings and investments may be
generated through activities such as pisciculture.
● Strengthening Democratic Processes: Convergence awareness and planning at the grassroot
level will lead to greater ownership of projects.
● Facilitating Sustainable Development: Convergence efforts through creation of durable assets,
rural connectivity, productivity enhancement and capacity development lead to sustainable
development.
9.5 Some of the State Government’s convergence initiatives

Andhra Pradesh
State government has initiated convergence between NREGS and horticulture scheme
(comprehensive land development programme of NABARD, AP micro-irrigation project and
Schemes of Tribal Welfare department). Detailed government orders and instructions are issued on
implementation arrangements. Mandal level teams have been identified as convergence resource
groups. The State Government has initiated remarkable convergence of NREGS with the SHG
federations and this convergence is helping the SHG members to access all services under NREGS.
Assam
In the state there has been convergence of NREGS with SGSY. The State has also implemented the
project for Orange Cultivation and intercropping with Turmeric funded completely by NREGS, but
work was done jointly by NREGS and ICAR (KVK). NREGS has also been converged with DRDA
and the Social Forestry Division of the State. MoWR has also provided technical support for works
undertaken under NREGS to protect soil erosion.
Chhattisgarh
Government of Chhattisgarh has undertaken convergence initiatives for optimising irrigation
capacity of all major, medium and minor projects through construction of field channels, correction
of system deficiencies and drains. Most of the districts are taking up work on water resource
schemes under NREGA which were not provided under the State Budget. Some of the initiatives
include Shakambari Yojana, Goan Ganga Yojana, District Development Plan through convergence.
The district administration has weaved together the objectives of employment guarantee and overall
objectives of the development schemes under state plan/ non- plan, and central plan in these sectors.
They identify the resource gaps in these schemes and dovetail the labour component with EGS, and
thus achieve synergy and optimise productive utilisation of resources.
Gujarat
Government of Gujarat has initiated convergence between water resource department, environment
and forests department and agriculture department with NREGS. The important activities
undertaken through convergence are rainwater harvesting, dug wells, group irrigation wells,
vermicompost, lift irrigation and other agricultural activities.
Himachal Pradesh
Convergence in the State is being undertaken by involving the Public works department, Forest
department, Soil conservation department, Horticulture department, Silk Seed production
department and KVKs. There are many GPs that implement a convergence process adopted by State
level initiatives. Convergence has been made under various programmes i.e. SGSY, TSC &
Watershed by generating awareness about NREGA during awareness camps and training under
these programmes. Convergence has a huge scope in Himachal Pradesh as it enhances the livelihood
opportunities of the people as road connectivity and water harvesting play a great role in this.
Kerala
State government had developed a convergence plan with a focus on natural resource management
and eco-restoration. Expert professional agencies have prepared watershed-based District
Perspective Plans. State-level convergence meetings were held and State, district, block and gram
sabha level resources teams are in place. The convergence initiatives stress on overexploited, critical
and semi-critical artificial recharge of groundwater, renovation of irrigation projects under NREGA-
desilting, construction of field channels and also under large projects of eco-restoration of major
rivers Bharata Puzha and Kabani. The pilot districts have also prepared detailed village plan and
district technical manuals. The IEC and training module is based on the State Government's
Kutumbshree initiatives.
Madhya Pradesh
The State Government has formulated various sub-schemes under convergence of different schemes
for increasing agriculture-related activities. The initiatives undertaken are Kapildhara, Bhoomishilp,
Resham, Nandan Phal Udan and Sahastradhara. The state has undertaken such sub-schemes to
provide irrigation facilities to SC/ST/BPL/LR & IAY beneficiaries through dug wells/farm
ponds/stop dams/ check dams/minor tanks. Under the subschemes, there is provision to construct
recharging structures with dug wells, plantation of mulberry and other fruit trees. The pilot districts
have also undertaken NREGA watershed schemes in smaller areas in the pattern of watershed
schemes.
Maharashtra
In the State departments like Forest, Agriculture, fishery departments have utilized the NREGS fund
and engaged the NREGS job card holders in different works. To help the farmers diversify, crop
production initiatives have been taken by some of the districts in the state by converging NREGA
with NHM and NHB. By converging different schemes in villages, road connectivity has been
undertaken like villages to block roads, converting Kucha road to pebble road and to Tar road; CCT
and pucca roads in SC colonies which connect villages to nearby towns. NREGA has been
dovetailed successfully with the social forestry and irrigation department.
Orissa
NREGS works have been converged with other departments like Forest for digging trenches and
undertaking plantation, irrigation department for renovation of canal system, Sericulture,
Pisciculture, Soil Conservation, Public works department, and Welfare Departments like renovation
of play grounds and creation of water bodies inside ashram school by utilizing the NREGS funds
and engaged NREGS job card holders. NREGS has been converged with TFC in making durable
assets in the shape of concrete roads in 15 blocks. NREGS is dovetailed with the Backward Region
Grant Fund for Excavation of ponds.
Rajasthan
Krishi Vigyan Kendras (KVKs) in the pilot districts have provided plans for technical training on
vermicompost, improved rearing practices of goats, cattle and pig, poultry, production of planting
material of vegetables and fruits, bee-keeping and seed production. The State Government has
undertaken sub schemes, Harit Rajasthan for convergence of NREGA with other departments. Harit
Rajasthan is basically initiated to cope with the drought conditions of Rajasthan, by collaboration of
all the departments like Forest, PWD, Education, Health, Industries, Transport, Defense and
Paramilitary, NGOs etc. It is implemented in all the thirty-three districts including both urban and
rural areas.

Uttar Pradesh
Detailed State Guidelines on convergence have been issued. The guidelines consist of specific
projects and the methodology of convergence for sustainable development. The guidelines also
consist of activity-wise format for convergence between NREGS and other development schemes.
The state has undertaken 11 sub- schemes to provide irrigation facilities to SC/ST/BPL/LR & IAY
beneficiaries through dug wells/farm ponds/stop dams/ check dams/minor tanks.

West Bengal
Pilot districts had developed district convergence plans which focus on natural resource
management and eco- restoration. Like Kerala, the convergence initiatives focus on overexploited,
critical and semi-critical blocks, artificial recharge of groundwater, renovation of irrigation projects
under NREGA-desilting, construction of field channels and also under large eco- restoration. The
KVKs have provided training to block resource groups. The fisheries department is promoting
pisciculture in the water bodies created under NREGS.

9.6 Case study

Jalaamrutha a convergence project of MGNREGS
and the Agriculture Department in Belagavi District,
and aims to provide safeguard against drought and
crop failure
Belagavi District of Karnataka is a plateau region lying
on the lee side of the Western Ghats. Rainfall in this area
has been steadily decreasing over the last few years
adversely impacting agricultural productivity. The
situation got so worse in the 2016-17 financial year and
the region faced its worst drought in the last four decades
leading to an acute shortage of drinking water. The entire
district was declared drought hit. There was a total crop
failure and the farmers were in a miserable situation. The situation reached this stage because of
inadequate treatment of watershed structures.
The immediate relief was in terms of additional person days under MGNREGS. The wage earnings
would be able to offset the consumption gap. However something needed to be done for the long-
term relief as well. Zila Panchayat of Belagavi, being wary of the situation, initiated the
‘Jalaamrutha’ project for watershed treatment in 50 micro-watersheds in the district. Jala Amrutha is
supported by MGNREGS and is being implemented by the Agriculture Department, Government of
Karnataka. The Zila Panchayat of Belagavi proposes to ultimately implement this program in all
untreated micro-watersheds across the District.
Jala Amrutha follows the ‘ridge to valley’ approach of soil and water conservation with the active
participation of the residents of the watershed. There is sufficient evidence to prove that this
watershed management technique not only reduces soil erosion but also increases soil moisture
through groundwater recharge and surface storage leading to an increased biomass. The above
technique also ensures availability of drinking water and increases resilience of agriculture during
drought.

The project is implemented following the sequence of identification of micro watersheds,

community mobilization around the structure, participatory planning for increased ownership
followed by execution. The identification of micro watersheds in each Taluka was based on the
District Strategic and Perspective Plan which had listed these structures to be treated. Maps of the
area along with the information on land ownership was obtained and reconciled with the Micro
Watershed Maps. These maps were obtained from Karnataka State Remote Sensing Application
Centre, Bengaluru.

Gram Sabha meetings were called to conduct participatory resource appraisal exercises. The
landholders, with the help from the implementation team, prepared an action plan and listed out the
activities to be taken up in the micro-watershed treatment. Following approvals of each plan in the
Gram Sabha and by the District Programme Coordinator, work was implemented as per the
Programme Guidelines.
Over six thousand MGNREGS watershed works have been completed so far at a cost of Rs.1.6
crore. This work while generating seven lakh person days under MGNREGS has also created assets
in convergence with several line departments such as Agriculture, Horticulture, Sericulture, Animal
Husbandry, Forest Department and Panchayati Raj Engineering Department.
 CHAPTER 10

CASE STUDIES

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is currently in the
Fourteenth year of implementation. Today, with a budget outlay of Rs.61,500 crore for the FY
2020-21 alone, the centre has recently enhanced this amount by 40,000 crore. MGNREGS has
grown to become one of the world’s largest social protection schemes, providing livelihood security
to more than 12 crore households in rural India.
The programme has been constantly evolving over the years. While employment guarantee is the
primary objective, the scheme also seeks to develop durable assets and rural infrastructure at the
community and individual household levels for enhancing sustainable livelihood opportunities in the
rural areas. The Ministry has also been increasing the focus on Natural Resource Management in
MGNREGS works. Of the 155 permissible works under MGNREGA, 100 works are related to
NRM, of which 71 of them are exclusively related to water harvesting and conservation. More than
60 percent of the MGNREGA expenditure in FY 2017-18 (so far) has been on NRM related works.
This year during the Covid there are many new convergences happening and many new works are
being added.
While the tory on Jalaamrutha project in Karnataka focusses on watershed interventions, the Mission
6J in Karnataka is a holistic approach involving MGNREGS works on land, water, forests, etc. The
story on greening talks about the afforestation of 10,000 acres of hilly terrain in Andhra Pradesh,
while there are many stories about the impact of dug wells and farm ponds on small-scale
agriculture. While the eco-tourism project in Khokhar Kalan, Punjab contributed to flood- proofing
as well as development of a tourism spot, the revival of cardamom plantations in Sikkim helped the
farmers recuperate their traditional livelihood option. Rural connectivity works in Arunachal
Pradesh helped remote villages connect to schools and hospital facilities. The development of
basketball courts in Rajasthan and a play field in Jammu and Kashmir opened new arenas for
children and youth. Construction of IHHLs helped Sakkottai Gram Panchayat in Tamil Nadu
become open defecation free, while MGNREGA Sanchar in Madhya Pradesh is a move towards
good governance. These are some of the examples from different states now let's take a small village
and do an analysis for better understanding.
The case studies here are collected from the survey done in the village Dodda malligere. Which is in
Tumkur district of Karnataka. Through this case studies we would be explaining the problems faced,
Benefits, success stories and some projects which failed to serve the purpose. How the villagers are
using MGNREGS to build the assets in the village and also develop individual farm lands.
In the gram panchayat there are around 150 families and there are around 173 job card holders in
this year until october nearly 70% of the job card holders have completed their mandays and
remaining are already half way. Still 5 month for the financial year end villages are expecting for the
increase in Man days. This was different in the last year when more than 20% of mandays were left
unused. This year because of the COVID the demand for the NREGS job has increased.
Through the course of this chapter we shall explain a couple of examples of the asset building for
the community as well as individual farmers.

Perspectives for Analysis

 We have considered three perspectives here for the analysis one is the farmer, the other is the
government Official and the Big picture how the government looks at it. We are not making any
judgements from the inputs given by the farmer, official or the big picture shown by the
government.This is an effort to say things about how it's happening.
Case studies here are different types of MGNREGS works undertaken for water conservation and
management, improving rural infrastructure, supporting agriculture, horticulture and allied activities,
enhancing sustainable livelihood opportunities and the innovative processes adopted for supporting

MGNREGS implementation in the village.

Community Work
Best Practice of Ground water Harvesting
● This is a Boulder Check dam structure built at a cost of 70,000 Rs on a course of a natural
second order stream at a ratio of 60% labour and 40% Materials.
● Expected outcome of this structure is to recharge the groundwater table.
● This is a work for which the implementing agency is rural development and Panchayat Raj
Department and for which an assistant technical engineer prepares the action plan job is allotted
within the 15 days of the request raised.

Nursery Seedling Production

● The example here is of the forest department. The forest department uses MGNRES to develop
the seedlings packaging in the nursery.
● The jobs are offered to the villagers. The labours will have to work in the nursery in the
processes like pocket filling, seed sowing, sun light shifting, loading of the saplings.
● The labour wages are 275 per day and then these saplings are also provided under the
MGNREGS scheme for plantation in the farm lands.
● The expected out is to increase the biodiversity and the tree cover aiming at the 33% National
target
 Individual Works
Trench come Bund in a Horticulture Farm
● This is a work done along with the collaboration of the Horticulture Department. The job
request is raised at the Panchayath Development Officer. The file is passed on to the horticulture
department for approval and the implementation is done as per the design.
● The cost of this work is 125 Rs per meter and the wages for the employee is 275 Rupees. The
work is available once approved by the horticulture department.
● The photographs are uploaded into the MIS system of NREGS and once in a while a social audit
is done for the cross verification of work.
● The expected outcome of this work is water Conservation within the farm which will help the
horticulture crop

Tree
 Plantation
● Plantation work can be converged with various departments. All the forest tree based work can
be done with the Forest department, Horticulture crops with Horticulture department. The example
here is of the coconut tree plantation for which the horticulture department approval is required
● In this farmer has planted coconut trees in a three acre area the total cost under the scheme is
85,000 Rs which includes 60% labour at a rate of 319 Rs per pit (Labour would receive 275 Rs Per
day)and 40% for the materials that are the saplings.
● The outcome of the scheme is to make famer sustainable in his economic condition by giving a
guaranteed Income after the wait period.

Farm Pond
● Farm pond is a most successful work in karnataka these are implemented by Rural development and
Panchayat raj department and agriculture department also implements in association with MGNREGS
● There are two sizes of farm pond 12mt x 12mt costs around Rs 80,000 and a 9mt x 9mt with 5 steps costs
around 50,000
● This is one of the solutions that the government has found to fight drought.
● Around 5 farm ponds were dug in this financial year in the village
 Couple of other works are like Soak pit, Bordercheck recharge well, Vermi compost unit, CC Road,
Restoration of the tanks and wells, Restoration of school building and many more.

COVID & NREGA

● As said earlier in the course of the report COVID has created a huge demand for the work.
Figure 10.1: Person Days generated

● This year the gram panchayat of Dodda Malligere has utilized more than 70% of man days with
still 5 month in the financial year.
● The villagers are requesting for more and more jobs and also increase the man days
Future Plans for the Village
Couple of works which the villagers have requested and the process of preparing the action plan is in
place. Couple of them are.
● Rain water harvesting system for the school Building
● Dry waste and wet waste management system using it for Manuring
● Restoration of the Village pond
● Recharging units for all the borewells
Following is the Tabular column prepared from the NREGS Website Data for the Gram Panchayat
under which the above Village comes.

Table 10.1: MGNREGA tabular column

State : KARNATAKA District : TUMKUR Block : TURUVEKERE Panchayat : As on 03-11-

MANICHENDUR 2020
I Job Card

Total No. of JobCards issued 1,285

Total No. of Workers 2,997
Total No. of Active Job
Cards 852
Total No. of Active Workers 1,565
(i)SC worker against active
workers[%] 5.81
(ii)ST worker against active
workers[%] 0.7
II Progress FY 2020-2021 FY 2019-2020 FY 2018-2019 FY 2017-2018 FY 2016-2017
Approved Labour Budget 0 0 0 0 0

Persondays Generated so far 27,770 28,214 25,279 20,276 16,304

% of Total LB 0 0 0 0 0
% as per Proportionate LB 0
SC person days % as of total
person days 3.76 5.49 4.05 4.4 4.29
ST person days % as of total
person days 0.14 0.54 0.42 0.55 0.68
Women Persondays out of
Total (%) 47 49.86 46.31 43.82 42.77
Average days of
employment provided per
Household 42.08 50.38 56.68 52.26 54.35
Average Wage rate per day
per person(Rs.) 275.09 248.98 249.04 235.99 224.09
Total No of HHs completed
100 Days of Wage
Employment 1 58 53 9 19
Total Households Worked 660 560 446 388 300
Total Individuals Worked 1,222 992 853 821 687
Differently abled persons
worked 1 1 1 1 1
III Works
Number of GPs with NIL
exp 0 0 0 0 1
Total No. of Works Taken
Up (New+Spill Over) 293 254 217 154 131
Number of Ongoing Works 230 140 141 92 42
Number of Completed
Works 63 114 76 62 89
% of NRM
Expenditure(Public +
Individual) 52.82 62.38 42.86 58.9 0
% of Category B Works 53.24 65.75 67.74 69.48 57.25
IV Financial Progress
Total Exp(Rs. in Lakhs.) 96.09 111.24 84.74 25.33 0
Wages(Rs. In Lakhs) 57.09 58.12 40.58 25.33 0
Material and skilled
Wages(Rs. In Lakhs) 38.99 53.11 44.17 0 0
Material(%) 40.58 47.75 52.12 0 0
Total Adm Expenditure (Rs.
in Lakhs.) 0 0 0 0 0
 Admin Exp(%) 0 0 0 0 0
Average Cost Per Day Per
Person(In Rs.) 553.82 283.04 299.37 259.72 224.09
% of Total Expenditure
through EFMS 100 100 97.35 100 0
% payments generated
within 15 days 99.84 99.19 76.44 63.85 38.07

CHAPTER 11
MGNREGA: A CRITICAL ANALYSIS

11.1 Constitutional goals of MGNREGA: The idealistic edge

11.1.1 Implementation of ‘Directive Principles of State Policy’ (DPSP)

 The MGNREGA aims to follow the DPSPs enunciated in Part IV of the Constitution of India.
 The law by providing a ‘right to work’ is consistent with Article 41 that directs the State to
secure to all citizens the right to work.

 The statute also seeks to protect the environment through rural works which is consistent with
Article 48A that directs the State to protect the environment.

 It also follows Article 46 that requires the State to promote the interests of and work for the
economic uplift of the SCs and STs and protect them from discrimination and exploitation.

 Article 40 mandates the State to organise village panchayats and endow them with such powers
and authority as may be necessary to enable them to function as units of self-government

 Conferring the primary responsibility of implementation on Gram Panchayats, the Act adheres
to this constitutional principle.

11.1.2 Implementation of ‘Fundamental Rights’ (FRs)

 In accordance with the Article 21 of the Constitution of India that guarantees the right to life
with dignity to every citizen of India, this act imparts dignity to the rural people through an
assurance of livelihood security.
 The FRs enshrined in Article 16 of the Constitution of India guarantees equality of opportunity
in matters of public employment.

11.2 The success of MGNREGA

11.2.1 Rural Labour

14.62 crores person-days of work generated till 13th May 2020.Actual expenditure till date is around
Rs.10,000Crore. Work offered to 2.33 Crore wage seekers in 1.87 Lac grampanchayats. Average
wage rate rose to Rs. 202 from Rs. 182 in last FY. Planning for continuing MGNREGA work in
monsoon as well: Plantations, Horticulture and livestock related sheds.

11.2.2 Equality promoted

Equal work opportunity is a reverie in India, without being discriminated on basis of caste and
gender. MGNEGA showed that it is possible for equality to prevail in work. The scheme gives equal
opportunity to work for everyone regardless of caste or gender. Equal pay for men and women is a
daydream in India but MGNERA made it possible for rural women to have equal earning
opportunity along with men.Out of the total employment, 56% have been generated for women. This
is the highest ever participation of women since inception of the programme.

11.2.3 Restoration of wells and ponds

NREGA has reached out to many remote villages and helped in restoration of ponds by removing
silt. Many wells have been prevented from drying in summer heat. Along with employing people of
these villages in developing watering facilities for them, NREGA has resolved the issues of water
restoration in many ways. Building and revival of water conservation structures is one of the best
works done under this scheme.

11.2.4 Geo-MGNREGA

Geo-MGNREGA is a path breaking that uses space technology for geo-tagging all assets created
under MGNREGA for improved planning, effective monitoring, enhanced visibility and greater
transparency. The initiative was implemented in FY 2016-17, and so far, nearly 65 Lakh assets have
been geo-tagged and made available in the public domain
11.2.5 Water Conservation

For the first time since inception of the programme, Consolidated Guidelines for Water
Conservation were drafted. Mission Water Conservation – Planning and monitoring Framework for
Natural Resource Management (NRM) related works under MGNREGA in convergence with
‘PradhanMantri KrishiSinchayeeYojan’ (PMKSY) and ‘Integrated Watershed Management
Programme’ (IWMP) has been prepared for scientific planning and execution of water management
works with the use of latest technology is the focus area of the Ministry.

11.2.6 Restorations at the Sundarbans

Embankments were built to prevent high tide and flood waters from drowning habitation areas.
Flood protection work was undertaken at large scale. Refurbishment of mangroves to prevent
erosion of soil has also worked very well.

11.2.7 Other beneficiary works

NREGA collaborated with fishery department to generate profit from fish farm ponds dug by them.
Plantation and afforestation work under this scheme have had positive effect on the environment.
Recharging public wells and borewells have also been undertaken by NREGA which have proved to
be advantageous in many districts of Jharkhand and Karnataka.

11.2.8 Waste recycling work

In Tamil Nadu and adjoining states, NREGA workers have undertaken an excellent waste
management project. They collect discarded garbage from households and collect them in a yard.
The bio-degradable waste is composted while the non-degradable waste is sold to road contractors to
use them in road laying

11.2.9 Cleaning work

A good part of the NREGA program took to cleaning. Water supply channels like ditches along the
roads were cleared. In districts of Tamil Nadu, the NGREGA took to cleaning bushes and grass in
the channels to ensure better drainage. This proved to be beneficial as fewer bunds were breached
during the recent flood in the state.
 FY Budget outlay (In Rs crore)
2006-07 11300
2007-08 12000
2008-09 30000
2009-10 39100
2010-11 40100
2011-12 40000
2012-13 33000
2013-14 33000
2014-15 34000
2015-16 71695.08
2016-17 38500
2017-18 48000
2018-19 55000
2019-20 60000
2020-21 61500

Table 11.1: Budget Outlay

Budget outlay (In Rs crore)

80000

70000

60000

50000

40000 Budget outlay (In Rs crore)

30000

20000

10000

0
0 7 0 8 0 9 10 11 12 1 3 1 4 1 5 16 17 18 1 9 2 0 2 1
0 6- 07- 08- 09- 10- 11- 12- 13- 14- 15- 16- 17- 18- 19- 20-
2 0 2 0 2 0 20 20 20 2 0 2 0 2 0 20 20 20 2 0 2 0 2 0

Figure 11.1: Budget outlay

 11.3 Present Concerns in MGNREGA

11.3.1 Insufficient budget allocation

 Increase in nominal budget but actual budget (after adjusting inflation) decreased over years.
 Though allocated 55,000 crore, the actual value of budget allocation of 2018-19 is much lower
than that of 2010-11.
 In 2018, Rs 7,000 crore has been allocated from “Extra Budgetary Resources (EBR)”. Annual
outlay remains same as 2017-18.

11.3.2 Recent Budget (2020-2021)

 As per the Union Budget document tabled by Union Finance Minister NirmalaSitharaman in
Parliament, Rs 61,500 crore has been allocated for the ‘Mahatma Gandhi National Rural
Employment Guarantee Scheme’ (MGNREGS) for the year 2020-21.

 It shows that funds allotted for MGNREGA came down by more than 13 per cent from the total
estimated expenditure for 2019-20 which was at Rs 71,001.81 crore.

11.3.3 Shift to Supply-driven programme

 The Centre through the arbitrary “Approved Labour Budget” has reduced the number of days of
work and put a cap on funds through the National Electronic Fund Management System
 According to Ne-FMS guidelines, states won’t be allowed to generate employment above the
limits agreed by Approved labour Budget.
 This has made the programme supply-driven

11.3.4 Poor wages rate

 Stagnation of wage rate due to delinking MGNREGA wage rates from Minimum Wages Act,
1948
 MGNREGA wages are lower than minimum wages in most states
 This could push marginalized section to take up vulnerable and hazardous jobs

11.3.5 Delay in wage payments

 As of 2016-17, total amount of wage pending is Rs. 11000 crore

 In current financial year, 25% of Funds Transfer Order (FTOs) pertaining to wage payment from
January to April is pending to be processed by Centre.

11.3.6 Gram RozgarSevak:

 The gram rozgarsevak, the backbone of the entire scheme, who works part-time, living in the
same village, does not get paid on time.
 The technical assistants who make site visits are inadequate in number. The process of planning,
which has to prepare works ready to use so that they can be on the shelf, so to speak, when demand
arises, falls short.

11.3.7 Ground Reality:

 Even though the scheme aims at providing 100 days of guaranteed employment, below 50 days
of employment was actually provided on an average at an all-India level in FY 18. None of the states
were able to provide full 100 days employment as mentioned in the scheme, as per extracts from the
latest RBI annual report.
 As per the official numbers available on the MGNREGA website, in FY18 average days of
employment provided per household was 45.77 which was only 46 in FY17 and 40.17 days in
FY15.
 A recent study have found that data manipulation in the Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA) is leading to gross violations in its implementation.

11.4World Bank recommendations

 Since 2012, an average of 18 per cent of the annual budgetary allocation for MGNREGA has
been spent on clearing pending liabilities from the previous years.
 Even this financial year began with pending wage and material liabilities of Rs 16,045 crore.
 An allocation of Rs 1 lakh crore for FY 2020-21 would mean that approximatelyRs 84,000
crore is available for employment generation this year.
 This will still be the highest allocation for MGNREGA in any year since the passage of the law.
 However, the allocation, which amounts to 0.47 per cent of the GDP continues to be much lower
than the World Bank recommendations of 1.7 per cent for the optimal functioning of the
programme.

11.5 Recommendations from The Standing Committee on Rural Development

11.5.1 Regulation of job cards

Offences such as not recording employment related information in job cards and unlawful
possession of job cards with elected PRI representatives and MGNREGA functionaries should be
made punishable under the Act.

11.5.2 Participation of women

Since the income of female workers typically raises the standard of living of their households to a
greater extent than their male counterparts, the participation of women must be increased

11.5.3 Participation of people with disabilities

Special works (projects) must be identified for people with disabilities and special job cards must be
issued and personnel must be employed to ensure their participation.

11.5.4 Utilization of funds

The Committee found that a large amount of funds allocated for MGNREGA have remained un-
utilised. For example, in 2010-11, 27.31% of the funds remained unutilised.
The Committee recommends that the Department of Rural Development should analyse reasons for
poor utilisation of funds and take steps to improve the same. In addition, it should initiate action
against officers found guilty of misappropriating funds under MGNREGA.

11.5.5 Context specific projects and convergence

Since states are at various stages of socio-economic development, they have varied requirements for
development. Therefore, state governments should be allowed to undertake works that are pertinent
to their context. There should be more emphasis on skilled and semi-skilled work under
MGNREGA. In addition, the Committee recommends a greater emphasis on convergence with other
schemes such as the National Rural Livelihoods Mission, National Rural Health Mission, etc.

11.5.6 Payment of unemployment allowance

Dated receipts for demanded work should be issued so that workers can claim unemployment
allowance. Funds for unemployment allowance should be met by the central government.

11.5.7 Regular monitoring

 National Level Monitors (NLMs) are deployed by the Ministry of Rural Development for regular
and special monitoring of MGNREGA and to enquire into complaints regarding mis-utilisation of
funds, etc. The Committee recommends that the frequency of monitoring by NLMs should increase
and appropriate measures should be taken by states based on their recommendations. Additionally,
social audits must mandatorily be held every six months. The Committee observes that the
performance of MGNREGA is better in states with effective social audit mechanisms.

11.5.8 Training of functionaries

Training and capacity building of elected representatives and other functionaries of PRIs must be
done regularly as it will facilitate their involvement in the implementation of MGNREGA.

11.6 Some immediate steps to ensure the MGNREGA lives up to its potential
 First, state governments must ensure that public works are opened in every village.
 Workers turning up at the worksite should be provided work immediately, without imposing on
them the requirement of demanding work in advance.
 Second, local bodies must proactively reach out to returned and quarantined migrant workers
and help those in need to get job cards.
 Third, at the worksite, adequate facilities such as soap, water, and masks for workers must be
provided free of cost. For reasons of health safety, MGNREGA tools should not be shared between
workers.
 The government should provide a tool allowance to all workers — some states are already
providing such an allowance.
 Fourth, procedures for implementing MGNREGA must be simplified but not diluted.
 The pandemic has demonstrated the importance of decentralised governance.
 Gram panchayats and elected representatives need to be provided with adequate resources,
powers, and responsibilities to sanction works, provide work on demand, and authorise wage
payments to ensure there are no delays in payments.
 Fifth, as per a study by the RBI, more than half the districts in the country are under-banked.
 The density of bank branches in rural India is even more sparse
 At this time, payments need to not only reach bank accounts on time, but cash needs to reach the
workers easily and efficiently.
 The limited coverage of bank infrastructure in rural areas must not be made a hurdle.
 Attempts to distribute wages in cash, sans biometric authentication, must be rolled out.
 Sixth, there needs to be flexibility in the kinds of work to be undertaken, while ensuring that the
community and the workers are the primary beneficiaries.
 11.7 Some innovation in MGNREGA that can go a long way

11.7.1 Looping in the skilled worker

 First, there is a suggestion to use it to meet the wage cost of their employment in small and
medium enterprises (SMEs).
 Accordingly, skilled migrant workers may be placed in SMEs and their wages would be charged
to MGNREGA.

11.7.2 Including farm related works

 In the last few years, un-remunerative prices of several crops have been the root cause of
widespread agrarian distress.
 The suggestion is to allow farmers to employ MGNREGA workers in agricultural operations
like land preparation, sowing, transplantation of paddy, plucking of cotton, intercultural operations
and harvesting of crops etc. so as to reduce the cost of cultivation.
 The idea is to pay part of the wages of labour in agricultural operations from MGNREGA.

11.7.3 Increasing the number of Work Schemes

 Currently, there are only 2-3 work schemes (say PMAY) running per panchayat, which is
leading to the crowding of workers at worksites.
 To prevent this and to ensure that all willing households are able to access employment through
NREGA, the number of schemes needs to be increased, and 6-8 schemes must be introduced in each
village.

11.7.4 Paying Workers Immediately

 Rural households urgently need cash-in-hand, and so the emerging demand is for immediate
payment to workers. NREGA payments are frequently delayed by weeks or months.
 Given the circumstances, such delays will be entirely counterproductive.
 It is recommended that in remote areas, wage payments should be made in cash, and paid on
the same day.

11.7.5 Modify Daily Workloads

 In compliance with COVID-19 guidelines, workers are wearing masks and other forms of face
protection.
 NREGA works typically involve hard physical labour and workers are finding it challenging
to breathe comfortably while working.
 Consequently, for as long as workers are required to wear masks, the daily volume of work
assigned to them must be reduced.

11.7.6 By increasing Wages

 If NREGA wages are to effectively support rural households as they cope with this crisis,
they must, at a minimum, be at par with states’ agricultural wages.
 For example, the Government of Odisha has increased the daily-wage rate for unskilled manual
work under NREGA to INR 298 per day in its 20 migration-prone blocks.

11.7.7 Increase budgetary allocations

 The central government’s budgetary allocation of INR 61,500 crore to NREGA for FY 2020-21
is inadequate.
 An additional Rs 1 lakh crore needs to be allocated so that NREGA can act as a safety net and
help rural households cope with the devastating impact of the lockdown.

REFERENCES