IMPACT OF NREGA ON WAGE RATES, FOOD SECURITY AND RURAL URBAN MIGRATION IN GUJARAT

Transcription

1 Research Study No IMPACT OF NREGA ON WAGE RATES, FOOD SECURITY AND RURAL URBAN MIGRATION IN GUJARAT V.D.SHAH MANISH MAKWANA AGRO-ECONOMIC RESEARCH CENTRE SARDAR PATEL UNIVERSITY VALLABH VIDYANAGAR GUJARAT MAY 211

2 Foreword Amidst great hype and hope, Indian parliament passed a revolutionary novel and unique Act Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in 25. It aims at arresting out-migration and enhancing food and livelihood security of rural peoples on a sustained basis. It is a major initiative of Government of India towards poverty reduction and income generation among rural poor families. MNREGA is a unique welfare programme in the world, as no country in the world has ever given a legal right of this kind to such a large population. MNREGA is expected to address the worst kind of poverty in the country, as it provides a legal guarantee for 1 days of employment in every financial year to the poor rural households at statutory minimum wages. It also introduced novel features of unemployment allowance. MNREGA is not a welfare programme dishing out doles. It is a development initiative chipping at durable productive assets which give momentum to growth process in rural area by improving the purchasing power. MNREGA programme was implemented in all the rural districts of the country since April, 28. There exist a mix bag of opinions on level of impact and functioning of MNREGA. At present, degree of impact, implementation, irregularities and corruption in MNREGA programme has become a hot issue of debate for researchers, academicians and politicians. The conflicting views on level of corruption, functioning and degree of impact indicates that clear picture on effectiveness of the Act yet to emerge. Keeping this controversy and debate in view, the Directorate of Economics & Statistics, Ministry of Agriculture, Government of India asked Agro-Economic Research Centre, Vallabh Vidyanagar, Gujarat to undertake study on probing and quantify the impacts of MNREGA on different parameters and constraints affecting the effectiveness of the programme in State. The study is intended to assess the pros and cons of MNREGA programme. The study conducted in 18 States and coordinated by Prof. Pramod Kumar, Institute of Social and Economic Change (ISEC), Bangalore. i

3 The study was conducted in 5 selected districts namely Dahod, Navsari, Banaskantha, Surendranagar and Jamnagar of Gujarat State. From each selected district, 2 villages and from each village, 2 participants and 5 nonparticipants comprising SC, ST, OBC and others were selected. The field data were collected by recall from 25 sample households for calendar year 29. The study shows that MNREGA holds the key for the development of rural areas, poverty reduction and income generation among rural poor households. However low to moderate impact on income level, wage rate of unskilled labour, food security and livelihood of rural peoples was made by the programme. The people s awareness on their legal rights under MNREGA was found below expectation. The MNREGA not able to generate the kind of employment demand as expected. On the basis of survey report, policy suggestions have been made to improve the development, effectiveness of MNREGA. The results of the study suggests that after implementing corrective measures, MNREGA holds out prospects of not only transforming livelihoods of the poorest people, but also heralding a revolution in rural governance of India. Shri V D Shah, Research Officer of our centre, put in lot of efforts and unquantifiable work for preparing this enrich and excellent evaluation research report. The special thank to Shri Manish Makwana, Research Associate of our centre and to entire project team for providing necessary help and co-operation at all the stages of study report. We will feel extremely rewarded if the finding of the study can generate sufficient interest among academicians, policy makers and those who have keen interest in agricultural and rural development of country. Date: Place: Vallabh Vidyanagar Dr. R. H. Patel Director ii

4 Preface The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was enacted in 25 to provide a minimum guaranteed wage employment of 1 days in every financial year to rural households with unemployed adult members prepared for unskilled manual work. MNREGA ranks among the most powerful initiatives ever undertaken for transformation of economy of rural households in India. It holds out prospect of not only transforming livelihood of poorest people but also heralding a revolution in rural governance of India. It aims at arresting outmigration and enhancing food and livelihood security of rural peoples on a sustained basis. It recognizes employment as a legal right. MNREGA is in implementation in all the rural districts of the country since April, 28. At present, degree of impact, implementation, irregularities and corruption of MNREGA has become a hot issue of debate for researchers, politicians etc. Keeping controversy and debate in views, Directorate of Economics and Statistics, Ministry of Agriculture, Government of India asked to undertake this study. In this study, attempt has been made to assess the impact of MNREGA on wage rates, food security and rural urban migration in five selected districts of Gujarat State. The study is based on both, secondary and primary data. The primary data collected for the reference year 29 from 2 participant and 5 non-participant households spread over 5 districts namely Banaskantha, Navsari, Dahod, Surendranagar and Jamnagar of Gujarat State. This report is a product of support, help and contribution from many individuals and organisations. I commend all of them for their valuable contribution. I would like to place on record my sincere thanks to Dr. R.H.Patel, Director of our centre, Dr.Mahesh Pathak, Hon. Advisor of centre and Dr. R.A.Dutta, Deputy Director of centre for providing valuable guidance and infrastructural support as and when needed. Special thanks are due to Shri H.N.Chibber, Additional Commissioner (MNREGA), Commissionerate of Rural Development, Government of Gujarat and all MNREGA officials at study districts / talukas for providing necessary help and support at all iii

5 stages of the study. I would like to thank Sarpanch / Talati of selected villages, sample households and all others who have directly or indirectly provided valuable help and support in field work and preparing this valuable report. I am equally grateful to Dr.M.N.Swain, Research Officer for helping in Logit analysis. I register my special thank to Shri Manish Makwana, Research Associate at centre and entire project team for their help, support and contribution in making this study so enrich. I am also thankful to Prof. Pramod Kumar, Institute for Social and Economic Change, Bangalore, who as a co-ordinator of the study provided valuable guidance and all kind of support as and when needed. I am equally grateful to Mr. Utpal Ghosh, Economic & Statistical Advisor, Directorate of Economics and Statistics; Mr.B.S.Bhandari, Advisor, Ministry of Agriculture, GoI; Mr. V.P. Ahuja, Additional Economic Advisor, Ministry of Agriculture, GoI and Mr.B. Naik, Economic Officer, Ministry of Agriculture, GoI for providing their help as and when needed. I am sure the findings and recommendations of the study will be useful for administrators, policy makers and those who have interest in rural development of the country. Date: Place: Vallabh Vidyanagar V.D.Shah Project Leader iv

6 Project Team Sr. No. Activities Name Designation 1 Project Leader Shri V. D.Shah Research Officer 2 Project Assistant Shri Manish Makwana Research Associate 3 Field work Team Shri Manish Makwana Research Associate 4 Tabulation / Data Processing 5 Data / Draft Entry Shri C. M. Patel Shri J. S. Raj Shri Hitesh Makwana Shri J. N. Singh Field Supervisor (CCS) Agriculture Assistant (CCS) Agriculture Assistant (CCS) Computer (CCS) Shri Manish Makwana Research Associate Shri J. B. Kahar Shri Himanshu Parmar Shri Hemal Padhiyar Ms. Kalpana kapadia Data Entry Operator Research Fellow Research Fellow Research Associate 6 Secondary Shri Shreekant Sharma Research Associate Data Tabulation 7 Miscellaneous Shri Vinod Parmar P.A. to Director v

7 Contents Chapter No. Title Page No. Foreword Preface Project Team List of Tables i iii v ix CHAPTER 1: Introduction Background 1.2 Workfare Programmes in India 1.3 Mahatma Gandhi National Rural Employment Guarantee Act 1.4 Review of Literature On MNREGA 1.5 Need of the Study 1.6 Objectives of the Study 1.7 Sampling Design 1.8 Reference Year 1.9 Data Collection 1.1 Limitation 1.11 Organization of Study Report CHAPTER 2: Agricultural Profile, Functioning and Socio-Economic Characteristics of MNREGA in Selected Districts and State Section I Demography Details of Selected Districts and State Population Agriculture Profile of Selected Districts Section II Functioning, Employment and Socio-Economic Characteristics of MNREGA Implementation and Administrative Setup in Gujarat Job Cards Issued and Employment Generation by Sex and Castes Works Undertaken under MNREGA during 28-9 to Expenditure on Works Undertaken under MNREGA Social Auditing and Inspection of MNREGA works Unemployment Allowance Wage Payment through Banks/Post Offices vi

8 2.2.8 Work projection under MNREGA for Summary CHAPTER 3: Characteristics, Income and Consumption Pattern of Sample Households 3.1 Demographic Profiles of the Sample Households 3.2 Per Household Occupation (Activity) wise Mandays Source-wise Per Household Annual Net Income Item-wise Food Consumption (Per Capita / Month) Per Capita Monthly Consumption Expenditure of Sample Households Inequality (variability) in Income and Consumption of Sample HHs Factors Impacting Participation in MNREGA-Logit Regression Analysis Summary CHAPTER 4: Work Profile, Wage Differential and Migration under MNREGA 4.1 Work Profile under MNREGA of Sample HHs Activity-wise Employment under MNREGA The Out-Migration Incidents Wage Differentials between MNREGA and Non-MNREGA works Summary CHAPTER 5: The Qualitative Aspects of the Functioning of MNREGA Assets Holding (Rs. /HHs.) 5.2 Borrowings by Sample Households Borrowing Sources in Sample Villages and Investment in Assets by Sample HHs Some Qualitative Aspects of Functioning of MNREGA 5.5 Quantitative Information with Reason on Functioning of MNREGA 5.6 Beneficiaries Perception on Potential Benefits of MNREGA 5.7 Perception of Beneficiaries on Food Security and Related Aspects with Suggestions to Improve MNREGA Functioning Summary vii

9 CHAPTER 6: MNREGA impact on village economy Infrastructure Availability within Study Village Changes in Occupational Pattern Effects of MNREGA on Wage Rates in Study Villages 6.4 Effects of MNREGA on Labour Charges for Agricultural Operations 6.5 Some Questions about Functioning of MNREGA Summary CHAPTER 7: Concluding Remarks And Policy Recommendations A. Concluding Remarks B. Policy Recommendations Bibliography Appendix- 1 to Comments from the Co-ordinator 198 Action taken on the comments 199 viii

10 List of Tables Table No. Title Page No. 1.1 Performance of NREP in the sixth and seventh five year plan Performance of RLEGP in the Seventh Plan Employment Generated By SGRY and NFFWP-22-3 to Total Employment Generated and Expenditure under MNREGA in India to Details of Selected Sample Districts and Sample Villages Demography Details of selected District and State Agricultural Statistics at a Glance for Selected Districts (i) Fund Availability and Utilization for MNREGA in Gujarat State (ii) Fund Availability and Utilization for MNREGA in Gujarat State (i) Employment generated through MNREGA and its socio-economic characteristics in Gujarat (ii) Employment generated through MNREGA and its socio-economic characteristics in Gujarat (iii) Employment generated through MNREGA and its socio-economic characteristics in Gujarat (Till Aug. 21) (i) District wise number of works completed/progress under MNREGA (ii) District wise number of works completed/progress under MNREGA (iii) District wise number of works completed/progress under MNREGA (Till Aug -21) (i) District wise amount spent on works completed/progress under MNREGA (ii) District wise amount spent on works completed/progress under MNREGA (iii) District wise amount spent on works completed/progress under MNREGA (Till Aug 21) (i) District-wise social auditing and inspection of MNREGA works in Gujarat (ii) District-wise social auditing and inspection of MNREGA works in Gujarat (iii) District-wise social auditing and inspection of MNREGA works in Gujarat-21-11(Till Aug 21) Unemployment Allowance Paid (21-11)-Gujarat (i) District-wise wage payment through banks/post offices in Gujarat (ii) District-wise wage payment through banks/post offices in Gujarat (iii) District-wise wage payment through banks/post offices in Gujarat (Till Aug 21) Work projection under MNREGA for Gujarat State (i) Work projection under MNREGA for Banaskantha District (ii) Work projection under MNREGA for Dahod District 68 ix

11 2.1(iii) Work projection under MNREGA for Navsari District (iv) Work projection under MNREGA for Jamnagar District 7 2.1(v) Work projection under MNREGA for Surendranagar District Demographic profiles of the Sample Household (% of HHs.) Per Household Occupation - Wise Man-days Household Net Annual Income (Rs per HH.) Per Capital Per Month Consumption of Food Items For Sample HHs Per Capita Monthly Consumption Expenditure of Sample HHs Inequality (Variability) in Consumption and Income of Sample HHs Determinants of participation in NREGA (Logit function) Factors Affecting MNREGA employment (HH Level OLS Regression) Factors Affecting MNREGA employment (Member Level OLS Regression) The Work Profile Under MNREGA For Beneficiary Sample Households In Selected Districts (Ref.period Jan-Dec. - 29) The activity-wise employed under MNREGA and the quality of assets created 29 (% of HHs.) The Migration Incidents Recorded During January December 29 (For Beneficiary HHs.) Wage Differentials Between different activities Assets Holdings (Rs/HHs.) Average Borrowings per sample Household-29 (Rs. /HHs.) Household Status on Borrowing -29 (% of HHs.) Qualitative Information Related to Functioning of MNREGA (% of Ben. HHs.) Quantitative Information with Reasons on Functioning of MNREGA (% of Bene.HHs.) Beneficiaries Perception on Potential Benefits of MNREGA (Percentage of HHs.) Perception of Beneficiaries on Food Security and Related Aspects with Suggestions to Improve MNREGA Working (% of Ben. HHs.) Infrastructure available within sample villages (percentage to villages) Occupational pattern (% of HHs. Of sample villages) Effects of MNREGA on Wage Rates of different Activities (Average of all sample villages - Rs. /Day) Prevailing labour charges for agricultural operations (Average of all villages) Qualitative Questions on Changes In the Villages During Last One Year (% of HHs.) Quantitative Questions About the Functioning of MNREGA 154 Appendix- 1 to x

12 Chapter - 1 Introduction 1.1 Background: Indian economy suffers from several distortions since independence. Though, current Indian economy is on a higher growth trajectory, it still suffers from high incidence of poverty and unemployment in rural India. Agriculture and allied sectors, which houses atleast 6 percent of the Indian population is a backbone of rural economy. The low rate of growth of agriculture sector also affected the rate of creation of employment opportunities in rural areas. It is observed that majority of the poor in rural areas of the country largely depend on the wages earned through unskilled casual manual labour. They are often on threshold levels of subsistence and are not free from possibility of sinking from transient to chronic poverty. The inadequate labour demand in lean period or unpredictable events like natural disaster or personal ill-health, all such have adverse impact on the level of employment, income and livelihood securities of rural population. In a context of rural poverty and unemployment, workfare programmes are considered as most important interventions. These programmes typically provide unskilled manual workers with short term employment on public works such as irrigation, soil and water conservation, rural connectivity, reforestation etc. These all workfare programmes provide income transfer to poor households in critical times and prevent worsening their poverty and food security particularly during slack agricultural seasons. It was realized that workfare programmes for sustainable poverty alleviation has to be based on increasing the productive employment opportunities in the process of growth itself. The durable assets created under such workfare programmes may also have the potential to generate second round of employment benefits. 1.2 Workfare Programmes in India: The need to erect a mechanism to supplement existing livelihood sources in rural areas was recognised long back in development planning in India. The Government of India and State Government introduced number of workfare programmes that offered wage employment on public works to needy rural households. The wage employment programmes started since 1

13 long back. It started as pilot projects in the form of Rural Manpower (RMP) [196-61], Crash Scheme for Rural Employment (CRSE) [ ], Pilot Intensive Rural Employment Programme (PIREP ) [1972], Small Farmers Development Agency (SFDA), Marginal Farmers & Agricultural Labour Scheme (MFAL) to benefit the poorest section of the poor. These experimental programmes were converted into a full fledge wage employment programme in the form of Food for Work Programme (FWP) [1977]. In the sixth five year plan assigning more stress on employment and poverty alleviation, FWP was further streamlined and Ministry of Rural Development (MoRD), Government of India ( GoI) launched National Rural Employment Programme (NREP) [198]. The generation of additional gainful employment in rural areas and creation of durable assets were important objectives of this programme. The detail on resource availability, expenditure, employment generation etc. under NREP is shown in below given Table-1.1. Table 1.1: Performance of NREP in the sixth and seventh five year plan Year Resource availability ( Rs.crores) Expenditure (Rs. crores) Employments generation (in million man days) Man averag e-day cost (Rs.) Wage: Material ratio : : : : : : :43 Source: Planning commission, GoI (199) NA=Not Available The NREP had a substantial impact on stabilization of wages in rural areas, employment and creation of community assets. The main drawback of NREP was that it lacked a direct focus on the target group, landless and poorest of poor. In August 1983, Rural Landless Employment Guarantee Programme (RLEGP) was introduced by MoRD, GoI. The main objective of RLEGP was providing guarantee of employment to at least one member of every landless household upto 1 days per year and creating durable assets. RLEGP was 2

14 fully financed by central government and its implementation was entrusted to States/ UTs. They were required to prepare specific projects for approval by central committee. During , central committee approved 32 projects with estimated cost of Rs crores. The details of employment generation and others during seventh plan under RLEGP are shown below. Table 1.2: Performance of RLEGP in the Seventh Plan Resource Expenditure Man Year Employments availability (Rs. averageday cost generation (Rs. crores) (in million crores) (Rs.) man days) Wage: Material ratio Source: Planning commission, GoI (199) On the basis of lesson learnt, NREP and RLEGP were merged and named as Jawahar Rozgar Yojana (JRY) in In JRY, Central and State contribution was 8:2. The JRY was launched with total allocation of Rs.26 crores to generate 93.1 crores mandays of employment. The main objective of JRY was generation of additional employment on productive works which either benefit to the rural poor or create useful rural infrastructure for community. The 2 percent of JRY funds was earmarked for Million Wells Scheme (MWS). The objective of MWS was to provide open wells free of cost to poor SC/ST farmers having category of marginal and small farmers and free bonded labourers. The Employment Assurance Scheme (EAS) was launched on 2 nd October, It was launched in 1975 identified backward blocks of the country situated in drought prone, desert and hill areas. Subsequently, EAS was extended to additional blocks which were newly included in Drought Prone Area Programme (DPAP), Desert Development Programme (DDP), Modified Area Development Approach (MADA) and blocks in flood prone areas of UP, Bihar, Assam and J & K. In addition, 722 non-eas blocks covered under second stream of JRY were also brought under EAS. The main objective of the EAS was to provide about 1 days of assured casual manual employment during lean agricultural season at statutory minimum wage rate to all persons of 18-6 years who needs employment on economically 3

15 productive and labour intensive community works. On account of number of deficiencies in planning and implementation, the basic objectives of JRY and EAS were eroded severely. Therefore, government merged the EAS and JRY and new programme Jawahar Gram Samriddhi Yojana (JGSY) came into effect from and it was made a rural infrastructure programme. JGSY was least understood by the target groups and was found lacking in its goal oriented implementation. The violation of guidelines was also observed in its implementation. It performed poorly. Hence within a short time span, it was merged into a new scheme Sampoorna Grameen Rozgar Yojana (SGRY) (21-2). The objectives of SGRY were to create additional wage employment in rural areas, alongwith supply of foodgrains as part of wages to enhance food security, creation of durable community and economic assets and to develop infrastructure in rural areas. The several problems such as too low wages, use of migrant labour and machinery, use of contractors, non lifting of grains by some states, violation of guidelines etc. were observed in its implementation. The parliamentary committee found implementation and performance of SGRY as extremely poor. In most 15 backward districts, the National Food for Work Programme (NFFWP) was launched in 2-1 by MoRD, GoI. The wages under SGRY and NFFWP programmes were paid partly in cash and partly in the form of foodgrains valued at BPL rates. It was felt that there was an excess flow of foodgrains for the poor through the wage employment schemes. The programme SGRY and NFFWP, which covered the whole country, generated 748 million persondays in 22-3 and 912 million in The total persondays generated under SGRY + NFFWP programmes during 22-3 to 25-6 is shown below in Table 1.3. Table 1.3: Employment Generated By SGRY and NFFWP-22-3 to 25-6 Year Persondays generated under SGRY+ NFFWP (In millions) Source: MoRD, GoI, NREGA Act, These all wage employment programmes implemented by state governments with central assistance were self targeting and objective was to 4

16 provide an enhance livelihood security, especially for those dependent on casual manual labour. Based on the experience of these programmes, the National Rural Employment Guarantee Act (NREGA) was enacted to reinforce government commitment towards livelihood security in rural areas. The Act was notified on 7 th September, Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): Amidst great hype and hope, Indian parliament passed a revolutionary novel and unique Act i.e. National Rural Employment Guarantee Act (NREGA) in 25. The ongoing programmes of Sampoorn Grameen Rozgar Yojana (SGRY) and Na tional Food for Work Programme (NFFWP) were subsumed within NREGA. It is renamed on 2 nd October 29, as Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). Ministry of Rural Development ( MoRD) is engaged in the implementation of MNREGA. It aims at arresting out-migration of rural households in search of employment and enhancing livelihood security of rural people s on a sustained basis by developing economic and social infrastructure in rural areas. In the past, all employment programmes in India targeted at the poor generally identified with aim of poverty alleviation. The MNREGA is the largest ever public employment programme visulised in human history and it goes beyond poverty alleviation and recognizes employment as a legal right. This legal commitment is a landmark event in the history of poverty alleviation strategies of India. It is also unique welfare programme in the world, as no country in the world has ever given a legal right of this kind to such a large population. This legal right implies that the constraint of fixed budget allocation will no longer effect the employment attendant entitlement. MNREGA guarantees at least 1 days of wage employment in every financial year to rural households whose adult members are willing to do unskilled manual work in the rural areas. The Act came in force on 2 nd February 26, in 2 backward districts of the country. From 1 st April 27, it was extended to 13 more districts. The Act has been extended to all the remaining 266 districts (barring urban districts) with effect from 1 st April 28. 5

17 As discussed above, this act is expected to address the worst kind of poverty in the country, as it will provide unskilled wage work to the poor at the bottom who have very low risk bearing capacity and poor credit worthiness to take up self employment ventures and have strong preference for wage work. By guaranteeing them wage work at minimum wages, the act can create significant impact on their livelihood, out-migration and food security aspects on one hand and reduction in the multiples vulnerability on the other hand. The most novel feature of MNREGA is the complete ban on the use of contractor and machines and provision of unemployment allowances (if employment not provided within 15 days). It ensures grass-root level participation of every rural citizen through democratic process, multi-layered transparent social audit, participatory planning, monitoring and implementation at village level etc. MNREGA is not a welfare programme dishing out doles. It is a development initiative chipping in with crucial public investment for creation of durable productive assets which give momentum to growth process, arrest rural-urban migration and empower rural women in backward areas of rural India. It focuses on village level planning of works and mechanism of social audit. The scheme is implemented through collaborative partnership right from Gram Sabhas to Central Government. Community participation by way of (i) Gram Sabha (ii) Local vigilance & monitoring committees and (iii) Self Help Groups (SHGs) and ensures active role by Civil Society Organizations. At official level, the scheme was embedded with inbuilt monitoring & evaluation mechanism at every layer of implementation including online monitoring through Monitoring and Information System (MIS). All these features of MNREGA signal the inauguration of a wholly new chapter in rural governance in India Features of the MNREGA: The main salient features and key processes in the implementation of MNREGA are summarized below: a) Adult members of a rural household may apply for employment if they are willing to do unskilled manual work. 6

18 b) Such a household will have to apply for registration to the local Gram Panchayat (GP) in writing or orally. c) The Gram Panchayat after due verification will issue a Job Card to the household as a whole. The Job Card will bear the photograph of all adult members of the household willing to work under MNREGA. The Job Card with photograph is free of cost. d) A Job Card holding household may submit a written application for employment to the gram Panchayat or programme officer stating the time and duration for which work is sought. The minimum days of employment have to be fifteen. e) The Gram Panchayat will issue a dated receipt of the written application for employment against which the guarantee providing employment within 15 days. f) Employment will be given within the 15 days of application for work by an employment seeker. g) If employment is not provided within 15 days, daily unemployment allowance, in cash has to be paid. Liability of payment of unemployment allowance is of the States. h) At least one-third of person to whom work is allotted have to be women. i) Wages are to be paid according to minimum wages as prescribed under 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.6/ per day. j) Generally disbursement of wages has to be done on weekly basis and it should not be beyond a fortnight. k) Panchayat Raj Institutions (PRIs) have a principal role in planning, implementation and monitoring. The Gram Sabha must monitor the execution of projects and conduct social audit of all projects executed within its territorial jurisdiction. l) Each district has to prepare a shelf of projects. The works for providing employment are to be selected from the list of permissible works. The shelf of projects has to be prepared on the basis of priority assigned by 7

19 Gram Sabhas. The execution of at least 5 % of works has to be allotted to Gram Panchayats. m) The use of Contractors and labour displacing machinery is prohibited. n) The ratio of wage costs to material costs should be no less than the minimum norm of 6:4 stipulated in the Act. This ratio should be applied preferably at GP, Block and District level. State Government should devise a method for transparent procurement of materials to be used under MNREGA. o) Work should ordinarily be provided within 5 kms. radius of the village or else extra wages of 1% are payable. p) Work site facilities such as crèche, drinking water, rest shade, medical aid, child care etc. have to be provided. q) Social Audit has to be done by Gram Sabha. r) Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process. Complaints should be submitted to the programme officer and disposed of within 7 days of its receipt. s) All accounts and records relating to the scheme are to be made available to any person desirous of obtaining a copy of such records on demand and after paying a specified fee Permissible Works under MNREGA: The different categories of permissible works are as follows: i) Water conservation and water harvesting. ii) Drought proofing including afforestation and tree plantation iii) Irrigation canals including minor irrigation works iv) Provision of irrigation facility, plantation, horticulture, land development to land owned by households belonging to the SC/ST or to land of the beneficiaries of land reforms or to land of the beneficiaries under the Indira Awas Yojana/ BPL families. v) Renovation of traditional water bodies including de-silting of tanks vi) Land development 8

20 vii) Flood-control and protection works including drainage in waterlogged areas viii)rural connectivity to provide all weather access. The construction of roads may include culverts where necessary and within the village area may be taken up along with drain. Care should be taken not to take up roads included in the PMGSY network under MNREGA. No cement concrete roads should be taken up under MNREGA. Priority should be given to roads that give access to SC/ST habitations. ix) Any other work that may be notified by the Central Government in consultation with the State Government. x) The above list of permissible works represents the initial thrust areas. In some circumstances, locations or seasons, it may be difficult to guarantee employment within this initial list of permissible works. In such circumstances, the State Governments may make use of section 1(ix) of schedule I, whereby new categories of work may be added to the list on the basis of consultations between the State Governments and the Central Government. xi) The maintenance of assets created under the scheme (including protection of afforested land) will be considered as permissible work under MNREGA. The same applies to the maintenance of assets created under other programmes but belonging to the sectors of works approved in Schedule I of the Act. xii) MNREGA resources should not be used for land acquisition. Land belonging to small and marginal farmers or SC/ST landowners cannot be acquired or donated for works under the programme Funding Procedure of MNREGA: A) The central government bears the costs on the following items. a) The entire cost of wages of unskilled manual workers. b) 75% of the cost of material, wages of skilled and semi skilled workers. c) Administrative expenses as may be determined by the central government, which will include interalia, the salary and the 9

21 allowances of the programme officer and his supporting staff work site facilities. d) Expenses of the National Employment Guarantee Council. B) The State Government bears the costs on the following items: a) 25% of the cost of material, wages of skilled and semi skilled workers. b) Unemployment allowance payable in case the State Government cannot provide wage employment on time. c) Administrative expenses of the State Employment Guarantee Council (SEGC). Each district has dedicated account for MNREGA funds. They have to submit their proposals based on clearly delineated guidelines so that funds may be distributed efficiently at each level and adequate funds may be available accordingly respond to demand. Under MNREGA, fund release is based on an appraisal of both financial and physical indicators of outcomes MNREGA Goals: Strong social safety net for the vulnerable groups by providing a fall-back employment sources when others employment alternatives are scarce, inadequate or nil. a) Growth engine for sustainable development of an agricultural economy, through the process of providing employment on works that address causes of chronic poverty such as drought, deforestation and soil erosion. The Act seeks to strengthen the natural resources base of rural livelihood and create durable assets which have potential to generate additional employment in the years to come in rural areas. Effectively implemented, MNREGA has the potential to transform the geography of rural poverty. b) To provide employment to rural poor through the process of a right based law. c) New ways of doing business, as a model of governance reforms anchored on the principle of transparency and grass root democracy. 1

22 1.3.5 Total Employment Generated and Expenditure under MNREGA in India during 26-21: Table 1.4 given below provide details relating to amount spent under MNREGA, employment generated, number of works taken and completed under MNREGA. For the country as a whole, in the year 26-7, Rs crore was spent against the budget outlay of Rs.113 crore and employment of 9.5 crore persondays were generated. Employment was provided to 2.1 crore households. A total of 8.35 lakh works were taken up of which 3.97 lakh were completed. During 27-8, against the fund availability of Rs crore, an amount spent was Rs crore. It generated crore person Table 1.4: Total Employment Generated and Expenditure under MNREGA in India-26-7 to Year Funds Total Availability Expenditure Employment Number of works (Rs. crore) (Rs. crore) Taken (Lakh) Completed (Lakh) No. of HHs. (Crore) Person days (Crore) Source: Downloaded on 3 rd August, 21. days of employment covering 3.39 crore households. In year 28-9, against total availability of Rs crore, expenditure incurred was of Rs crore. It generated crore person days of employment covering 4.51 crore households. Total works taken up were lakh of which lakh works completed. In 29-1, total amount spent was Rs crore and it generated crore person days of employment covering 5.26 crore households. A total of 46.3 lakh works were taken up of which 2.97 lakh works were completed. Upto end of 29-1, it provided crore person days of employment to crore households by spending Rs crore. The huge spending indicates the gigantic size of programme. 11

23 1.4 Review of literature On MNREGA: A number of researchers, various institutions and NGOs conducted studies which looked into the impact of MNREGA on various aspects such as employment generation, alleviation of poverty, food security, out-migration overall rural development and issues/deficiencies of implementation. Of these, some studies found visible positive impact of MNREGA on income, curtailing out-migration and ensuring food-security. Some studies reported concern over several issues such as corruption, system defects, monitoring, social audit and way of implementation of the Act. The main findings of some important studies are discussed below. The study MNREGA Opportunities and Challenges 1 (28) conducted by CSE, New Delhi found that MNREGA intervention has not been able to generate the kind of employment demand as expected. Irrational wage calculation formula has made productive assets creation less lucrative to local communities. The MNREGA transformed a labour surplus economy to a labour using economy. There is excitement over its state of implementation whenever local communities have been able to use MNREGA for development with direct impact on their livelihoods and disappointment whenever local bureaucracy is calling the shot in MNREGA implementation. The study conducted by IAMR, New Delhi 2 (28) found that MNREGA had noticeable impact on arresting out migration. To some extent, it impacted positively on income, purchasing capacity and food-security and ownership of milk animals. Many job card holders neither get employment within stipulated period of 15 days nor get any unemployment allowance. Varsha Joshi and Surjit Singh, IDS, Jaipur 3 conducted evaluation study in Rajasthan. They observed that after MNREGA s intervention, the migration certainly decreased but not completely stopped. MNREGA augmented the purchasing power of family, offer better road connectivity to villages, helping in declining debt (marginally), increased agricultural production and thereby farm income. The study conducted by P.Ambasta, Vijay Shankar and Mihir Shah 4 (28) reveals that department is facing an acute shortage of manpower at the district, taluka and village levels which affecting the effective implementation of MNREGA. Most of the appointments are on contract basis. 12

24 Many posts are vacant. Non appointment of a full time dedicated PO, who is pivotal to the successful implementations of MNREGA and giving the additional charge of PO to BDO/TDO s, who were responsible for implementation of other many developmental schemes at the block level strikes at the root of the effective implementation and monitoring. Further, it appears that the existing bureaucratic machinery is just not willing to play ball with the strict provisions of MNREGA and are at time actively sabotaging its implementation. Understaffing, lack of professionals, delay in administration etc. are other factors which affecting the effective implementation of MNREGA. The study conducted by Jaswal (IIM, Ahmedabad) and Ms. Paulomee Mistry (Disha, A bad) 5 found that there had been impact of MNREGA on the wages of Non-MNREGA works. The different ways of measuring the same work led to differing wage payment across villages. Job-cards often kept by Sarpanch or Talati and hence participants do not have direct information about their wage. Ruhi Tewari conducted study in Bhilwara district of Rajasthan. She found positive impact of MNREGA on economic lives of the rural poor and consequently it reduced the scale of out-migration. CAG report on MNREGA 6 (27) noted that the lack of administrative and technical manpower at block and GP levels was the main deficiency and needs immediate rectification. It adversely affected the preparation of plans, scrutiny, approval, monitoring, measurement of works and maintenance of the stipulated records at block and GP levels. The quality of works undertaken was found uniformly poor. Only 3.2 percent of registered households have been provided work for 1 days. The process of social audits is unfortunately yet to be adopted with enthusiasm. The report also indicts state governments for effectively scuttling the payment of unemployment allowances. In Mid Term Appraisal (MTA) of the 11 th FYP 7, the planning commission has found that only 14% of worker households have completed 1 days of work as mandated under the Act. It was observed that Gujarat and Kerala were able to provide average 22 days of work per households whereas W.B and Bihar provided 26 days of employment. These four states have the poorest record of fund utilization of MNREGA. In the absence of full time dedicated technical staff for programme execution, only 39 percent of 13

25 works taken under MNREGA were completed. There were instances both of elite capture of job cards, fake muster rolls resulting in leakages of vested interest. MTA also pointed out that workers had to travel long distance to withdraw their wages deposited in banks. MTA suggested states to promote social audits of MNREGA works to plug leakages and if possible arrangement of home delivery of wages by bank/ post office. The probe panel formed by MoRD, GoI, headed by Amita Sharma, joint secretary in-charge of MNREGA in the ministry 8, found that funds of MNREGA was diverted by Gujarat State Government to the Department of Forest for their own works. The panel also found general delay of 3 to 6 months in wage payment to MNREGA beneficiaries. In some Gram Panchayats workers were asked to pay Rs.5 for the photo-graph. In many cases, Sarpanch or Talati are the custodians of the job cards rather than workers. In many job cards, entries of work allocations and payment made were lacking. In his research paper Vanik Anish 9 found that employment generation in Hazaribagh (Jharkhand) has been quite low. There were delays of 4 to 5 days in wage payment. Hence, workers choose to leave MNREGA worksites for immediate payment when alternative employment available. No new works were taken up in the summer when work is most needed. As per Reetika Khera and Nayak, 1 large interstate variations in the participation of women have been observed. Women constitute more than two thirds of MNREGA workers in Kerala (71%), Rajasthan (69%) and Tamilnadu (82%) and less than stipulated one-third in Assam (31%), Bihar (27%), W.B (17%), UP (15%), Himachal Pradesh (3%) and Jarkhand (27 %). They also show that the full potential of this Act is far from being realized. Two thirds of the female respondents reported having to face less hunger as a result of MNREGA employment. Overall, MNREGA was considered very important by 68 % of the respondents. At majority worksites childcare facilities were lacking. MNREGA allowed workers to get work in their village, as a result of which scale of migration and hazardous works now reduced for many. The investigation carried out in 3 blocks of Mayurbhans district of Orissa 11 found pre-absence of muster roll at worksites, fake names or inflated entries in muster suggesting siphoning of funds by middleman. Contractors 14

26 who were banned in MNREGA were found at nearly half worksites. In some places, instead of account payee cheques, bearer s cheques were issued. The article by Hiral Dave 12 reveals large scale duplication of job cards in kotda village of kutiyana block of porbandar district of Gujarat. The number of job cards issued there is atleast three times of the total number of voters. The persons who died atleast two years ago are the holder of job cards and payment has been made to them. A family having 1 members has no less than 2 cards issued on his family members names. The number of NGOs and individuals conducted studies which looked into implementation, functioning and impact aspects of MNREGA. Of these some studies found visible positive impact of MNREGA on employment, outmigration and food-security of rural poor households. It also impacted the agricultural and non-agricultural wage rate. Some studies found insignificant or marginal impact on halting out-migration and providing food-security owing to no assurance of providing employment throughout the lean period. Many studies observed lack of active involvement of village communities in planning development works for MNREGA. Many GP were found executing development works which were planned by block/ district level authority. Job cards were issued on ration-card basis, non-payment of unemployment allowances, wrong fake entries in muster rolls, issue of fake job cards, intentionally errors in wage calculation, delay in wage payment, use of JCB and other machines for excavation and other purposes etc. were the irregularities observed in these studies. To sum up, mix bag of opinions were reported on impact, effectiveness, implementation and monitoring of MNREGA. 1.5 Need of the Study: As stated earlier, MNREGA is a flagship programme of government of India which is unique and first of its kind. It is in implementation in all the districts (barring urban) of the country since April, 28. The numbers of studies were taken up by NGOs, researchers, institutions etc. which looked into the impact of MNREGA on different parameters and also examined its number of implementation issues. Some studies found substantial positive impact of MNREGA on wage rate, food security, migration whereas some studies reported minimum and delayed wage payment, non-payment of 15

27 unemployment allowances, failure in halting migration, errors in wagecalculation, number of operational bottlenecks, corruption etc. The most of the studies were centered on systemic defects rather than probing the impact on beneficiaries. Thus, mix bag of opinions were reported for level of impact and functioning of MNREGA. At present, degree of impact, implementation procedure, Irregularities and corruption of MNREGA 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 MNREGA 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 / district to Gram Panchayat. Also there are issues such as non-homogeneity in its effectiveness, region specific disparities and outcomes etc. Keeping this controversy, debate and background in view, an absolute necessity is felt by government to have a fresh look toward various aspects of functioning and impact assessment of MNREGA by conducting an empirical study. With this in view, the Directorate of Economics and Statistics, Ministry of Agriculture, GoI asked Agro- Economic Research Centre, Vallabh Vidyanagar, Gujarat, to undertake study probing the impact of MNREGA on different parameters and implementation constraints affecting the effectiveness of the programme for Gujarat state. This study is intended to assess the overall scenario i.e., the pros and cons associated with MNREGA scheme, the operational bottlenecks, the efficiency of social audit and its impact on the targeted beneficiaries. This common study is to be conducted in 18 states and it is to be co-ordinated by ISEC, Bangalore. 1.6 Objectives of the Study: The following are the specific objectives of the study. 1. Measure the extent of manpower employment generated under MNREGA, their various socio-economic characteristics and gender variability in all the districts implementing MNREGA since its inception in the selected states. 2. To compare wage differentials between MNREGA activities and other wage employment activities. 16

28 3. Effect of MNREGA on the pattern of migration from rural to urban areas. 4. To find out the nature of assets created under MNREGA and their durability. 5. Identification of factors determining the participation of people in MNREGA scheme and whether MNREGA has been successful in ensuring better food security to the beneficiaries. 6. To assess the implementation of MNREGA, it s functioning and to suggest suitable policy measures to further strengthen the programme. 1.7 Sampling Design: 1.7.1: Selection of Sample Districts: The MNREGA was implemented in Gujarat state in three phases: I phase: February-26- Implemented in 6 districts of the state. II phase: April-27- Implemented in 3 districts of the state. III phase: April-28- Implemented in 17 Districts of the state. The selection of sample districts was carried out by project co-ordinator. In order to fulfill the objectives of the study and to reflect the region specific variations, project co-ordinator selected 5 districts, one each from the North, South, East, West and Central location of the state. While selecting the districts, utmost care was taken to give proper representation to all the three phases of MNREGA implementation. The list of selected districts alongwith phase and direction is shown in Table-1.5. Table 1.5: Details of Selected Sample Districts and Sample Villages. Sr. No. Selected District Block Village Impleme ntation Phase (Year) Direction Distance from District H.Q. (kms.) Banaskantha Palanpur Chitrasani I 1 North Vadgam Navovas (26) 16 2 Dahod Limkheda Mangalmahudi I 22 East Dahod Agawada (26) 16 3 Navsari Gandevi Movasa II 25 South Jalalpore Erroo (27) 6 4 Jamnagar Jamnagar Changaa III 14 West Jodia Jodia (28) 2 5 Surendranagar Dhrangadhra Khambhana III 23 Central Wadhvan Chamaraj (28) 8 17