Evaluation the Implementation Mechanisms and Performance of Mahatma

Gandhi National Rural Employment Guranttee Programme (MGNREGP):

A Comparative Study of Haryana and Rajasthan
Introduction:

India faced a major foreign exchange crisis in 1991. As a result of which the Indian
government was forced to accede to the adoption of Neo-Liberal policies. The adoption of NeoLiberal or LPG policies especially SAP (Structural Adjustment Programme) led to India reduced
its emphasis on its welfare based and socialistic policies that it had adopted after independence.
Further, the adoption of the Trade Related Investment Measures (TRIMS) made Indian economy
more and more dependent on foreign capital. This depicts a gradual shift in economic spending
from agricultural and social sector to the industrial/private sector, thus entailing a huge reduction
in investment or expenditure by the nation in the public sector. This shift or movement of
economic spending from public to private sector led to a competition in the labour market,
rendering them vulnerable and accessible as cheap labour for the market to use them as per its
own terms and conditions, leading to the great disparity in the earning of the skilled and
unskilled worker. As a resultant of this competition real wage goes down. Due to this in the
nineties India started experiencing the phenomenon of Hunger amidst plenty. The poor
implementation of land reforms deteriorated the condition more. Collectively, all these above
mentioned factors ruined the traditional employment sector (agriculture per say) of India. The
share of agriculture in GDP was declining persistently, despite this agriculture continued to
employ the largest proportion of work force. Due to the low wage rate the surplus labour accede
to migrate outward i.e., rural areas to urban areas. Thus, the traditional employment sector is now
being replaced by a new form of employment, the term being referred to as the informal sector.
India is hailed as one of the fastest growing economies in the world. But, Indias 72%
population living in 630000 (Census 2001) villages where poverty ratio is 28.3% (NSSO 61st
round survey) and the unemployment estimates on the basis of Usual Principal Status (UPS),
Current Weekly Status (CWS), Current Daily Status (CDS) are 2.5%, 3.9% and 8.2%
respectively, as percent of total labor force (NSSO 61 st round survey). In the rural India 47.26%
1

population are illiterate (NSSO 61st round survey). The lack of opportunities for employment in
traditional sector comes about as a resultant of all the forces that have been discussed above. In
such a scenario, despite conservative neo-liberal policies only the inclusive growth approach
may help the government in reducing the poverty ratio and unemployment rate. The MGNREGA
is the result of thinking that focuses upon inclusive growth approach (Gupta A., 2010).

Thus, in 2005 MNREGA was brought in by the then UPA government to solve the ever
increasing effects brought about in the labour market by the adoption of the market based
capitalistic policies. MNREGA is a landmark legislation that has been made as; it is a step
towards the realization of wage employment as a right, providing a right to work and thus a right
to life with dignity. It is a comprehensive plan for employing millions of rural unskilled labour
force. Thus, for the first time, rural communities have been given not just a development
programme, but also a regime of rights. The security of the additional income to the rural
workers provided by the MNREGA will strengthen their bargaining power, which in turn will
make it possible to raise the urban floor-wage of unskilled workers.
The idea of an employment gurantee or the government as an last resort (ELR) has been
used by many governments in different forms starting with the Poor Employment Act of 1817 in
Britain, New Deal Programmes in USA in the 1930s, Argentinas Plan Jefes y Jefas, Moroccos
Promotion Nationale (since 1961). During the last few decades government intervention in the
labour market as an employer of the last resort has become an integral part of labour market
policies in many developing countries. Recent examples of the latter include public work
programmes in India, Bangladesh, Pakistan, Philippines, Egypt, Botswana, Kenya and Chile
(subbarao, K. 1997; Lipton, M. 1996).
In India, firstly, Mr. V. C. Page, the Chair of the Maharashtra State Legislative Council,
and a social activist, launched the Employment Guarantee Scheme (EGS) experimentally in
1965. It was subsequently expanded, in part precipitated by an extended drought in 1971 and the
need for widespread employment relief. This culminated in the EGS Act and its implementation
in Maharashtra in 1979. From a modest beginning, the EGS expanded rapidly into the most
important poverty alleviation programme in Maharashtra. In 1997, the EGS generated a total of
90 million person-days of employment, while expenditure amounted to Rs. 247 million
2

(approximately US$7 million). As of 2003/04, expenditure on the EGS as a share of total

development expenditure was a little over 4 per cent (GOM, 2005) (Policy Brief 6, 2006). After
the success of EGS the National Rural Employment Guarantee scheme into force in 2006. It is
the first nation-wide employment scheme rolled out in the world that provides a statutory basis
for demanding employment to a rural Indian. The Act provides a guarantee for rural employment
to households whose adult members volunteer to do un-skilled manual work not less than 100
days of such work in a financial year in accordance with the scheme made under the Act.
MGNREGS, was launched on February 2, 2006, in 200 most backward districts in the first
phase, was expanded to 330 districts in the second phase during 2007-08. The remaining 266
districts were notified on September 28, 2008, and the scheme has now been extended to all the
districts of the country. On October 2, 2009 it is renamed as Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA) named after Gandhi ji (MNREGA Act, 2005).
The immediate objective of NREGA is to overcome deprivations faced by households by
providing them work at guaranteed wage rates, the larger objective of the act was to address the
social and power relations in the society. NREGA absorbs around 4.51 crores of rural unskilled
wage labour, wherein the male labour force constitutes around 52% and women around 48% for
the Financial Year (FY) 2008-09 (MNREGA, Report to the people, 2006-10)

1.1

Main Features of the Scheme:

The MGNREGA scheme is different from the earlier wage employment programs in

different ways. According to NREGA Act 2005, special features of the scheme are:
1.

It provides legal guarantee of 100 days work to every rural house hold whose
adult member volunteer to do un-skilled manual work.

2.

If an applicant is not provided employment within 15 days he / she shall be

entitled to unemployment allowance.

3.

Rural Employment Guarantee Scheme is demand driven which is different

from the earlier employment generating programme which were supply driven.

1.2

Aims and Objectives of the scheme:

The objective of the Act is to create durable assets and strengthen the livelihood resource

base of the rural poor. The choice of works suggested in the Act addresses causes of chronic
poverty like drought, deforestation and soil erosion, so that the process of employment
generation is maintained on a sustainable basis 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, and soil erosion and flood control, and
construction of roads and institutional facilities. The focus of the scheme shall be on the following
works in their order of priority:1. Water conservation and water harvesting.
2. Drought proofing (including afforestration and tree plantation).
3. Irrigation canals including micro and minor irrigation works.
4. Provision of irrigation facility to land owned by households belonging to the scheduled
Castes/Schedule Tribes or to land of beneficiaries of land reforms or that of the
beneficiaries under the IAY of Government of India.
5. Renovation of traditional water bodies including desalting of tanks.
6. Land Development
7. Flood control and protection works including drainage in water logged areas.
8. Rural connectivity to provide all weather access and
9. Any other work which may be notified by the Central Government in consultation with
the State government.
Creation of durable assets and strengthening the livelihood resource base o f the rural poor shall
be an important object of the scheme. Further, the act provides the job opportunity to job seeker with
in 5 km. radius of the village or else extra wages of 10% are payable. A ratio of 60:40 for wages and
materials has to be maintained. Contractors and use of labour-displacing machinery is prohibited
(NREGA Act, 2005).

1.3 Performance of MGNREGA:

The performance of MGNREGP is judged by the employment generated under the scheme
and on the average number of person days created per household (Pankaj, K.A. 2008, PEO,
2008, CRRID, 2009). According to 2009-10 data, 11321361 job cards issued under the scheme.
Out of them 52900678 House Holds (HHS) have demanded employment, from them 52556646
HHS provided employment. Bihar issued the highest number of job cards i.e. 12403792 which
are approximately 15% of its total population. On the other hand Andhra Pradesh provided
highest number of employment under the scheme i.e. 7565147 which is 8.13% of its total
population. During 2009-10 total 28332.2 lakh person days generated under the scheme instead
of 21632.86 lakh in 2008-09. Rajasthan generated maximum number of person days during
2009-10 i.e. 4498.09 lakh (http://www.nrega.nic.in).

Review of Literature:
Since the implementation of MGNREGA in India several works carried out to check out
the implementation process and impact assessment of the scheme on various socio-economic
development indicators and women employment also, such as
Pankaj, K.A. 2008 measured the implementation of NREGA in term of institutional
aspects such as PRIs, project staff, civil society organization, peoples participation and social
mobilization in Bihar and Jharkhand. Further, study measured the impact of NREGA on
employment, livelihood security, migration, local wages and labour market conditions,
community assets and rural infrastructure. The study concluded that people are unaware about
the detail of the scheme. The role of modern media and government officials are relatively
insignificant. The participation of people is very low because of unawareness.
However, the impact assessment report is quite positive from the Bihar and Jharkhand.
The study inferred that NREGA is well-targeting in both states in the sense of employment
generation. Most of the beneficiaries belonged to the most vulnerable and deserving section.
Further, study shows that income of the households increasing but not at the substantial level.
But it is important to know that beneficiaries are using this increased income for meeting their
basic necessities.
On the issue of community asset creation study states that a large number of assets
created in both states in 2007-08 and they are in immense use in the study area. But the quality of
5

the assets is very low due to insufficient technical supervision. Further, the selection of site for
the work and maintenance is another problem.
A Survey of 20 districts from throughout the India is conducted by Programme
Evaluation Organisation (PEO), Planning Commission 2008. The study inferred that people
are facing problems on issuance of job cards. One-tenth of the people revealed that ten percent
of the eligible adult members of the family are not included in the job card. The job card is in the
possession of Gram Panchayat (GP) officials in most of the districts of eastern region and only
during the season of works, the job cards are handed over to the beneficiaries for their
signature/thumb impression. Further, People are not getting job in the stipulated 15 days time
period. Neither they have got any unemployment allowance as stipulated in the act. The income
level of the households is increasing. Now they are shifting from the low earning level to
marginally higher income level. Beneficiaries distributed their income in both food and non-food
items.
Singh, S. P., Nauriyal, D. K., 2009 prepared a report for the IIT, Roorkee, based on the
three districts of the Uttarakhand. Study found that there is demand-side and supply-side
constraints in ensuring 100 days job guarantee. Supply-side constraints emanate from the lack of
interest on the part of Gram Pradhans and officials, inadequate and less-trained staff and lack of
effective participation of Gram Sabha. The demand-side limitations emanate from the lack of
awareness among workers. Field survey of the study reported that many of the workers did not
know that NREGS guarantees 100 days of employment to a rural household, as a matter of right,
thus, the Scheme is target-oriented and supply-driven, not demand driven as envisaged in the
Act. Study concluded that NREGS is not bringing any significant improvement in the income
and employment generation. Further, the study found a perceptible difference in the quality of
assets created in the sample districts. In the hill districts viz., Champawat and Tehri, the quality
and durability of the assets created under NREGS were found to be far superior to those in the
district of Haridwar.
A report Implementation of NREGA: The Rajesthan Experience (2009) Prepared
by Rural Development and Panchayati Raj Department, Government of Rajasthan
6

conclude that Rajasthan experiencing a great success in the implementation of scheme. Public
participation especially from the weaker and marginalized section is very high in Rajasthan.
Wage rates are improving in agricultural and other sector due to NREGA.
Khera, R. 2009; in his article Group Measurement of NREGA work: The Jalore
Experiment confirmed that implementation of NREGA in Rajasthan is very good but people
are not paid statutory minimum wages as stipulated in the act. The wage rate is very low in
Rajasthan.
A another study conducted by India Centre for Research in Rural and Industrial
Development, (CRRID) and sponsored United Nations Development Programme (UNDP),
India in 2009 in the three selected districts of Himachal Pardesh, Haryana and Punjab, inferred
that the all three states have a high proportion in the employment providing as per the demand of
the employment. But despite this, there is another fact, the demand of employment in sample
districts are very low. Moreover, from the household who demanded employment only a few
persons are getting one hundred day employment. The condition in district of Himachal pardesh
is better than the Haryana and Punjab. However, the study shows that the economic condition of
the wage earners has improved. Further, the study also shows contradictory result on women
empowerment. It was reported that two sample district of Haryana (i.e. Sirsa) and Punjab (i.e.
Hoshiarpur) shows improvement in womens condition due to participation in MNREGA.
However, the impact of MNREGA on women in one district of Himachal Pardesh (i.e. Sirmaur)
was not satisfactory.
Some of the above mentioned studies infer that NREGA is improving the condition of
rural poor including women and also creating good quality assets (Pankaj, A. K. 2008, CRRID,
2008, Khera R. 2009). But some have inferred it is not creating any significant differences
(Singh, S. P., Nauriyal, D. K., 2009, CRRID, 2008). But no study measured the changes in saving
pattern of the households. Further, no evidence was found about the impact of MNREGA on
women empowerment; however women are getting more income and equal wages due to
MNREGA.

Besides this, after reviewing the studies, it was found that there are significant differences
in the implication and performance of MNREGA among different states. For example, Haryana
is far behind in comparison to Rajasthan in terms of both implication and performance (CRRID,
2009, Khera R. 2009).
Therefore, keeping all these things in mind, the objective of the proposed study are as
follows:

Objectives
The main objectives of the study are:
1. To identify the efficient management practice, procedures, processes factors for better
performance in the implementation of NREGS in Haryana and Rajasthan and identify
inadequacies, if any, in the supply side and demand side.
2. To assess the impact of NREGA on various socio-economic development indicators,
such as livelihood security, employment and income generation and asset creation.
Further, the study will also try to assess the impact of scheme on consumption and
saving pattern of the households.
3. To know the role of NREGA in empowerment of women
4. To suggest measures to improve the efficiency and efficiency of the systems and
processes and ensure sustainable impact of the scheme on the peoples livelihood in
particular and overall development of rural economy in general.

Methodology:
1.

In the present proposed study to determine the effective implementation of

scheme demand side and supply side variables will be analyzed. In the demand side variables,
the awareness of the people and the peoples will for participating in the scheme will be
examined. On the other hand, in the supply variables, the role of Gram Panchayats (GPs) or
Panchayati Raj Institutions (PRIs) and other officials will be measured.

To analyze the peoples participation in the scheme study will focus on the some
important variables such as, landholdings and monthly per-capita consumption expenditure
adjusted after deducting the monthly per-capita income from NREGS, sex of head of the
household, household size, social group, religion, location proximity and political participation.
To analyze all these binary response model will be constructed. This is written as,
NREGSi = + 1landholdi + 2mpceiadj + 3rhhscorei + Xi + ei.(1)
Where, NREGSi = 1 if house hold i is participating in NREGS and 0 otherwise,
landholdi = Total land holding of the household i measured in acres,
mpceiadj = Adjusted monthly per-capita consumption expenditure ,
rhhscorei = 1 if the household is a BPL and 0 otherwise,
Xi = is vector of all other determinants of participation in NREGS including head of the
household, household size, social group, religion, location proximity and political participation
etc.
ei = is the random error term.
The impact of changes in the independent variables on the probability of NREGS
participation is estimated by assuming a standard normal distribution. The coefficient 1, 2, 3,
indicate the impact of a change in the corresponding independent variable on the probability
participating in NREGS. If coefficient 1 and 2<0 then participation in NREGS declines with
size of land holding and monthly per-capita income.
In the analysis of role of supply side in the effective implementation of NREGS the
efficiency of the implementing government institution should be measured. Here, efficiency of
the implementing government institutions in the sense, they are able to deliver a job and make a
subsequent wage payments within the statutory 15 day limit as outlined in the NREG Act-2005.
The main aim is to identify the time lag in terms of days between the date of start of work and
the date on which payment is made. To fulfill the role as a safety net it is expected that the
programme should deliver better coverage both in money and person-days during this period.
9

This examination should be possible by the taking responses from both official and beneficiaries
by the surveys and focus group discussions.
2.

To analyze the impact of NREGA on different socio-economic variables, simple

comparison between participants and non-participants will not be a useful empirical strategy as
economic outcome such as consumption expenditure, saving , income and employment (number
of days worked under NREGS) will be simultaneously determined. To account for the
simultaneous relation between household economic status and the number of days worked under
the NREGS Instrumental Variable (IV) estimation technique should be used. The basic idea is to
find variables which exert a strong influence on the number of days worked under the NREGS
scheme but which do not have a direct effect on outcome of interest, while the main challenges is
to find suitable instruments. I am still working on that model.
3.

To know NREGA role in the effective asset generation site surveys should be done.

Data source:
1. Primary data from the house hold surveys, work site visits, focus group discussions,
Interaction with officials.
2. Secondary date from the NREGA website and related government websites..

Refrences
1. Census 2001, www.censusindia.gov.in

10

2. Gupta, A. (2010), NREGA in uttar Pradesh: Some issues to address. Indian Institute of
Information
technology,
Allahabad.
../eSSResearchPapers/eSSWPArticle201032671922.doc
3. Khera, R. (2009), Group Measurement of NREGA work: The Jalore Experiments.
http://www.cdedse.org/pdf/work180.pdf
4. Lipton, M (1996), Success in Anti Poverty; Issues in Development, Discussion Paper 8,
International Labour Organisation, Geneva.
5. Mahatma Gandhi National Rural Employment Gurantee Act, 2005; Report to the people
(2nd Fab. 2006 2nd Fab. 2010), Ministry of Rural Development, Government of India.
6. National Rural Employment Guarantee Act, 2005, www.nrega.nic.in.
7. NSSO 61st round, www.mospi.nic.in
8. Pankaj, A. K. (2008), Process, Institutions and Machanisms of Implimentation of
NREGA: Impact Assessment of Bihar and Jharkhand. Institute for Human Development.
9. Policy Brief 6, (2006) The Maharashtra Employment gurantee Scheme, India. Overseas
Development Institute 2005, www.odi.org.uk/inter-regional_inequality
10. Programme Evaluation Organisation (PEO), Planning Commission, (2008) All India
Report on Evaluation of NREGA: A Survey of Twenty Districts. Institute of Applied
Manpower Research, Delhi.
11. Rural Development and Panchayati Raj Department, Government of Rajasthan (2009),
Implementation of NREGA: The Rajasthan Experience. Implementation of NREGA23.10.08.pdf
12. Singh, S. P., Nauriyal, D.K. (2009), System and Process Review of Impact Assessment of
NREGS in the State of Uttarakhnd. Districts: Tehri, Champawat, Haridwar. Month July
2009. Indian Institute of Technology Roorkee, Roorkee.
13. Subbarao, K. (1997), Public Works as an anti Poverty Programme: An overview of
Cross-Country Experience, American Journal of Agricultural Economics, Vol. 79, No. 2,
PP. 678-683.
14. UNDP (2009), Appraisal of impact assessment of NREGS in selected districts of
Himachal Pradesh, Punjab, Haryana. Districts: Hoshiarpur, Sirsa, Simaur, Period JulyAugust 2009. India Centre for Research in Rural and Industrial Development, (CRRID)
Chandigarh.

11