International Journal of Economics,

Commerce and Research (IJECR)

ISSN(P): 2250-0006; ISSN(E): 2319-4472
Vol. 6, Issue 3, Jun 2016, 1- 6
TJPRC Pvt. Ltd

THE IMPACT OF MGNREGS ON THE ECONOMIC

DEVELOPMENT OF RURAL PEOPLE
P GISHA1, & BASSAM K2
1

Assistant Professorsree Narayana Guru College, KG Chavadi, Coimbatore, Tamil Nadu, India
2

Research Scholarsree Narayana Guru College, KG Chavadi, Coimbatore, Tamil Nadu, India

ABSTRACT
Rural development can be possible through the eradication of rural unemployment as large chunk of the rural
folk has been under disguised employment. With this background, Government of India thought that providing
employment opportunities to rural poor would result in improving the living conditions of the rural poor which will pave
the way for rural development. With this intention, Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA) was enacted by legislation on August 25, 2005 for providing employment for rural poor. This Act gives
legal guarantee of at least one hundred days of wage employment in a financial year to a rural household. This research
paper highlighted the income and savings of MGNREGS workers and impact of this scheme on their income and saving
and measure whether MGNREGS enhance livelihood security in rural areas.

Original Article

KEYWORDS: Disguised Employment, Employment Opportunities, Wage Employment in a Financial Year

Received: Mar 22, 2016; Accepted: Apr 12, 2016; Published: Apr 17, 2016; Paper Id.: IJECRJUN20161

INTRODUCTION
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGS) is considered as a silver
bullet for eradicating rural poverty and unemployment, by way of generating demand for productive labor force
in villages. MGNREGS Act 2005 guarantees 100 days of employment in a financial year to any household whose
adult members are willing to do unskilled manual work. The Act has come into force with effect from February
2006 in 200 districts initially and latter on extended to all the rural districts of India from the financial year 20082009. It is the most significant Act in the history of Indian polity in many ways like grassroots participation of
Indian citizen and beneficiary trough demographic process, multilayered social audit and transparency mechanism
by involvement of civil society, comprehensive planning at village level towards sustainable and equitable
development etc..The study is intended to assess the income and savings of MGNREGS workers and impact of
this scheme on their income and saving and measure whether MGNREGS enhance livelihood security in rural
areas.
Objectives of the Study
The objectives of the study are

To analyze the income of MGNREGS workers and impact of this scheme on their income.

To find out the saving pattern of MGNREGS employees and impact of this scheme on their savings.

To measure whether MGNREGS enhance livelihood security in rural areas.

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P Gisha & Bassam K

Hypothesis
H: There is no significant difference between the saving before and afar joining to MGNREG scheme
H: The saving before and after joining of MGNREGS is different
H: The annual income of employees and joining on NREGES are independent
H: The annual income of employees and joining on NREGES are dependent
Research Methodology
Sampling technique followed for the study is random sampling and convenience sampling. 100 workers were
selected from 5 Wards in NediyiruppuPanjayath in Malappuram district Kerala, India. A set of structured questionnaire
was used for primary data collection have been processed and analysed by employing appropriate statistical tools
likeWeighted average, Chi-square, F-test, percentage etc. Secondary data were collected from newspapers, journals and
from MGNREG website.
Classificatory Variables
Table 1: Profile of the Respondents
Demographic Factors
Gender

Age

Marital status

Religion

Caste

Educational status

Variables
Male
Female
18-28
28-38
38-48
48-58
58 Above
Married
Unmarried
Widower
Divorced
Islam
Hindu
Christian
others
General
SC
ST
OBC
Illiterate
Lower primary
Upper primary
SSLC
Plus two
Degree and above

Number of Respondents
25
75
05
12
41
33
09
65
08
22
05
40
58
01
01
11
48
06
35
13
20
41
20
06
00

Percentage Rates (%)

25
75
05
12
41
33
09
65
08
22
05
40
58
01
01
11
48
06
35
13
20
41
20
06
00

Table 2: Main Income Source Before and after Joining Mgnrgs

Source
Agriculture
Salary
Constructions
Business
Impact Factor (JCC): 4.5976

Before Joining to
MGNREGS
48 (48)
05 (05)
37 (37)
04 (04)

After Joining to
MGNREGS
48 (48)
05 (05)
37 (37)
04 (04)
Index Copernicus Value (ICV): 6.1

The Impact of MGNREGS on the Economic Development of Rural People

Others
MGNREGS

06 (06)

04 (04)
02 (02)

Main income source before and after joining MGNRGS is shown in table 1.2. The study found that there is an
only 2 % family main income source is MGNREG. While it found that even after joining to MGNREG, the important
source of family is agriculture and construction works.
Table 3: Knowledge Levels on Various Provisions of Mgnregs
100 Days of Employment per households
Equal wage for men and women
Right to payment within a fortnight
Work within a radius of 5 KM
Role of GramaSabha
Eligibility for unemployment allowance
Medical assistance for injury in the worksite

Yes
100
88
42
53
75
35
39

No
12
58
47
25
65
61

The active participation and proper utilization of the scheme largely depends upon the knowledge levels of the
respondents on various provisions of the MGNREGS. It is evident from the chart among the respondents 100% are aware
about provision of hundred days of employment for household. But most of them do not know their right to get payment
within a fortnight and eligibility for unemployment allowance.
Table 4: Weighted Average Table for the Ranking of Facilities According to Satisfaction Level at Work Site
Facilities
First -aid
Weighted total
Shade
Weighted total
Drinkingwater
Weighted total
Child care
Weighted total
Safety equipment
Weighted Total

5
38
190
10
50
40
200
12
60
37
185

Number of Respondents
4
3
2
20
23
10
80
69
20
12
17
27
48
51
54
26
23
10
104
69
20
20
20
21
80
660
42
20
21
14
80
63
28

1
09
09
34
34
01
01
27
27
08
08

Total
100
368
100
237
100
394
300
869
100
364

Weighted
Average

Rank

3.68

II

2037

3.94

2.89

IV

3.64

III

5- Highly dissatisfied, 4-satisfied, 3moderate, 2-dissatisfied, 1-highly satisfied

The Table 4 shows the ranking of the facilities provide at work site according to the satisfaction level of the
respondents. According to this study ranks of the facilities are 1.Drinking water, 2.first aid, 3. Safety equipment, 4.Child
care and 5.Shade facilities.
Table 6: annual Income Before And After Joining Mgnregs
Income
Below 5000
5,000-10,000
10,000-15,000
15,000-20,000
Above 20,000

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Before
MGNREGS
13
59
24
02
02

After
MGNREGS
60
60
27
05
02

Total
19
119
51
07
04
200

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P Gisha & Bassam K

H: The annual income of employees and joining on NREGES are independent

H: The annual income of employees and joining on NREGES are dependent
x = (O E) E
Calculated value+ 4.049
Degree of freedom: (c-1)(r-1) = (2-1)*(5-!)=4
Let us take 5% as level of significance
Table value =9.488
Here calculated value (4.049) is less than the table value (9.488). so we accept null hypothesis and reject
alternative hypothesis. There for there is no relationship between the annual income and joining on MGNREGS.
Table 7: Monthly Savings of Employees
Savings
Below 500
500-1000
1000-1500
1500-2000
Above 2000

Before MGNREGS
20
21
29
22
08
100

After MGNREGS
10
11
33
24
22
100

H: there is no significant difference between the saving before and afar joining to MGNREG scheme
H: the saving before and after joining of MGNREGS is different
Table 8: Table of F Test
X
20
21
29
22
08
100

400
441
841
484
64
2230

Y
10
11
33
24
22
100

100
121
1089
576
484
2370

F=n s /n -1n s /n -1
: 5, n : 5
: X /n-( X/n) = 46
: Y /n-( Y/n) =74
Calculated value F =0.621
Degree of freedom: (n-1,n-2)=(4,4)
Level of significance: 5%
Table value 6.39
Calculated value of F + 0.621 is less than the table value. So we accept the null hypothesis that there is no
Impact Factor (JCC): 4.5976

Index Copernicus Value (ICV): 6.1

The Impact of MGNREGS on the Economic Development of Rural People

significance variance between the employees savings. The savings of the employees before and after joining to the
MGNREG scheme are equal.

FINDINGS

The study reveals that there is no relation between the annual income and status of joining the MGNREGS. There
is no affect of MGNREGS on the annual income of the employees.

In case of saving of employees, there is no variance between before and after joining the MGNREGS, both are
stable more over equal.

The main income source of the family before enter into MGNREGS was Agriculture for 48%families and the
construction workers for 38 % families. While there is no impact of MGNREGS on this subject, because after
entering to this scheme only 6% families are under MGNREG income as main source.

In case of monthly expenses, expense before joining and after joining into MGNREGS are more over same, no
significant difference between them.

There are 70% employees are make savings out of MGNREGS income

The study reveals that the employees are more satisfied with the drinking water facilities from which the services
provided at work site under the Act

CONCLUSIONS
MGNREGS is a path-breaking legislation with the main objective of providing legal grantee to all the rural
households to have secured access to employment opportunities. Employment now, is a legal entitlement to rural
households. Started in the year 2006, the scheme has been in operation in all the states. The outcome of the scheme is quite
encouraging as it has started yielding dividends in terms of improved wages, improved income and marginal improvement
in living standards and so on. The benefits of the scheme as perceived by the respondents to the rural households are
guaranteed employment, improved income and better education to children. Benefits to the community include better
networks of roads, improved irrigation facilities etc..
REFERENCES
1.

Dr. Suman Pamecha , Indu Sharma (2015) Socio-Economic Impact of MGNREGA - A Study Undertaken among
Beneficiaries of 20 Villages of Dungarpur District of Rajasthan, International Journal of Scientific and Research
Publications, Volume 5, Issue 1, January.

2.

All-India Report on Evaluation of NREGA A Survey of Twenty Districts, by Institute of Applied Manpower Research,
(PEO) , Planning Commission.

3.

Shah Mihir, Shanker V. and Ambasta P. (2008). Two years of NREGA: The Road Ahed, Economic Political Weekly,
Feb.23

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