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perspective

NREG Two Years On: case of women, who are paid the same
rates as men under the NREG. Even though

Where Do We Go from Here? NREG rates are not time-based but piece-
rate wages, by and large those rates are
being paid – as awareness among workers
about their entitlement has risen. Second,
Santosh Mehrotra there is anecdotal evidence emerging with
workers saying they do not need to migrate

I
This article examines the f the National Rural Employment to other rural areas (for example, Bihari
performance of the National Guarantee (NREG) achieved two labourers saying they do not need to find
outcomes, it would have achieved its work in Punjab, which in turn will impact
Rural Employment Guarantee
objectives: first, provide work and thus, wages in Punjab over time).2 The decline
programme since its launch incomes for landless labour and marginal in migration – initially in cyclical and
in mid-2005. It first provides a farmers in the lean season for labour eventually in permanent migration – to
summary of progress in certain demand; second, create assets that raise urban areas will take the pressure of
land productivity and thus, contribute to congestion off already overwhelmed cities
areas and then highlights specific
the reversal of declines in agricultural [IHD 2006].
weaknesses. Finally, it describes yields. By definition, the second outcome We have a long history (of at least four
the challenges that lie ahead and would be a second-round effect; hence, decades in post-independence India) of
suggests how these can one should not even be expecting this wage employment programmes and
outcome in the first three to four years. As reviews of these programmes had shown
be overcome.
the capacity of their own farms to support the following perennial weaknesses:
their family incomes improves, marginal (i) low programme coverage; (ii) more
farmers will revert to working almost than 50 per cent beneficiaries not from
exclusively on their farms. They will no most needy group; (iii) bureaucracy
longer need to depend on public works – dominated planning; little participation of
although the demand for work from community in planning; (iv) work to
landless labourers may not fall. The NREG women lower than stipulated norm of 30
is unique in being a demand-driven per cent; (v) only 16-29 days employment
programme;1 if labour’s need for work provided to household; (vi) assets created
falls, the fiscal requirements of the not durable; and (vii) corruption: reports
programme will fall. While previous wage of false muster rolls; contractors persisted;
employment programmes (for example, payment often less than prescribed wages
the Sampoorna Grameen Rozgar Yojana [ARC 2006].
(SGRY), the nationwide programme that It is also well known that the NREG Act
the NREG has replaced since April 1, 2008) (NREGA) addressed many of the weak­
might have seen ever-increasing alloca- nesses of earlier programmes through
The views expressed here are personal. Thanks tions, the allocations for the NREG could several features in its design: (i) NREGA
are due to Naresh Saxena, Mihir Shah, Jean well take an inverted-U trend. In other intro­duced a rights-based framework;
Dreze, Suhasini Ali and Aruna Roy and words, if implemented properly, the (ii) it introduced a legal guarantee of
participants at two seminars one at NCAER, allocations to the NREG, while rising work, as opposed to a government pro-
New Delhi in April 2008 and the other at
Centre for Development Studies,
initially, can fall over time – even though gramme which could be withdrawn by a
Thiruvananthapuram in May 2008, for it covers the entire country. government at will; (iii) time bound ac-
comments on an earlier draft. Several second-round effects of the first tion to fulfil guarantee of work within 15
This article draws upon published data from outcome (i e, of a rise in lean-season wages days of demand for work; (iv) incentive
the NREGA web site, discussions with in rural areas) are already visible. First, it structure for performance (central govern­
government officials, independent studies,
discussions with various NGOs working in the
is raising wages in the areas where NREG ment funds 90 per cent of costs of generat-
field, and personal field visits by the author as works are implemented (Table 1 shows ing employment); (v) disincentive for non-
member of the Central Employment Governing wages by state, p 28). The table shows the performance (unemployment allowance to
Council of NREGA. prevailing market wage rates for agricul- be paid within 15 days if work not provi­ded
Santosh Mehrotra (santoshmeh@gmail.com) is tural activities prevailing in 2005, just within 15 days is a state government
at the rural development division, Planning before the launch of the NREG. Notice the liability); (vi) demand-based resource
Commission, government of India and the difference in market wage rates and NREG availability; and (vii) accountability of public
National Governing Council of NREGA.
rates; this is especially noticeable in the delivery system through social audits.
Economic & Political Weekly  EPW   august 2, 2008 27
perspective
Table 1: Wage Rates Number of Person Days in India as a whole, in earlier employment programmes, for
States Average Daily Wage NREGA Employment
Rates in Agricultural Wage Provided – Number
2006-07 (the state-wise fig- example, SGRY and National Food for
Occupations in Rural India, Rates of Person-days ures are in Table 1).3 The Work Programme (NFFWP) (Table 2).5 The
2004-05 (Rs) (Rs) Per Household
programme was initiated in earlier programmes, which covered the
Men Women 2006-07 2007-08
Andhra Pradesh 36.61 27.83 80.00 31.4 39.6
the Phase 1 districts (200 whole country, generated 748 million
Arunachal Pradesh – – 66.00 22.5 6.6 most backward districts of person-days in 2002-03 and 856 million in
Assam 30.23 15.52 66.00 72.5 34.7 the country) in February 2003-04. Under the NREG, the figure was
Bihar 45.06 26.24 77.00 35.3 21.1 2006 and lack of awareness 905 million in 2006-07 for only 200
Gujarat 55.48 30.14 50.00 43.7 29.6 about the programme was districts and 1,437 million in 2007-08
Haryana 57.83 23.35 99.21 48.2 50.0 widespread. Despite the lack (Table 2), partly reflecting the expansion
Himachal Pradesh 12.95 – 75.00 49.8 35.9 of awareness about the guar- of coverage to 330 districts and also
Jammu and Kashmir 31.82 – 70.00 26.9 31.7 antee of 100 days of employ- improved preparedness.
Karnataka 49.00 27.85 74.00 41.1 44.4
ment (which was an impor- Clearly, the demand for work is signifi-
Kerala 55.89 27.99 125.00 22.8 28.6
tant novelty compared to cant. In just 200 districts, there are 2.1
Madhya Pradesh 40.61 26.54 67.00 68.9 63.3
earlier wage employment million households that completed 100
Maharashtra 52.97 31.90 69.00 40.8 39.0
Manipur 38.66 19.79 81.40 93.0 53.7
programmes), an average of days of work (or 10 per cent of all house-
Meghalaya 21.44 9.77 70.00 26.9 38.9 43 days was achieved in the holds that demanded work), despite the
Mizoram – – 91.00 15.6 35.8 very first year of the pro- lack of awareness. In fact, the number
Nagaland – – 100.00 43.6 18.7 gramme. Perhaps the most rose to 3.5 million (or 11 per cent of all
Orissa 44.86 14.02 70.00 57.5 37.0 important point is that the households getting work) in 2007-08.
Punjab 32.01 – 94.48 52.0 10.5 SGRY, the wage employment Chhattisgarh, Madhya Pradesh (MP),
Rajasthan 44.16 9.45 73.00 85.4 75.0 programme funded by the Andhra Pradesh (AP) and Rajasthan – all
Sikkim – – 85.00 60.0 45.3 central government, which poor states, have the highest number of
Tamil Nadu 60.79 31.23 80.00 26.9 57.2
covered all the non-NREG households completing 100 days of work.
Tripura 38.18 – 60.00 71.6 32.5
districts in the country till
Uttar Pradesh 47.79 26.09 100.00 32.0 33.1
March 31, 2008, had gener- Differential Performance of States: The
West Bengal 44.58 32.35 70.00 14.3 22.5
Chhattisgarh – – 66.70 55.6 57.6
ated only 26 person-days per state-wise figures for person-days of
Jharkhand – – 76.68 37.4 44.5 household of work in employment generated per household
Uttarakhand – – 73.00 31.2 42.5 2005-06. This is not surpris- (2006-07 and 2007-08) are summarised
All India 61.23 44.59 43.1 41.8 ing since the programme in Table 1 and show considerable variation
1 Number of person-days per household has been calculated by dividing the total was driven by contractors, across states. The highest number of person-
number of person-days of employment generated in the state by total number of
households that were provided employment in the state. who preferred to use ma- days is for Rajasthan – 85 per household –
2 Wage rates in 2004-05 are the average of different agricultural occupations
(ploughing, sowing, weeding, transplanting, harvesting, winnowing, threshing, chines where human labour whereas in Uttar Pradesh (UP) it is only 32
picking, hardsman, well digging and cane crushing).
3 NREGA wage rates for Arunachal Pradesh are the average of Area-I and Area-II;
could be used. Also, unlike days and in Bihar, 35 (2006-07). Since the
NREGA wage rates for Maharashtra – the average of Zone-I, II, III and IV; similarly the in the NREG, there was no incidence of poverty in UP and Bihar is
average of Hoshiarpur, Jalandhar, Nawanshar and Amritsar for Punjab.
4 – = Not reported. 60:40 ratio applied to the high and this should have led to a demand
Source: Wage Rates in Rural India (WRRI), Labour Bureau, Ministry of Labour and
Employment for daily wage rates in rural India, 2004-05; NREGA, 2005, Ministry of shares of wage:non-wage for jobs, the poor performance of these
Rural Development (MORD) for NREGA wage rates and employment provided- items in programme expen­ states almost certainly reflects inadequate
person days.
diture, which also led effectiveness in the field. Bihar has done
This article deals with key issues of to machines replacing human labour.4 worse in 2007-08 than it did in 2006-07
design and implementation and examines Nevertheless, there is little reason to and UP not much better (Table 1). Among
the experience of the programme in its be complacent about having achieved 43 the Bihar, Madhya Pradesh, Rajasthan,
first two years with the latest programme days of work for rural households de- Uttar Pradesh (BIMARU) states, the only ones
data available. Section 1 summarises key manding work. Table 1 shows that even in that did consistently well in both years
areas of progress as well as weakness in 2007-08, only 42 person-days of work had were MP, Chhattisgarh and Rajasthan, with
the programme. Section 2 outlines key been generated in the 330 districts under about half of all Rajasthan households
areas where remedial action to address the NREG on an average. There is an im-
the weaknesses is either being taken or portant implication of the limited number Table 2: Employment Generated by SGRY and NFFWP
(2002-08, number of person-days in millions)
actively considered. of days of work generated so far. The lack Year SGRY + NFFWP (All India) NREGA
of awareness has had a telling impact and 2002-03 748 –
1  Where Do We Stand Now? the results in Phase 3 (starting April 1, 2003-04 856 –
2008) will only be better if staff are re- 2004-05 912 –
Person-days of Work Generated: The cruited and trained in adequate numbers   in 2005-06 1,116 –
number of person-days of work provided all states to enable work to be generated. 2006-07 – 905 (200 districts)
2007-08 – 1,437 (330 districts)
per household (by those households who The total employment generated under
Source: Ministry of Rural Development, Government of India,
demanded work) was 43 days, on average the NREG is clearly much larger than NREGA Act, 2005.

28 august 2, 2008  EPW   Economic & Political Weekly


perspective

who demanded work getting 100 days of growing (in almost all other states the cent), West Bengal (16 per cent), Bihar (19
work and a fifth of MP households simi- numbers of poor have been declining from per cent) and Assam (23 per cent) are
larly being offered 100 days. 1973 to 2004-05) but poverty is becoming women not one-third of the beneficiaries.8
West Bengal generated only 14 days of geographically concentrated (along with These four state governments should
work in 2006-07, the lowest for any state UP, Bihar, MP, Chhattisgarh, Jharkhand). examine what is holding back women
with a large number of Phase 1 districts Maharashtra showed some improvement from taking advantage of the work oppor-
and barely made any improvement in the from the first year to the second. The tunities afforded by the NREG. However,
following year (22.5 days per household districts of the Vidarbha region, which the fact that women are coming out to do
provided employment).6 Given that these have seen a concentration of farmer hard labour, which is what NREG works
states (the BIMARU ones and West Bengal) suicides in recent years, however, do not normally entail despite the fact that 56
account for a very significant share of the show much improvement and work gener- per cent of India’s women suffer from
poor of the country, this performance is ated there has remained relatively low. body-debilitating anaemia, cannot be
doubly disturbing.7 Among the southern In Rajasthan, the star performer in seen as acceptable. It cannot be seen as
states, Orissa had generated 57.5 days of terms of employment generated, all acceptable also because per capita overall
work per household in the first year but districts have uniformly managed to calorie consumption has consistently
fell back to 37 days in the second. Tamil generate a significant amount of work. declined in India since 1983 (according to
Nadu picked up significantly from 27 In Tamil Nadu, clearly, there was learn- NSS data). The health ministry of state
days in the first year to 57 days in the ing going on between the first and second governments may need to cooperate with
second. Kerala generated 23 days in the year in the Phase 1 districts, since the total the rural development ministry of the
first year and 28.6 in the second. Karna- person-days as well as per household state government to ensure that women
taka provided 41 days in the first and 44 person-days both shot up in the second that come to work are provided iron and
days in the second year. In Kerala, where year. Even in UP, there seems to have been folic acid tablets.9
normal wage rates are higher than under learning going on between the first and
the NREGA, only 23 and 28.6 days of work second year in the Phase 1 districts, since Works Undertaken: The works carried out
were generated per household in the first most districts show an increase in employ- so far under the NREG suggest that the
two years. ment generated. groundwork is being laid for raising produc-
tivity in the future. Water conservation (60
Performance by District: One objective Self-Targeting Is Working: While the per cent), land development (13 per cent)
here is to assess whether there is any share of scheduled castes (SCs) in India’s
Table 3: Households Completed 100 Days
learning going on in the Phase 1 districts, population is 14 per cent, their share in of Employment (%)
which have now had two years of experi- households who received employment States % of Households Completed
100 Days of Employment
ence of running the programme. In AP, under the NREG is 27 per cent. In fact, 2006-07 2007-08
there is a sharp increase in the number of while the share of scheduled tribes (STs) Andhra Pradesh 2.7 9.0
both total person-days generated, as well in the total population is only 8 per cent, Assam 23.4 17.1
as per household; in fact, the average per they constituted 32 per cent of the total Bihar 3.6 0.7
household falls in 2007-08 as a result of employed under the NREG. This is of Chhattisgarh 10.4 11.2
the addition of new districts (from 47 for particular significance since National Gujarat 5.4 3.9
2006-07 to 42 in the second year). In Sample Survey (NSS) data for 2004-05 Haryana 11.1 10.4

Chhattisgarh too, there is a sharp improve- shows that 80 per cent of the poor in India Himachal Pradesh 26.5 5.1
Jammu and Kashmir 9.7 1.4
ment from the first year to the second in are either SCs, STs or Other Backward
Jharkhand 3.7 3.0
terms of employment generated. Classes (OBCs) (with the incidence of
Karnataka 12.8 4.2
In Bihar, there is a consistent decline in poverty highest among the STs followed
Kerala 0.5 32.1
almost all districts in the second year by SCs). The fact that an overwhelming Madhya Pradesh 18.5 21.0
compared to the first in respect of the proportion of workers are SCs or STs Maharashtra 1.5 1.8
person-days generated per household. The demonstrates that the self-targeting, seen Meghalaya 0.6 6.4
total person-days generated in the second as an unique selling proposition of the Mizoram 11.7 0.0
year also show some decline in the Phase 1 NREG, is actually working [ISWSD 2006]. Orissa 11.1 3.4
districts. As in AP, the Phase 2 districts The act requires that at least one-third Punjab 16.8 5.3
have generated much less employment of the beneficiaries shall be women who Rajasthan 54.4 42.0

than the Phase 1 districts. In MP too, have registered for and requested work. In Sikkim 5.4 10.2
Tamil Nadu 0.3 6.2
relatively less work was generated in the fact, women constituted 46 per cent of all
Tripura 26.3 0.4
Phase 2 districts than in the Phase 1 persons working in 2007-08. This is not
Uttar Pradesh 6 10.9
districts. The same applies to Orissa. surprising since men are more likely to
Uttarakhand 2.8 8.3
Maharashtra is interesting, since it is have already migrated in labour-surplus West Bengal 0.6 0.8
one of the six states of the country where backward districts where the NREG was Total 10.2 10.8
not only have the number of poor been implemented first. Only in UP (14 per Source: NREGA (2005), MoRD.

Economic & Political Weekly  EPW   august 2, 2008 29


perspective

and drought proofing (6 per cent) together potential. Penetration of radios is wide- conducted by 30 independent agencies
account for nearly four-fifths of all works; spread in rural areas and in fact, to covering all states. In addition, the Insti-
road connectivity constitutes another 16 increase their penetration, civil society tute of Applied Manpower Research
per cent.10 Taken together with the consid- organisations, both national and interna- (under the direction of programme evalu-
erably increased investment in watershed tional, should be encouraged to distribute ation office of the Planning Commission)
development during the Eleventh Five-Year radios to the poor SCs/STs/landless in rural is undertaking an evaluation, the results
Plan, the NREG works in this area should areas. Awareness of not just the NREG but of which are due shortly.
yield fruit in years to come (we return to most other government programmes can A national consensus is needed about
the critical issue of quality and durability of be easily raised in this manner. why an MIS is needed for the NREG: is it
these works later). intended to improve transparency or for
The works being undertaken are Monitoring and Evaluation: Operation- better management [Hirway and Singh
consistent with the eight specific types alising the monitoring and information 2006]. Serious under-staffing means that
of works listed in the NREGA: (i) water system (MIS) has also been carried out for there are barely one or two people in the
conservation and water harvesting; the NREG more effectively than for most block programme officer’s office at block
(ii) drought proofing including afforesta- other rural development programmes, level on the NREG. So there could be a
tion; (iii) irrigation canals; (iv) provision which are much older. The NREG placed six-month backlog in entering muster rolls
of irrigation facility to land-owned by SC priority on operationalising a web-based on the computer; this cannot augur well
and ST, land of beneficiaries of land MIS (www.nrega.nic.in) as soon as the for transparency. Of course, six-month
reforms and of Indira Awaas Yojana (IAY) programme started. Workers’ entitlement- information will not help much for
(rural housing for poor); (v) renovation of related data is also available on the web: management purposes, except in a rated
traditional water bodies; (vi) land devel- registration, job cards, muster rolls, belated retrospective sense. One should
opment; (vii) flood control works; (viii) employment demanded and provided. In only put on the computer what is good for
rural connectivity to provide all weather addition, works-related data is also avail- management purposes, for example,
access; and (ix) any other work, which able: sanctioned shelf of works, work information relating to labour; funds;
may be notified by central government in estimates, and work in progress. Finally, works; and inspection. The AP MIS is a
consultation with state government. Some financial indicators available include model for emulation, since it ensures that
state governments have been suggesting funds available/spent, amount paid as there is no delay in putting information on
that other works should be added to this wages, materials and administrative the web. It can serve both the purposes of
list of works, since the process to add new expenses. Computerisation has proceeded transparency as well as management.11
types of works (point 9 above) is dilatory. apace, with a database having been In social audit and muster roll verifica-
This is very important point for the contin- created on the informations and commu- tion, AP and Rajasthan are leaders but
ued progress of the scheme. nications technology (ICT) infrastructure greater efforts are required in all other
of blocks. The result is that 82 per cent of states [Sastry 2007]. All states are to
2  Challenges Ahead the 4,141 NREG blocks are already filling complete a social audit of all NREG works
out the data on the ICT infrastructure. in the next three months, according to the
Addressing Lack of Awareness: Table 1 However, in most states, data is being MoRD. So far, however, the social audits
shows that only 43 days of work was pro- entered very late – undermining the utility conducted have not been done by the gram
vided; this is despite the fact that almost all of data for both transparency and panchayats (GPs) or gram sabhas but
the households that demanded work were managements purposes. rather by non-governmental organisations
provided with it. To address the lack of Monitoring has also involved field (NGOs). So there is little institutionali­
awareness among the poor, several actions verification by external and internal sation of the social audit process in the
have been taken: one day orientation of all agencies. There have been field visits by NREG, although it was seen to be a unique
sarpanches at the block level; advertise- Central Employment Guarantee Council feature of the NREG (ibid).
ments in local vernacular news­papers, members to a few states, which included a The comptroller and auditor general’s
radio, television, films and local cultural social audit (Jharkhand, Chhattisgarh and (CAG) report on the NREG (based on its
forms; leaflets and brochures in simple lan- Tamil Nadu). National level monitors have first six months of functioning) points to a
guage; fixing one day as ‘rozgar diwas’ in a visited almost all the Phase 1 and Phase 2 number of procedural irregularities but it
fortnight; and preparation of primers for districts of the NREG. The ministry of rural does not present much evidence of large-
the workforce and sarpanches. Neverthe- development (MoRD) has itself undertaken scale embezzlement of funds [CAG 2007].
less, lack of awareness is still an issue in the a monitoring campaign, with 10 villages Those of us who have visited the field and
existing districts and lessons have to be visited by each officer. A comprehensive had discussions with officers implemen­
learnt for Phase 3 districts from that expe­ evaluation (with World Bank support) is ting the programme, have found that the
rience, since the programme has become underway to assess the socio-economic officers consider the NREG a very different
universal with Phase 3. Our field visits impact at the household level and the programme from the public employment
demonstrated that the use of spots on the quality of assets created in select the programmes of the past (NFFWP, Employ-
radio are still not being utilised to their states. Research studies have been ment Assurance Scheme (EAS), SGRY).
30 august 2, 2008  EPW   Economic & Political Weekly
perspective

They repeatedly say that the risks of should take up other projects not relying lump strata into a few categories. Average
getting caught in the case of irregularities upon a demand-driven scheme in the rates prescribed in the SORs also have no
are much greater in the case of the NREG spirit of the SGRY, in which the use of con- reference to the climatic conditions where
compared to all other government tractors and machines has been permitted. work takes place (hot summers or humi­
pro­grammes. In fact, the overwhelming An alternative way out of the problem is dity can slow work) [Shah 2007]. The
feeling among field level government to clarify the definition of “household”. under­lying notion of the SORs is that the
officers is that it is a far superior The NREGA is not very clear in defining a workforce is healthy but the daily produc-
programme of public works (from the household: is an adult son or widowed/ tivity of malnourished workers (adult mal-
viewpoint of the poor) than such works in separated daughter living with parents nutrition is 31 per cent among males and
the past; they (the officials) have to work separately entitled to work or not? The higher among females, National Family
much harder for this programme and answer is not clear from reading the act. Health Survey 2005-06) is likely to be
partly for this reason they do not prefer to But the NREG guidelines make it quite much lower than this average. There is no
take on the responsibility of the NREG.12 clear that adult children, even if living notion of age or gender difference in pro-
Whatever the perception of officials of the under one roof with the parents, are ductivity in the current SORs.
programme, the need for social audit has entitled to 100 days of work, independ- Since the promulgation of the NREG,
been demonstrated and such audits will ently of the parents. This issue has arisen there has not been a systematic effort
have to be actively encouraged. repeatedly in field observations and its made by states to revise the SORs. Given
Besides, social audits must be institu- resolution will remove a source of dissatis- these circumstances, it might be useful if
tionalised, meaning that they must be faction with the NREG and also clarify the central government was to actively
regularly carried out by gram sabhas once matters for concerned officials. Once encourage the revision of the SORs, based
every six months. So far, social audits have interpreted as outlined in the guidelines, on zonal studies wherever SORs have not
tended to be carried out by NGOs or under it will actually increase both the demand been revised. Even if the centre does not
the aegis of the Central Employment for work as well as entitlement to it. engage in the revision of SORs, it will need
Guarantee Council. AP has put in place a to actively monitor that all districts have
system of institutionalised social audit, Schedule of Rates and Wage Rates: It actually revised the SORs. Again, profes-
involving routine verification of NREG has been pointed out that village people sional support is needed on an urgent
records through the participatory have to be involved in the way work will basis before the next peak work season
processes. That has to be the main route to be measured and paid. The last is critical begins for the NREG.
ensuring transparency. However, even in if statutory minimum wages for labour are Given that all unskilled wages are paid
AP, there is a danger of the process becom- to be paid. This is the only way to achieve entirely by the central government, state
ing a top-down one. Greater initiative required productivity norms. As Ambasth, governments have a clear incentive to
needs to come from the gram sabha. Vijay Shankar and Shah (2008) rightly raise state level minimum wage rates paid
note: “Corruption in employment pro- under the NREG (as they bear no part of
Definition of ‘Household’: The number grammes is not merely a matter of fudged the cost). Perhaps the only factor holding
of days of work being given per household labour payment through muster rolls. The them back from notifying even higher
is another issue. There are major differ- much more creative use of corruption state level minimum wage rates than
ences between regions in India in terms of arises from the way the schedule of rates already announced once the NREG started
the likely demand for work under the (SOR) is used to manufacture estimates is the fact that it puts upward pressure on
NREG, depending upon whether they are and cheat labour. With current SORs, workers non-NREG related wage rates, which to
labour-surplus or labour-deficit regions. are often unable to earn minimum wages. some extent, are being protested by
The programme was initiated in the 200 This can be a serious problem at the heart farmers hiring labour for their farms.
most backward and thus, mostly labour- of the implementation of the NREG.” Eventually, wage rises can only be
surplus districts of the country. The fact Work done on employment programmes maintained if productivity too rises
that in terms of numbers of days of work in India has since independence been commensurately – another reason why
offered, no distinction is made between measured through the SOR. Employment NREG works must be such as to contribute
districts is an issue of design; 100 days is programmes in the past have generally to raising agricultural productivity. Other-
not likely to be enough in labour-surplus been implemented by contractors using wise, with a rise in rural wage rates, food
districts, while in labour-scarce ones, 100 machines. The rates provided in the SORs prices may rise thus, cutting away at the
days will probably rarely be demanded. In assume that machines will be used and wage gains that rural workers are making.
Phase 1 districts of the NREG, there were at contractors will not pay minimum wages. However, currently the priority should be
least 2.1 million households that com- Thus, the way SORs are currently conceived that the NREG stabilises as a programme
pleted 100 days of work in 2006-07 and makes mechanisation and the use of con- and this may be an inappropriate time to
this is when the awareness of the act is tractors almost inevitable and the payment raise the issue of wage rates.
limited. One view could be that the NREG of minimum wages virtually impossible.
is a minimum guarantee of work and that For example, earthwork excavation takes Convergence: Only eight types of works
in areas where there is a lot of labour we place across geological strata but SORs are permitted to be carried out under the
Economic & Political Weekly  EPW   august 2, 2008 31
perspective

NREG. This provision could potentially continuous exercise. This kind of effort officials are regularly having to visit Delhi
prove to be a handicap, if it undermines would need coordinating between various to secure the release of payment.
the objective of synergy and convergence state governments and the MoRD. Ongoing There is a possibility that the central
of programmes. It is possible for labour performance appraisal in the field, which government will, instead of releasing
component costs of that IAY and Pradhan would include profiling varied state funds for the NREG directly to districts (as
Mantri Gram Sadak Yojna (rural roads) to practices on rules, formats for records, has been done for the last two years),
be met under the NREG. The operational staffing, transparency measures, MIS allocate funds to state governments, who
guidelines of the NREG permit such status, delivery of labour entitlements would then become responsible for
dovetailing. If labour is in short supply in require coordinating systematic field allocating to districts. This would clearly
some districts, this kind of dovetailing visits, devising formats for statistics from be more efficient and less burdensome
would be particularly helpful. The states’ the states, “performance sheet” proforma for the small number of central govern-
view is that the state governments should for state governments. It has been the ment staff dealing with the programme.
be left to decide where such dovetailing mandate of the Central Employment Nevertheless, procedures would need to
should occur; currently works other than Guarantee Council to oversee the imple- be streamlined at the state level to ensure
the permissible eight can only be carried mentation of the act in the country but that village works are not stalled in the
out with the centre’s concurrence. States unfortunately, as has also been noted in future by delays in fund flows from state
should, in any case, prepare a labour the CAG report, the body is without a capitals to district head­quarters. The
demand projection, saying by when they secretariat, staff and functional frame- emergence of an administrative secreta­
will exhaust the demand for work for the work. A technical secretariat is now riat at the state capitals for the NREG would
permissible eight works and present a case being created at the central level, thus be an important step in the right
for using funds for non-permissible works. attached to the MoRD. Similarly, recently direction to ensure (a) speedier smoother
Clearly, this issue needs to be resolved completed costing provides for such flow of funds to the districts; and (b) better
in the interest of flexibility, if only because technical and administrative secretariat monitoring of NREG works.
in our large and extremely diverse country, at the level of the state capital as
the needs for both social and economic well, attached to the states ministry for Transparency in Wage Payment: There
infrastructure are correspondingly diverse rural development. is growing evidence that to ensure full
– one list of works does not necessarily fit transparency of payments under the NREG
all conditions. Through convergence not Release of Funds: Field reports (our own to workers, savings accounts for workers
only is synergy likely to be achieved with and those of others) are suggesting that are needed in banks and post offices. This
other programmes but fiscal costs there remain considerable delays in the system would almost eliminate any incen-
reduced by releasing funds from other release of funds, leading to delays in initi- tive the implementing officers have to
programmes through such convergence. ating works, abandoning continuing fudge the muster rolls, since payments are
The universally – acknowledged advan- works already started and sometimes, in beyond their reach.13 To prevent the wrong
tage of the NREG is that works are carried delays of payment to workers. The guide- people from claiming money from the post
out with much less “leakage” than has lines state that the NREG would be differ- office accounts, banks/post offices will
traditionally characterised other govern- ent from the SGRY and NFFWP because have to insist on photos on passbooks,
ment pro­grammes. If that is the case and there would not be predetermined alloca- which can be matched with the photos on
the need for expanding rural infrastruc- tions but releases based on state propo­ job cards, to identify workers when they
ture is pressing, then the logical conclu- sals. Each state would formulate and sub- come to collect their wages. Although cash
sion is that convergence should be encour- mit a state annual work plan and budget payments are preferred by workers where
aged. However, care must be taken that proposal to the MoRD. The actual release banks/post offices are far (there is an
the primary purpose of the NREG should to a state government will depend upon its opportunity cost for workers if they have
remain the eight items listed in the act in actual utilisation of funds released. The to travel say, 10 km, to a bank/post office
the initial years. At the same time, some MoRD will release funds, say the guide- to receive their payment), there is almost
provision needs to be made (perhaps a lines, to a revolving fund at the district no alternative to direct payment of wages
fixed percentage of total expenditure, not level to be operated as a joint account of into bank/post office accounts to avoid
exceeding say 20 per cent) to allow for which one of the signatories will the dis- poor, illiterate workers being cheated. The
building other infrastructure required in trict programme coordinator (usually the postal network is used by AP (at a 2 per
rural areas. district magistrate). After 60 per cent of cent service charge) and by Jharkhand
the allocation given to any GP has been without service charges. The department
Elaborate Set-up for Central Employ- spent, the GP may apply to the block-level of posts has indicated the need to
ment Guarantee Council: The NREGA programme officer for the NREG for the strengthen its sub-post office/branch post
in its current stage requires fresh thinking release of additional funds. However, office through the computerisation of the
and response to practical problems this process does not seem to be working sub-post office. A service charge was
emerging from the field. Monitoring of and requires urgent attention. NREG dis- proposed by the department of posts for
the NREGA in the country has to be a trict senior officers and state government opening wage earners’ accounts; the issue
32 august 2, 2008  EPW   Economic & Political Weekly
perspective

now stands resolved, with the central duplicated. On the other hand, with a well- has led to fragmentation of landholdings
government promising to invest in conceived interface, there is likely to be and holdings becoming smaller and
sub-post offices to enable them to handle synergy between the twin objectives of smaller. However, land productivity may
the increased workload. the NREG: creating productive work at well rise faster and the maintenance of
The real issue here is that while on an remunerative wages and also creating water conservation related assets might
average in the country there are roughly 20 productive assets that are not only created be greater if it was carried out on private
villages to one bank branch and four vil- by the community but managed by it. land. If asset-creation on private land was
lages to each post office, there is a wide In fact, the raising of the agricultural also assisted under the NREG, with the
variation between states in terms of availa- growth rate to 4 per cent per annum as proviso that such asset creation would be-
bility of post offices and banks. A way has planned for the Eleventh Five-Year Plan, gin with the small/marginal farmers, both
to be found to ensure that wage payments from the prevailing rate of roughly 2 per the concerns around the durability and
are made through either banks or post cent per annum, is critically dependent sustainability of assets would be met
offices and the problem of distance to these upon raising productivity on rainfed agri- (since moral hazard around who will
sites for workers has to be overcome cultural land [GoI 2006]. Since rainfed maintain assets would be reduced) and
through innovative means (for example, agriculture accounts for 60 per cent of all productivity gains might be seen sooner
perhaps through mobile counters). Where agricultural land, both poverty alleviation rather than later. Moreover, it may weaken
payment through post office or banks is not and increasing productivity will depend farmers’ resistance to the NREG on the
possible, payments should be made in the on the efficiency of rainfed agriculture, ground that it is raising agricultural wage
presence of the panchayat samiti. However, which in turn implies enhancing the rates and thus, raising their costs. After
payment through post offices or banks must coverage and effectiveness of watershed all, water conservation action would
continue to be pursued, as is happening in development programmes. The Eleventh improve the water table for all, regardless
some districts even in UP (which has among Plan (and the Annual Plan for 2007-08 of whether it is on small or large farms.
the poorest bank/post office to population and 2008-09) has already increased the In any case, all civil works under the
ratio in the country). The government of AP allocation for centrally-sponsored water- Integrated Watershed Development Pro-
is paying all NREG wages through post shed development programmes. A unified gramme could be cove­red under the NREG.
offices [CBGA 2006] and Jharkhand has guidelines for the erstwhile three differ- In some states tribals do have fairly large
created bank/post office accounts for two- ent programmes (Integrated Watershed landholdings, which are lying fallow
thirds of its NREG workers. This is an exam- Development Programme, Desert Develop­ because of lack of rain/irrigation and these
ple of the separation of payment agencies ment Programme and Drought-Prone Area have benefited from these provisions.
from implementation agencies, recom- Programme) has already been notified. A Also tribal/dalit holdings have been
mended in the NREG guidelines. National Rainfed Areas Authority has pooled and farm ponds dug, which bene-
been created. It is now time to pro­perly in- fit all the landholders. In Kerala, the
Watershed Development Programmes tegrate the larger watershed develop­ment addition of all land reform beneficiaries
and NREG: The Eleventh Plan will programme with the soil and water con- has been very beneficial.
increase allocations for rainfed-area servation and land development works of
agricultural revival activities in a big the NREG (which are inveretably on a Professionalism in NREG: It is only
way, primarily through the instrument smaller scale), so that the water table quality works, which will ensure that the
of watershed development programmes. rises in rainfed areas. That can change required land and labour productivity
Implemented by the state governments erstwhile one-crop areas to double- and- increase takes place – thus, ensuring the
through funding from the department of triple-cropped areas and raise producti­ achievement of the second objective of the
land resources (in the central govern- vity to supplement the output of the 40 per NREG (mentioned at the beginning of the
ment’s MoRD), serious thought has now cent of agricultural land in the country article). However, quality cannot be
begun on how to ensure a proper interface that is irrigated. ensured merely by putting administrative
between the NREG’s water conservation, staff in place (which, in any case, has not
drought-proofing and land development Creating Assets on Private Land: One happened in many states, as the CAG report
activity on the one hand and the grander, issue that needs resolution is whether notes). Nor is it likely to happen simply by
watershed-based activity (now under the assets can and should be created on pri- carrying out training (and even here many
recently constituted National Rainfed Areas vate land. So far, the NREGA only permits states have made little effort). The more
Authority) on the other.14 Interface is the creation of assets on private land be- important need is for technical hand-hold-
possible with the Command Area Develop­ longing to SCs and STs and also all land ing on a regular basis of the administrative
ment Programme (CADA), and with the held by land reform beneficiaries. That and panchayati raj institution (PRI) staff.
Integrated Watershed Development Pro- has been extended to include land of all This technical hand-holding can only be
gramme (now merged with the activties below poverty line (BPL) families and also carried out by professional personnel,
of the National Rainfed Areas Authority. IAY beneficiaries. But the problem is pre- hired on a contractual basis, who are avail-
Without this interface, there is a clear risk cisely that BPL families increasingly do not able on an itinerant basis to sites where the
that money may be wasted, or merely hold much land as over time, inheritance NREG is being implemented.
Economic & Political Weekly  EPW   august 2, 2008 33
perspective

The CAG report shows that the NREG is Second, there is no management sup- to conceive and design work and ensure
being run for all practical purposes with port at the state secretariat level for the effective execution, from a watershed
very little professional input. A technical NREG. The money for the programme is development perspective.
secretariat to the Central Employment given to the GPs but the centre is con-
Guarantee Council is being created. At stantly seeking information from the state. State Rules: It is to be realised that the Act
the same time, 50 per cent of NREG works With no additional staff, it is not possible prescribes entitlements for the labourers
are supposed to be implemented by GPs to run a programme on the scale of the and basic administrative processes but the
and without the involvement of contrac- NREG, certainly not execute it efficiently. nuts and bolts of the Act have been put
tors. While the direct involvement of the Officers are required at the state secretar- together in the operational guidelines.
GPs is important to ensure local-level iat level; there is a strong case for such The operational guidelines are seen as a
accountability, it is entirely unclear from secretariat level staff. good practice manual and run the risk of
this mode of operation how the quality of Third, the panchayat level has a rozgar not being accorded required credence by
works is going to be maintained. There is sewak but an accounts person is needed, the state governments. Therefore, it is
anecdotal evidence that the quality of since the NREG needs a double entry cash- important to push for rules (model rules
works is positively correlated with book. After all, at the GP level, there may can be brought by the central government
demand for work from the poor. Without be multiple schemes that are run through which can be subsequently adopted by the
technical and professional support, the GP and it is impossible for the GP state governments) on grievance redressal
which is contractually obtained – being to effectively run NREG work without and social audit.
employed on a non-permanent basis – such support.
there is little likelihood of the quality of Fourth, despite all its provisions, the act 3  A Final Word
works improving. If the quality of works still does not answer the question – what if It is perfectly possible to put in place a
does not improve, there is little likeli- wages are not paid? If job cards are not system to minimise corruption in the
hood that the productivity gains that distributed? If muster rolls are not NREG (and in fact other schemes) as
were proclaimed as a major benefit of the maintained? In all these situations, how discussed above. Equally importantly, the
NREG will be realised. does the labourer get his grievance original administrative support for the
First, 50 per cent of works are to be redressed? There will hopefully be provi- NREG was pegged at 2 per cent, which was
carried out by GPs, the remaining by sions for a person at the sub-district level myopic to say the least. However, 4 per
government agencies. But the government throughout the country for such grievance cent of programme costs now allocated to
does not have the staff to carry out such redressal. But it is worth considering state administrative costs and professional
works, especially in states which have a and national Lok Ayuktas. support is still woefully low and does not
large number of vacant posts at the district Fifth, technical people are needed at recognise the fact that a programme of
and sub-district levels. At the very least, the district level, who can be hired on a the scale of the NREG requires serious
the staff provided for to implement the contractual basis and will be available as professional support, not government
NREG have to be appointed (one gram and when needed for different locations to business as usual. If the 2 per cent per
rozgar sewak per GP and one technical provide technical support. It is not possi- annum agricultural growth rate is to be
assistant for five GPs, plus one full-time ble for the junior engineer to perform all reversed, the rainfed areas that constitute
programme officer at the block level, as the tasks necessary. There could be many 60 per cent of the agricultural cropped
specified in the guidelines). Most govern- works other than the NREG in the area of area in the country have to raise their
ment programmes allow for 10 per cent of one GP and the junior engineer would be land productivity; they have to move from
total expenditure for administrative costs. hard put to cover them all. The State one crop per year to preferably two if not
Hence, the provision for 4 per cent for Employment Guarantee Council, now three crops per year. The evidence from
administrative costs is already proving a created by all states, is meant to be watershed development programmes in
serious constraint.15 However, there is a supported by a technical support group the past has demonstrated that such
catch-22 situation here: state governments but there is still no provision for district programmes can repay the investment on
cannot initiate new works on a large scale and sub-district level professional support them many times quickly. Therefore, if
under the NREG unless locally available
staff have been appointed but with limited
works the expenditure on the NREG is
correspondingly small and 4 per cent of a
Unbound Back Volumes of Economic and Political Weekly from 1976 to 2007 are available.
small spend limits the appointment of
staff, let alone drawing upon professional Write to:
engineering input. Hence, a serious cost Circulation Department,
estimate providing the administrative and Economic and Political Weekly
320-321, A to Z Industrial Estate, Ganpatrao Kadam Marg,
professional support is required to make
Lower Parel, Mumbai 400 013. 
the programme work with a modicum of Circulation@epw.in
technical professionalism.16
34 august 2, 2008  EPW   Economic & Political Weekly
perspective

the NREG continues along the “business as officers implementing the programme suggest what is noted in the job card) Thus, the job card
that the officers consider the NREG better struc- and the booklet would supplement each other in
usual” manner, the programme runs the tured than the earlier public employment ensuring transparency.
programmes and the risks of getting caught in 14 In a seriously drought-affected district like
risk of going the way of most previous case of irregularities are much greater. Sonbhadra, we saw that although NREG works
wage-employment programmes. On the 6 Bandyopadhyay (2008) suggests that NREG were aimed at improving water conservation
other hand, if its design weaknesses, as wages are much higher than market wages and through check dams, there was no watershed
hence, large landlords may fear that NREG works development activity being undertaken. This was
well as the flaws in the design of its imple- might distort the wage labour market by exerting despite the fact that the terrain is ideal for water-
upward pressure on market wages. shed development through the building of contin-
mentation are addressed, it can serve as a uous contour trenches on the ridge surrounding a
7 A problem raised by the West Bengal government
beacon of light for other rural develop- is that their suggestions for “works” are not being valley, that labour is available and demanding
accepted. They find it impossible to undertake work, and rainfall for the last four years has been
ment programmes, raise the stagnating water conservation works in all gram panchayats. half of the average.
rural wages, push up productivity, stem They have also asked for the kachha work in 15 The 4 per cent is meant to cover the following
school/Indira Awas Yojana houses to be permit- activities: (1) GP to have one gram rozgar sewak
the tide of rural-urban migration and ted but once again there is a delay in these being per GP for registration, job card issue, employ-
have second- and third-round effects approved. ment demand and provision, work implementa-
8 Even in these states there is a considerable varia- tion, payment, social audit, records; (2) Block to
that go well beyond the policymakers’ tion between districts in respect of women’s have one programme officer per block for overall
original design. participation in NREG works; we saw in management; technical assistants pooled to
Sonbhadra district in UP that Kol (STs) women service five GPs; computer assistants for IT and
were out in their hundreds at sites in this drought- MIS; one accountant for finance; (3) District to
Notes prone area at NREG worksites. have works manager with technical assistants; IT
9 When we suggested this measure to the principal manager with computer assistants; accounts
1 Even though it may not have worked very well in manager with accounts assistants for finance; one
secretary, UP health, we were told that she has
that respect so far, reforms underway will push already initiated such action at NREG work sites. training coordinator for training; and one coordi-
the programme in that direction in future. In Rajasthan, actually, there is anecdotal nator for social audit and grievance redressal.
2 See, for instance, the series of articles by P Sainath evidence that the men are happy to send the 16 For example, in seriously drought-affected
(2008) in The Hindu on a regular basis based on women to do this back-breaking work. They do Sonbhadra district, the author saw several sites
field visits to various states. As some of the 30 not migrate either. where the terrain permitted watershed develop-
independent studies currently underway on the 10 However, this does not establish the productivity ment alongside with small bandhs were possible,
NREG, more will be learnt on this subject. They of these works. That can only be done after the and would have enormously increased the effec-
are: Indian Institute of Management, Bangalore, works are completed and even then, our ability to tiveness of the rainwater harvesting in a district
Karnataka (two districts), Andhra Pradesh (one pronounce depends upon (a) collecting base level where the water table has fallen by seven feet
district); Centre for Budget and Governance data on yields; (b) measuring yields after comple- within the last year. But there are no senior
Accountability, Andhra Pradesh (two districts), tion of works’; and (c) separating out the effects of engineers who are being drawn upon for this
Chhattisgarh (two districts), Madhya Pradesh other interventions to raise yields. This can only purpose.
(two districts), Jharkhand (two districts); Indian be done through scientifically structured ex post
Institute of Public Administration, Jharkhand evaluation.
(four districts); Institute of Human Development, 11 States may claim that they do not have the References
Bihar (seven districts); Centre for Development manpower to undertake this level of computerisa- Administration Reforms Commission (2006): National
Alternatives, Ahemdabad, Gujarat (six districts). tion; however, one of the reasons of AP’s success is Rural Employment Guarantee Act, Government
These studies, however, need to be published and said to be the Tata Consultancy Services software of India, New Delhi.
put on the NREG web site as soon as each becomes (National Informatics Centre software is used in Ambasth, P, P S Vijay Shankar and M Shah (2008):
available; otherwise, independent researchers all other states). There is an urgent need, there- ‘Two Years of NREGA: The Road Ahead’, Economic
are completely dependent exclusively on data on fore, for an independent evaluation of compara- & Political Weekly, Vol 43, No 8, pp 41-50.
the government website. tive merits and demerits of the TCS and NIC
software. Whichever software is used its design Bandyopadhyay, D (2008): ‘Mayhem at Dinhata’, The
3 The CAG report states that the average employ-
should be such that it is not seen as a burden by Statesman, February 14.
ment provided to each registered household
was 18 days. However, the CAG report’s estimate programme management staff but rather adding Centre for Budget and Governance Accountability
is mistaken. We need to divide total mandays value. (2006): ‘Draft Report on Implementation of
generated by total number of households 12 The fact is that evidence is emerging that some NREGA in Andhra Pradesh, Chhattisgarh,
provided employment to arrive at the number state governments are already being quite Jharkhand and Madhya Pradesh’, New Delhi.
of days of work worked by the household. In pro­active to prevent corruption and other states Comptroller and Auditor General (2007): ‘Draft
the CAG report, on the other hand, the average need to learn from such good performers [Dreze Performance Audit of Implementation of National
days of employment per household has been 2008]. For instance, Tamil Nadu has initiated a Rural Employment Guarantee Act’, Office of the
calculated by dividing the total number of good system of muster roll (MR) maintenance, Principal Director of Audit, Economic and Service
mandays generated by the total number of regis- whereby each labourer has to enter her signature Ministries, New Delhi.
tered households – a number which is much or thumbprint in the MR every day by way of Dreze, J (2008): ‘Employment Guarantee: Beyond
higher (since not all registered households marking attendance. This ensures not only that Propaganda’, The Hindu, January, 11.
actually worked). the MR is available for public scrutiny at the GoI (2006): Report of the Technical Committee on Water-
4 In fact, under the NREG, the share of wages in worksite, as required by NREG guidelines but also shed Programmes in India, Parthasarathy Commit-
total programme expenditure has tended to that large numbers of people actually see it every tee Report, Government of India, New Delhi.
exceed 60 per cent, and has averaged 67 per cent day. This reduces leakage. Similarly, Rajasthan Hirway, I and Harpreet Singh (2006): ‘Concurrent
in the country, which is a problem to some extent, has shown the way in MR verification through the Monitoring of National Rural Employment Guaran-
discussed later in the paper. right to information movement. The fact that tee Act’, feedback from the field, Centre for Devel-
5 A key concern about the NREG, based on experi- Orissa has not adopted such methods meant that opment Alternatives, Ahmedabad.
ence with past programmes is whether the in Orissa the transition from the traditional
Indian School of Women’s Studies Development
number of persons actually provided with jobs is system of corruption has not been made, though
(2006): ‘Monitoring and Evaluation of National
much less than recorded in the official data the situation is improving after the revelations in
Rural Employment Guarantee Scheme with Special
because of malpractices such as fudging of muster October 2007.
Focus on Gender Issues’, New Delhi.
rolls. It is impossible to pronounce definitively on 13 Of course, officers may still fudge muster rolls
IHD (2006): ‘Evaluation and Impact Assessment of
this issue except by verifying through sample and produce people with fake job cards at banks
National Rural Employment Guarantee Scheme
surveys those reported to be employed in field to enable them to fraudulently withdraw from
in Bihar’, Institute for Human Development
level records have actually been employed. The bank/post office (PO) accounts. To prevent such
New Delhi.
CAG report has brought out instances where an occurrence, workers could be given a printed
muster rolls were not properly maintained or token for each day worked, which are then Sainath, P (2008): ‘NREGA Hits Buses to Mumbai’, The
were tampered with. However, it does not indicate exchanged for cash at the bank/PO. For example, Hindu, May 31.
whether the impropriety in maintenance of in one UP district, each job card holder is given a Sastry, Trilochan (2007): ‘NREGA Surveys in Anantapur,
muster rolls was a major problem. It also does not cheque-book style booklet with a counterfoil; the Raichur and Gulbarga’, Indian Institute of Manage-
indicate what percentage of records checked main token is exchanged by the worker at the ment (IIM), Bangalore.
showed irregularities. The key question is not bank, while the counterfoil is retained by the Shah, M (2007): ‘Employment Guarantee, Civil Society
whether there are some irregularities but what is worker (so the worker too has a record of the and Indian Democracy’, Economic & Political
the extent of such irregularities. Discussions with number of days worked in a year, in addition to Weekly, Vol 42, Nos 45 and 46, pp 43-51.

Economic & Political Weekly  EPW   august 2, 2008 35

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