IMPACT OF THE RIGHT TO WORK PROGRAMME

INTRODUCTION

Right to Work is an unenforceable right

Staggering financial implications A brief timeline :

3 2 1

2005,MGNREGA 2001, SGRY

1978, IRDP

1970, Employment Guarantee Act, Govt. of Maharashtra

Providing wage employment opportunities and boost rural income Creating sustainable rural livelihoods through regeneration of the natural resource base i.e. augmenting productivity and supporting creation of durable assets Strengthening rural governance through decentralisation and processes of transparency and accountability Reduce population pressure in urban areas through migration

Ministry of Rural

Development
nodal ministry

Implementing
agencies line dept. & state agencies Intermediate & district panchayats

Main agency: Gram Panchayat

GoI : 100% wage cost for unskilled labour 75% of material cost

State Govt. : 25% of material cost 100% of unemployment allowance

Programme officer & District Programme coordinator

Funds released to bank & PO A/C

NREGA workers receiving additional money through this scheme will spend

Again provides stimulus to Production, employnment and demand

The additional spending will create demand for commodities

The extra income so generated will further lead to increase in Demand

Production of these commodities will create demand for Labour, Capital and Raw materials

This Spiral and the demand stimulating process is called the Multiplier effect. The value of the Multiplier depends on the marginal propensity to consume of benefitting from this scheme. The mpc is our extra spending out of the additional rupee we earn.
Higher the mpc, greater will be the stimulus to demand. One advantage of the NREGA scheme is that it is handing out money to the rural workers who have the highest mpc. People who are on the margins of existence are more likely to spend than save most of what they earn.

Millions of small and marginal farmers are in fact owners of small pieces of agricultural land who are forced to work under NREGA because the productivity of their land is not enough to make their ends meet.The additional income which these worker get under NREGA scheme, can be used by them to increase the productivity of their land by increasing their investment in goods such as better farming technology, seeds, pesticides, storage.

Thus along with public investment it would also lead to a surge in private investment and gives a chance to these workers to return to fulltime farmingThere are examples of such behavior by the farmers in the Tribal belt of Central India. Te construction of dams on the common land helped recharge the wells of the poor farmers who worked as laborers. The additional income and public investment incentivized them to make private fixed investment.

Rising incomes also improve capacity utilization and happier expectations act as incentives for more investment.This positive impact of growing economy on private fixed investment is known as the Accelerator Principle in macro economic theory.

55-62% employment for SC/ST households

Income & livelihood security

Opening bank and post office accounts

Benefits and success

Agricultural productivity
Women empowerment

Creation of sustainable assets

1. Income and Livelihood Security

Household income - 1,064 rural

households across Medak district of Andhra Pradesh, around 12 percent of the households indicated that their household income had increased as more members of the same household were being able to work
Monthly per capita

Fact : Rs 1,10,700 crore (66 % of the total expenditure of around Rs 1,66,000 crore) as worker wages from FY 2006 up to FY 201112

expenditure(MPCE) 2500 households surveyed in Andhra Pradesh. Participation in MGNREGA had a significant and positive impact on consumption expenditure, intake of energy and protein and asset accumulation

Net benefits from the Scheme also take into account, availability of alternate employment opportunities(AEO) and opportunity cost of time as important parameters

Wages of female casual workers increased by 8% Wages of male casual workers increased by 1%

2. Gender and Social Empowerment

National participation rate of 47 per cent, evidence suggests that women are

participating in the Scheme more actively than in other works, surpassing the minimum requirement of 33%
Has reduced traditional gender wage discrimination, particularly in the

public works sector- Rs90.9 per day for men, and for women it was Rs 87 per day. The wage difference was larger for labour in other public works; Rs 98.3 per day for men and Rs 86.1 per day for women
Economic Independence

Green line represents the 33% women participation mandated by the Act

To assess quality, durability and utility

RoI/cost recovery: Assessed 143 best performing MGNREGA water related assets and found that RoI estimates are positive in the case of a majority of assets. Out of 143 assets,117 assets had a RoI of over 100 per cent in the first year Beneficiary perceptionbased surveys: Out of all the MGNREGA assets being used, 83 per cent in Rajasthan, 80 per cent in Madhya Pradesh and 67 per cent in Andhra Pradesh, were considered to be of good or very good quality Quality and soundness of technical design: In Madhya Pradesh, in an evaluation of 100 dug wells, across five districts, irrigation structures were found to have a low failure rate of 5 per cent

Return on Investment for MGNREGA assets more than 100% Has faced criticism on the quality and sustainability of the assets created under it

Rise in Groundwater Improvement in soil quality Reduction in vulnerability of production systems to climate variability Creation of Green Jobs In the districts of Ujjain and Dhar, the irrigated land area increased by 26 percent and 19 percent respectively

Misconception : Agriculture labour shortage caused entirely by MGNREGA. Fact : 70 per cent of the works in the Scheme have been generated during the agriculture lean season Also, impact on labor market varies from place to place Four distinct situations of MGNREGAs (demand, supply and market wages) interaction with the labour market

Insignificant Impact Misfit Significant Potentially significant

Led to an increase in bargaining powers of the laborers. Seasonal scheduling of MNREGA Activities non agricultural peak seasons Reduce distress migration as compared to migration taken up for economic growth and other reasons

Income records for villages Gambhirpur, Abhapur & Bandhana Regression analysis run to test the impact of yearly NREGA income and yearly secondary income to total yearly income (dependent variable) Results of regression analysis y = 4339.889 + 1.415 1 + 0.686 2
R Square 0.88 Adjusted R Square 0.86

NREGA wage income increases the total yearly income by Rs. 1.415 Secondary wage income increases the total yearly income by Rs. 0.686 R square value of 0.88 means that NREGA and secondary jobs alone contribute 88% of yearly income earned by sample population

Awareness

Planning Demand For Work And Unemploy ment Timely And Full Payment Of Wages Leakages And Misappropr iations Transparen cy And Accountabi lity Accuracy Of MIS

Low awareness about Unemployment allowance Work on demand Grievance redressal mechanism Infrequent GSs Low participation in GSs for selection and prioritization of work Work selection not done according to set priorities or demand of the GS Work proportion undertaken by GP less than 50% of total cost of scheme in the district TheReasons for higher rationing: Larger proportion of existing demand Low institutional capacity to administer scheme Low awareness and empowerment levels Weak PRIs xt Wage payments often less than notified wage Delay in payments past 15 day limit huge disincentive Continued cash payments due to poor bank and post office coverage (mandatory to use the same for wage transfer apart from cash) Muster rolls filling and maintenance discrepancies Large leakages in Odisha, Jharkhand, Chhattisgarh No irregularities in AP, HP, less in Rajasthan Use of contractors and machinery which is prohibited Payments to fictitious/ghost workers Proactive disclosure and social audits performed irregularly Karnataka, MP, Rajasthan AP innovative steps for institutionalizing accountability tools into the governance system Ineffective grievance redressal Concerns regarding accuracy of Management Information System (MIS) and Monthly Progress Report Data

Best managed NREGA programmes

Systems working in the field Delivery of entitlements Good officers in charge High political commitment

Andhra Pradesh
Good quality lower level field staff Use of mandals Institutionalized social audit process through autonomous state unit Good Management Information System (MIS) designed by TCS

Rajasthan
Considerable experience of draught relief programmes Pioneered concept and use of RTI and social audit through Mazdoor Kisan Shakti Sangathan (MKSS) Leading state of work provided; womens employment; number of families completing 100 days 2nd generation problems maintaining pipeline of suitable works; work quality by enhancing convergence with other departments

Low political commitment to the programme

Weaker systems

Significant leakages upto one-third to half of the stipulated wages

Orissa
Leakages Attributed to state Government. No dedicated POs but give additional charge to BDOs Ahead of most states in conducting monthly reporting MIS

Jharkand
Poor no system of elected panchayats Beneficiary committees that tend to get hijacked by contractors Regular staff reluctant to hand over responsibilities to newly hired workers SOR yet to be finalized

UP
Employment picking up after introducing minimum Rs.100 wage Women participation remains low- 14%

Improve the ecological balance Strengthen the positive synergy between MGNREGA and agriculture and allied rural livelihoods

Respond to the demands of the States for greater location-specific lexibilityin permissible works

Effective planning - Strict Time schedule Deployment of Human resources Reducing delays in wage payments Strengthening MIS

Ensuring the Demand-based Character

Greater role for civil society organizations Better social audits Transparency and accountability Limitations on administrative expenses

Recommendations

Equal Opportunity for vulnerable groups