The National Rural Employment Guarantee Scheme

The NREGS, implemented in August 2005, aims to provide ‘livelihood security’ to the rural poor by making available to them at least 100 days of guaranteed wage employment each year. Statutory minimum wages are paid in return for unskilled manual work in creation of public assets. It recognises employment as a legal and enforceable right, which is a huge step forward in the expansion of what we regard as basic and fundamental rights.

The great significance of NREGS comes from its potential in poverty reduction, creation of public assets in rural areas, crowding-in private investment to boost the rural economy and ensuring food security to the rural poor (which is especially relevant in the current scenario of rising food prices and declining per capita food availability). By providing guaranteed employment, it focuses on an entitlement approach to livelihood as opposed to simply doling out assistance. It is also a catalyst for public asset creation and rural development through infrastructure development. In many backward areas, private investment is low because basic infrastructure is missing. This can be remedied by NREGS, as it is an employment guarantee focused on asset-creating works that are labour-intensive. Thus it can deal with the problems of unemployment, rural development and agricultural growth simultaneously.

Even as the NREGS has huge implications for the development process as a whole, it suffers from some serious bottlenecks. There is widespread lack of transparency in issuance of and details filled in job cards, details filled in muster rolls etc, as also delays in providing jobs to those who have applied for them (i.e. beyond 15 days of applying), payment of wages less than the stipulated minimum, and lack of unemployment allowance to those who haven’t been granted work. In fact, in all states except Tamil Nadu, workers have been paid less than the statutory minimum wage. There has also been observed a general bias against women and the aged on account of the ‘hard manual work’ entailed in jobs given under the NREGS. There are widespread delays in wage payments to the workers, the delay at times being several months. Stoppages in work occurring due to rains etc lead to wages not being paid for weeks at a time. Since the poor typically have low household incomes and thus spend frequently, these delays may severely impact levels of consumption by drying up liquidity.

There are other complications as well, an example being the ambiguity about the definition of a household. Under the Act, each household can have a maximum of one job card. However, many gram panchayats treat joint families as households, rendering one job card insufficient to meet the needs of several family members. The NREGS has also been criticised for not addressing the concerns of the educated unemployed for whom the unskilled nature of works holds no relevance. It is also considered incapable of meeting the entitlement needs of people in the event of a disaster which may destroy assets and push many people hitherto beyond the ambit of the NREGS to seek employment immediately.

Lastly, maybe the most pertinent concern regarding the NREGS is the lack of co-ordination between different agencies responsible for its implementation. NREGS is a decentralised scheme, involving the centre, the state and the village level institutions, the gram panchayats being the chief implementing agencies. Lack of strong Panchayati raj institutions (PRIs) and their lack of connect with the governments leads to inefficiencies and limited success of the scheme.

To ensure the success of the NREGS it is important that there is greater accountability of the various processes which take place as part of its implementation. A way forward could be to strongly integrate the NREGS with the Right to Information Act (RTI Act), so that stakeholders may demand details regarding wage levels, delivery mechanisms, issuance of job cards etc without being misled. Many of the other problems arise mainly because of the lack of a suitable overseeing mechanism and the absence of a Grievance Redressal Mechanism (GDM). Not only do such structures as the GDM need to be effectively established, greater staffing is required.

To address the problem of a lack of efficiency at the grassroot level, it is important that civil society organisations (CSOs) and NGOs work with the PRIs and the government to not only improve transparency (through audits, independent research etc) but also providing logistical support to PRIs for NREGS implementation. The disconnect between the government and the PRIs has to be resolved. One way of achieving this could be an increase in the intermediaries between the state government and the gram panchayats i.e. the gram rozgar sevak, of which states currently provide only one each.

To evaluate the effectiveness of such solutions on the performance of the scheme, various parameters may be used. Pinaki Chakraborty uses the following variables to measure the success of NREGS:

1) Employment Guarantee (EG) enrolment as a percentage of total number of rural households.

2) Employment Guarantee (EG) enrolment as a percentage of application for enrolment i.e. Issuance of a job card.

3) Employment Guarantee (EG) provisioning as a percentage of number of houses enrolled.

While the first ratio will show the effect of reforms in NREGS on the level of demand for NREGS work (demand increasing if NREGS becomes better managed), the latter two show the supply response of the implementing agency. The second and third measures respectively show the suppliers response to demand for enrolment for employment guarantee and the suppliers’ response to demand for employment vis-à-vis enrolment. If the solutions suggested do make a difference, it would be reflected in an increase in all three measures/ratios.

Thus the NREGS is an ambitious scheme with plenty of potential in the growth and development arena. Despite some of its shortfalls, its possible impact on Indian society is huge, and may even be called revolutionary. Considering that it is an entitlement based approach aiming to smoothen consumption and provide security, there is a strong case for implementing it throughout the country.

Arjun Upmanyu

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