NREGA 2005: Towards Changing Face of Development By Ashok Pankaj (Senior Fellow) Institute for Human Development Delhi 12th October 2010 Johannesburg

Why NREGA and Why in 2005? Economic; Political and Constitutional Contexts of NREGA: 1.Economic: Skewed growth and lopsided development in the liberalisation phase (a)Jobless growth: disjunction between growth in GDP and employment (b)Income without distribution: high growth rate in GDP per capita with poor distribution Consequences: a)Rising personal (income), sectoral and regional inequality in the reform phase b)Issue of sustainability of the growth rate Why in 2005? Answer lies in political contexts 2. Political Contexts: (a)Voting out of “India Shining” ( BJP-led NDA govt.) in 2004 parliamentary elections (b) Voting out of icons of reform: Chandra Babu Naidu in Andhra Pradesh and SM Krishna in Karnataka (Voted out by the rural voters)

Cont. 3. Constitutional Contexts: Implicit and Explicit Provisions: (a)Article 21: right to live and liberty:-- Right to life includes right to livelihood, as laid down by the Supreme Court of India in Olega Tellis Vs. Mumbai Municipal Corporation case. (b) Artcile 39 (a): “ … right to livelihood..” (c) Article 41: right to work (d) Preamble of the Constituion: “ …to secure to all its citizens: justice, social, economic and political…”.

Objectives of the Act ? (a)Primary Objective: To provide a minimum livelihood (income) security to the rural households The Act states: “To provide for the enhancement of livelihood security of the households in rural areas of the country by providing at least one hundred days of guaranteed wage employment …” (b) Secondary objectives: To reduce distress migration; Creation of durable community assets in rural areas; Invigorating civic and community life and enlivening of PRIs; Empowerment of rural women; Overall development of the rural economy; Promotion of inclusive growth and development; and Multiplier effects on the economy.

Different from the Erstwhile Employment and Public Works Programme Main deficiencies in the erstwhile programmes: Schemes formulated and implemented by the bureaucracy; Little involvement of the local community in selection and implementation; Centralized character; Absence of social monitoring; Wastages of resources, leakages and corruption; Supply-driven scheme, i.e. employment on the basis of supply; Inadequate employment generation; Inability to provide minimum livelihood security; Cheating and delay in wage payment; Lack of amenities to workers; Low participation of women; Employment opportunities inflexible to workers’ demand.

NREGS: Five major departures from the erstwhile employment programmes 1.Originates from an Act of Parliament; others from executive fiat. 2. Irreversible and can be terminated only by another Act of Parliament. 3. Primary objective to provide minimum livelihood security than to generate rural employment and community assets. 4.Overall thrust on entitlement to: a)Income b)Workers rights (minimum wages and compensation) c)Working conditions (four facilities at worksites) 5. The first major experiment in decentralized participatory development through institutions of local governance (PRIs).

How is it working?: Mixed results: Points to celebrate: 1. Massive scale of coverage: Entire rural population; more than two-thirds of the total population of India; and in states like Bihar 90 % of the total population More than 50 million households are availing ( more than the population of many countries) Community assets created in almost every village in one stroke. (.65 million villages in India)

Snapshot of employment generation 1 Employment generated and provided No. of HHs provided employment in million Average persondays per HH % share of SC population % share of ST population % share of other population % share of women

Cont. 2. Well-targeted through self targeting a) Most of the beneficiary households are traditionally marginalised, economically vulnerable and most deserving candidates for any social protection measure

Land category-wise Distribution of Benefited Households BiharJharkhand Landless > 0.5 acres to 1 acres to 2.5 acres to 5 acres to 10 acres Above 10 acres00

Occupation-wise Distribution of Benefited Households BiharJharkhand Self-employed in agriculture Casual labourers in agriculture Casual labourers in non- agriculture Self-employed in small business Self-employed in large business/Salaried Others Total100

cont. 3. Providing Income Security

Cont. Various sources of Income and share of NREGS Various Sources of HH Income Dairy 1% Non-agriculture wages 45% Agriculture wages 11% NREGA 19% Sale of Fruits and vegetables 0% Sale of agricultural products (grains) 2% Rent of any type 0% Others 13% Old age/ widow pension 0% Other pensions 2% Remittances 7%

Contribution of NREGS in total Income of the HH Various Sources of Earnings (share in %) DungarpurGayaKangraRanchi Total Agricultural wages Non-agricultural wages Sale of agricultural products Dairy Sale of fruits and veget Rent of any type Old age/ widow pension Other pension Remittances received Others NREGA

4. Food security and consumption effects Consumption items(per cent) DungarpurGayaKangraRanchiTotal Food grains Other food items Liquor Education Fuel and fodder Medical expenses Transport and communication Clothes Recreation Loan repayment Savings / lending Marriages/Social ceremonies Household durables Land and other productive assets00000 Cattle Others

Cont. 5. Decrease in indebtedness 6. Reduction in distress migration B. Macro level effects: Economic: 1.Impact on rural wages and labour market 2.Increased rural infrastructure 3.Increased productivity of small and marginal farmers due to land development and increased irrigation capapcity 4.Multiplier effects greater Social: 1.Women’s empowermrent 2.Strengthening of the participatory development process 3.Transparency, accountability becoming part of the public works programme

Difficulties and challenges 1.Realization of low persondays 2.Regional variations in implementation 3.Yet to become fully demand based 4.Quality of assets in some cases 5.Non-fulfilment of others entitlements 6.Low level of quality awareness 7.Poor capapcity of local institutions in some states

Prospects 1.Right to work has entered into the imagination of the common man 2.Complete political consensus 3.Resource constraint is no longer an argument 4.Civil society playing very active role

Thanks!