Impact of MGNREGA on the Economic Well – Being of Unskilled Workers: Evidence from Puducherry Region
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Pacific Business Review International Volume 6, Issue 10, April 2014 Impact of MGNREGA on the Economic Well – being of Unskilled workers: Evidence from Puducherry Region Abstract India is the second largest country after China in terms of population and man- power. The haunting problem of unemployment is not confined to any particular class, segment or society as massive unemployment exists among educated, well-trained and skilled people as well as among semi-skilled and unskilled labourers, landless labourers, small and marginal farmers etc. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) Dr. R. Azhagaiah is an Indian law that aims to guarantee the 'right to work' and ensure livelihood Project Director security in rural areas by providing at least 100 days of guaranteed wage [ICSSR Major Research Project] employment in a financial year to every household whose adult members Kanchi Mamunivar Centre for Postgraduate volunteer to do unskilled manual work. The present study examines the economic empowerment and well being of the rural poor in Karaiyamputhur / studies (Autonomous) Panayadikuppam villages of Puducherry Union Territory. The survey was [Centre with Potential for Excellence by UGC] conducted by use of interview schedule and data were collected from 323 Government of Puducherry beneficiaries of MGNREGA of the selected villages. The study reveals that Lawspet, Puducherry there is a significant increase in the welfare of the family for both male and female workers in respect of spending more for family, children's education and enables them to save in bank / post office after working under MGNREGA. However, the economic well being will be improved still better if 100 days of employment in a year is provided to them. Keywords: BDO - Block Development Officer, BPL - Below- Poverty line, CAI - Composite Achievement Index, DPC - District Programme Coordinator, G. Radhika DRDA - District Rural Development Agency, HH – Households, MGNREGA Research Assistant – Mahatma Gandhi National Rural Employment Guarantee Act, MIP - Minor [ICSSR Major Research Project] Irrigation Project, NREGA - National Rural Employment Guarantee Act, NREGP - National Rural Employment Guarantee Programme, NREGS - Kanchi Mamunivar Centre for Postgraduate National Rural Employment Guarantee Scheme, PDS - Public Distribution studies (Autonomous) System, PEO - Panchayat Executive Officer, PO - Programme Officer. [Centre with Potential for Excellence by UGC] Government of Puducherry JEL classification I38, O12, R28, Z18 Lawspet, Puducherry Introduction Ever since India became independence, one of the major challenges before successive governments has been provision of adequate remunerative employment to the vast majority of rural workers who have been unemployed, or mostly underemployed, in meagre subsistence livelihood activities. The serious problem of unemployment is not confined to any particular class, segment or society as massive unemployment prevails among the educated, well-trained and skilled people as well as among the semi-skilled and 01 w w w. p b r. c o . i n Pacific Business Review International unskilled labourers, landless labourers, small and marginal of poverty in the rural India. It provides a legal guarantee of 100 farmers etc. Unemployment or under-employment is a very days of wage employment in a financial year to every rural complex problem mainly in the rural areas when compared to household whose adult members volunteer to do unskilled manual urban areas, which poses a great challenge to planners, work at the minimum wage rate notified for agricultural labour economists, politicians, industrialists as well as educationists. prescribed in the State or else an unemployment allowance. The objective of the Act is to supplement wage employment There has been an increase in unemployment and opportunities in rural areas and in the process also build up durable underemployment in India as India is the second largest country th assets. The Act was notified on 7 September 2005 and after China in terms of population and manpower, much of the little commenced in 200 Districts from 2nd February 2006 and extended growth witnessed has been in the informal sector bearing with to 130 more Districts from 1st April 2007. The Act has been formal public sector employment showing a declining trend. These extended further to 266 Districts with effect from 1st April 2008. developments have evoked considerable public concern in India Presently, MGNREGA is being implemented in all the notified and the 'right to work' surfaced as an important political agenda. rural areas of the country. The scheme of 100 days employment The Common Minimum Programme of the UPA government covers 644 districts and 6576 blocks all over India in 2013- 2014 (2004) placed right to work as top priority. (see figure –A). Total number of workers in job cards and total of The National Rural employment Guarantee Act 2005 (NREGA) is households (HH) registered (in crores) is 28.1 and 12.8 all over a landmark initiative in the history of poverty reduction strategies India in 2013- 2014. in India. It provides unskilled poor work to address the worst form w w w. p b r. c o . i n 02 Volume 6, Issue 10, April 2014 To provide administrative and technical assistance to panchayat Other entitlements in terms of provision of minimum facilities bodies, the District Collector has been designated as the District at the worksite, medical treatment and compensation in the Programme Coordinator (DPC) and he / she is responsible for event of injury at work, unemployment allowance if work is overall planning, implementation, coordination and monitoring of not provided etc. the NREGS at the District level. At the Block level, the Block Bottom up planning for works and their implementation. Development Officer (BDO) has been appointed and designated as Programme Officer (PO). He / she is responsible for planning, A well designed institutional network for implementation and implementation, coordination and monitoring of the scheme at the monitoring that includes Central and State level councils, Block level. The Panchayat Executive Officer (PEO) assists the Panchayati Raj institutions, and government administration at village Panchayat. In addition, there are Line Departments like different levels and people's organizations. Forest, Soil Conservation, Minor Irrigation Projects (MIP) and Provision of regular fund flows and Sericulture to assist the administration in carrying out their plans and works under the NREGS. Social auditing of the scheme to ensure transparency and Key Features of the MGNREGA accountability. Planning, Implementation and Funding Time bound guarantee of 100 days of work at a stipulated minimum wages to each household that demands unskilled Figure - C depicts the processes and agencies involved in planning, manual work as well as payment of an unemployment implementation and funding of works under the MGNREGA. allowance, which will be one third of the stipulated minimum wages, in the event if the work is not provided in time. Figure – C Planning, Implementation and Funding Agencies of MGNREGA Source: http://www.ifmr.co.in/blog/2013/05/08/an-overview-of-the-features-of-the-mahatma- gandhi-national-rural-employment-guarantee-act-2005/ 03 w w w. p b r. c o . i n Pacific Business Review International Review of Literature study are four villages under Seoni and Keolari Blocks in the Seoni district of Madhya Pradesh. 56 sample respondents were chosen Jha et al. (2009), in a paper titled “Capture of Anti-Poverty for the study, i.e. those labourers who have completed 100 days of Programs: An Analysis of the National Rural Employment work as per the Act and farmers who own vast starches of land were Guarantee Programme in India” used pooled household level data included in the study. The study proved that private wage rate has for the states of Rajasthan and Andhra Pradesh (India), and found increased; the relation between farmers and labourers was changed that the size of landholdings is a negative predictor of participation and the agriculture pattern has also been changed due to the in the National Rural Employment Guarantee Programme implementation of MGNREGA. (NREGP). In state level analysis, this pattern survives in Rajasthan but reverses in Andhra Pradesh where they observed a positive Azam (2012), in a research paper titled “The Impact of Indian Job relationship. They also examined whether the sign reversal in Guarantee Scheme on Labour Market Outcomes: Evidence from a Andhra Pradesh is indicative of programme capture in Andhra Natural Experiment” assessed the causal impact (Intent-to-Treat) Pradesh and better targeting in Rajasthan. The study compared of NREGA on public works participation, labour force land inequality, ratio of NREG and slack season agricultural wage participation, and real wages of casual workers by exploiting it's rates, political interference, and geographical remoteness across phased implementation across Indian districts. Using nationally the two states and concluded that the programme captured in representative data from Indian National Sample Surveys (NSS) Andhra Pradesh largely. The study also found evidence of and Difference-in-Difference framework, the study found that complementarily between NREGP and the Public Distribution there was a strong gender dimension to the impact of NREGA. It System (PDS), implying that the real income transfer through food has a positive impact on the labour force participation and the subsidy needs