THE SIGNIFICANCE AND LIMITATIONS OF INDIA’S NATIONAL RURAL
EMPLOYMENT GUARANTEE ACT IN ADDRESSING RURAL POVERTY
Smita Gupta
The post-1990s are marked by the pursuit of neo-liberal policies:
Deflationary macroeconomic policies and falling public development expenditure as pc of GDP on public works, employment generation, rural infrastructure, social services, etc.
Trade liberalization with farmers loosing protection against international price fluctuations
Structural Adjustment Policies resulting in higher input costs and withdrawal of the state from credit, extension services, procurement, price support and infrastructure.
An unparalleled and comprehensive crisis took firm root in rural India, resulting in peasant suicides, starvation deaths, impoverishment, and hunger.
RURAL CRISISGrowing unemployment and underemploymentFalling purchasing powerDeclining per capita availability of foodgrainsReduced farm incomes and real wage growthIndebtedness and land alienation, esp. for small and marginal farmers. Deceleration in agricultural growth, productivity per worker and rural non-agricultural employment growthSlackening pace of poverty reduction and worsening poverty amongst marginalized social groups and ethnic minorities
The distress resulted in electoral defeat for the NDA Government at the Centre, and the UPA government promised to enact the National Rural Employment Guarantee Act, which has the potential of turning around the agrarian distress.
However, forces within the government itself opposed a full-fledged employment guarantee and produced various diluted and inadwquate versions of the Draft Act
Interventions by Left parties and pressure from mass organizations, social movements, and NGOs resulted in the successful enactment of an improved guarantee.
Broadly speaking, three different positions are taken on NREGS:
• Left-Keynesian: it is both desirable and feasible for broad-based equitable growth to revive agriculture and the rural economy by the creation of productive assets and the multiplier effects of demand expansion in a situation of excess capacity, unemployment and idle resources.
• Neo-liberal: It is neither desirable nor feasible on the grounds of non-affordability, corruption, and preference for human capital and infrastructure-led growth models.
• Liberal: it is the ‘human face’ of globalization, a kind of ‘social safety net’ which is desirable but feasible only under very restricted conditions of fiscal discipline.
The Employment Guarantee Act is a step towards the right to work, as an aspect of the fundamental right to live with dignity
It is a recognition that the state cannot retreat from rural development and is responsible to ensure food and livelihood security for the masses
The neo-liberal state had begun to intervene more and more aggressively against the poor and rural India. The NREGA is a recognition that the state cannot retreat from pro-poor development and is responsible to ensure food and livelihood security
The National Rural Employment Guarantee Act 2005 is a law whereby any adult who is willing to do unskilled manual work at the minimum wage is entitled to being employed on local public works within 15 days of applying, with a guarantee of 100 days of unskilled manual work per household per yearCurrently it covers half of rural India, to be extended to the rest within 4 years
NREGS is a “demand driven” programme and employment is to be provided to eligible workers on demand, within 15 days.
Step 1 RegistrationStep 2 VerificationStep 3 Issuing Job CardsStep 4 Application
Unemployment allowances If Employment is not provided within 15 days of receipt of application, the worker shall be entitled to a daily
Unemployment allowance(7(1)) Rates (7(2))
For First 30 days
For the remaining period of the Financial year
Employment wage + Unemployment
allowance
One fourth of the wage rate.
Not less than one half of the wage rate
Equal to the wages for 100 days of work in a financial year (7(3d))
Minimum Wage
A person working for 7 hours would normally earn a wage equal to the wage rate(SchI(8))
Minimum wage fixed by the state Government under the minimum wage Act,1948;
Centre may fix wages, at not less than Sixty rupees per day (6(1))
The Act permits productivitylinked wages under piece rate, with due protection
Mandatory Worksite Facilities for laborers Safe drinking water
Shade for children and periods of rest
First-aid Box for emergency treatment and minor injuries
Depute one woman worker to look after five or more children below the age of six years of women laborers at the wage rate
Permissible works in order of priority(SchI(1)) water conservation; drought proofing ; irrigation canals including micro and minor irrigation
works; provision of irrigation facility to land owned by
households belonging to the SCs and STs or to land of land reforms and Indira Awas Yojana beneficiaries;
renovation of traditional water bodies; land development; flood control and protection works; rural connectivity to provide all-weather access; and any other work which may be notified by the Central
Government in consultation with the State Government.
OUTCOMES [field reports]
Reduction in distress out-migration due to availability of additional income and work
creation and repair of rural infrastructure like roads and water bodies
Retention of children in school and purchase of books for them
Greater interest in local area development due to flow of funds and village meetings
Changing local dynamics in many places with the recognition by workers that they are right holders
Expansion in membership and activities of workers’ and peasant organizations
NREGA and Poverty ReductionPotential: NREGA holds a huge promise for poverty reduction with a supplementary average annual household income of Rs 6000. for this, wages, work days and aggregate expenditure on the Scheme should be high if the Programme has to make any significant dent on poverty. Creation of social and economic infrastructure too would go a long way in reducing poverty.
Experience: The poverty reducing potential is severely undermined through:non-recognition of eligible persons as right holders; inability to make claims due to imposition of a host of arbitrary and discretionary eligibility conditions; non-fulfilment of entitlements guaranteed under the Act, in particular days of work and wages;restrictions on the nature of permissible works;absence of work in the most food-deficit rainy season due to focus on manual labour and earth works
CURTAILMENT OF ENTITLEMENTS
A. Definition of HouseholdOn the basis of common kitchen not nuclear family, number of eligible workers per household >3This reduces per capita entitlementsDisenfranchises female headed households and widowed/separated/estranged married daughters in natal and marital homes
B. Exclusion of Eligible PersonsElderlyMigrantsLack of documentary evidence not required by the lawDivorced/widowed/separated women in natal/marital homes as separate nuclear households
Percentage Rural Households Issued Job cards
0.00
10.00
20.00
30.00
40.00
50.00
60.00An
dhra
Pra
desh
Arun
acha
l Pra
desh As
sam
Biha
r
Chha
ttisg
arh
Guj
arat
Hary
ana
Him
acha
l Pra
desh
Jam
mu
& Ka
shm
ir
Jhar
khan
d
Karn
atak
a
Kera
la
Mad
hya
Prad
esh
Mah
aras
htra
Man
ipur
Meg
hala
ya
Miz
oram
Naga
land
Oris
sa
Punj
ab
Raja
stha
n
Sikk
im
Tam
il Na
du
Trip
ura
Utta
r Pra
desh
Utta
ranc
hal
Wes
t Ben
gal
All I
ndia
States
Perc
enta
ge
C. Non-payment Of Minimum Wages Workers are earning no more than 40 to 60 per cent of minimum wage, ranging from Rs 16 to Rs 40 per day
Due to unrealistically high work norms under productivity linked piece rates; Inadequate identification of the component tasks;
No differentiation for the elderly, women and ecology;
Administrative inadequacies in task specification, soil identification, lift and lead provision, measurement, both in terms of procedures and adequacy of staff
D. INADEQUATE WORK GENERATION DUE TO
RIGIDITIES IN PERMISSIBLE WORKS AND
ADMINISTRATIVE INADEQUACIES
Work Days Per Registered Household
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00An
dhra
Pra
desh
Arun
acha
l Pra
desh As
sam
Biha
r
Chha
ttisga
rh
Guja
rat
Hary
ana
Him
acha
l Pra
desh
Jam
mu
& Ka
shm
ir
Jhar
khan
d
Karn
atak
a
Kera
la
Mad
hya
Prad
esh
Mah
aras
htra
Man
ipur
Meg
hala
ya
Mizo
ram
Naga
land
Oris
sa
Punj
ab
Raja
sthan
Sikk
im
Tam
il Nad
u
Trip
ura
Utta
r Pra
desh
Utta
ranc
hal
Wes
t Ben
gal
All I
ndia
States
Wor
k Day
s
E. INADEQUATE WORKSITE FACILITIES
F. NON-PAYMENT OF UNEMPLOYMENT ALLOWANCE OR COMPENSATION
All these combine to result in
G. UNDERUTILIZATION OF FUNDS AND LOW EXPENDITURE
Financial Performance During 2006-07
0
20
40
60
80
100
120A
ndhr
a P
rade
sh
Aru
nach
al P
rade
sh
Ass
am
Bih
ar
Chh
attis
garh
Guj
arat
Har
yana
Him
acha
l Pra
desh
Jam
mu
& K
ashm
ir
Jhar
khan
d
Kar
nata
ka
Ker
ala
Mad
hya
Pra
desh
Mah
aras
htra
Man
ipur
Meg
hala
ya
Miz
oram
Nag
alan
d
Oris
sa
Pun
jab
Raj
asth
an
Sik
kim
Tam
il N
adu
Trip
ura
Utta
r Pra
desh
Utta
ranc
hal
Wes
t Ben
gal
All
Indi
a
States
Per
cent
age
Exp
endi
ture
aga
inst
Tot
al A
vaila
ble
Fund
s
CONCLUSION
• Teething trouble apart, the same forces of fiscal conservatism that earlier tried to dilute the Act are now trying to curtail entitlements and minimize expenditure
• However, the NREGA offers an unprecedented opportunity to initiate broad-based growth through poverty reducing employment generation and consequent demand expansion
• Therefore, the recent reports of mobilization and struggles by rural workers for the full and proper implementation of the NREGA is good news!