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AN ANALYTICAL STUDY ON IMPACT OF MGNREGS

ON AGRICULTURAL LABOUR SUPPLY OF

KOZHIKODE DISTRICT

Minor Research Project Report

Submitted to the University Grants Commission, New Delhi

In partial fulfillment of the requirements for the

Completion of Minor Research Project

By

MUHAMMED SALIM. K.C Assistant Professor

POST GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE

GOVT. COLLEGE MADAPPALLY

VADAKARA-2

KOZHIKODE

DECLARATION

I hereby declare that the project report entitled “AN ANALYTICAL

STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR

SUPPLY OF KOZHIKODE DISTRICT” is a bonafide Minor Research Project

work done by me and I further declare that this report has not been submitted

anywhere for the award of any degree or other recognition.

Madappally Muhammed Salim. K.C

Date:

CERTIFICATE

This is to certify that Minor Research Project titled “AN ANALYTICAL

STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR

SUPPLY OF KOZHIKODE DISTRICT” is an original work done by

Muhammed Salim. K.C, Assistant Professor, Post Graduate and Research

Department of Commerce, Govt. College Madappally. He is permitted to submit

the report to University Grants Commission.

Place: Madappally Principal

Date:

Acknowledgement

I am very happy with completion of this project work and for me it is a great

achievement. I am indebted to many people for their immense help and support for

the completion of this work. With these few word officially I can convey my thanks

but I cannot convey the depth of my gratitude to all those who helped me a lot.

I express my sincere thanks to the Principal, Govt. College Madappally and

my gratitude to Head of the Department and all the other colleagues in the Post

Graduate and Research Department of Commerce for their cooperation and

valuable suggestions.

I am indebted to the University Grants Commission very deeply for

sanctioning this project and allotting fund for the research work.

I express my thanks to all my Post Graduate students who were always with

me for all the assistance while conducting this study.

Moral and mental support from my family including my parents, wife and

children were inevitable for the completion of this task otherwise I could not be able

to complete this work in time.

Moreover I am very thankful to the god almighty for giving health and

strength to complete this work successfully.

Muhammed Salim. K.C

Abstract

Mahatma Gandhi National Rural Employment Guarantee Act is a flagship

programme of central government of India for eradicating poverty from Indian

economy. Around 60 % Indian population is living rural area and most of them are

suffering from severe poverty and unemployment. National Rural Employment Act,

2005, enacted on 25th August 2005. NREGA is a first in its kind, passed by

Government of a nation in the world. This Act guarantees 100 days employment for

rural unemployed mass willing to do unskilled manual work. The act came into

force from February 2006 initially in 200 backward district of the nation and then it

extended to all rural districts of India in two other phases. The Act was initially

called National Rural employment Guarantee Act (NREGA) later renamed as

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in

2009. Some challenges of Indian economy even today are Poverty, Development of

rural India and Building infrastructure. Country need to invest more in health and

education of the growing population. Human capital is the biggest asset of India but

we don’t have that much opportunity to exploit this strength and this less

employment opportunity contributing more on poverty of the economy.

MGNREGA is the most significant movement from Central Government of

India after Independence and it ensured grass root level participation of every

citizen of India. Act ensures selection of beneficiaries through a democratic process

and a multiple layer social audit and transparency mechanism to keep the proposed

objectives. Planning of work under MGNREGA at village level contribute more on

sustainable and equitable development of villages. Another achievement of this

programme is that it has caused for the improvement in quality of life of rural

household who were migrating to cities for the search of employment, by

channelizing rural workforce towards developmental activities at own village level.

Beneficiaries enrolled to this programme mostly are unskilled rural mass

who were jobless or working in agricultural sector before joining into this scheme.

As far as State of Kerala is concerned market wage rate has been more than double

of the wage guaranteed by MGNREGA always. Hence enrollment rate of males are

very less if we are comparing with rate of females. While making an analysis on the

personal profile of those who enrolled in to this scheme it shows that most of the

male members joined into this scheme are not capable to do job which require heavy

efforts. Female members who do not have regular employment are also enrolled to

this scheme. This study try find out the positive and negative impact of MGNREGA

on the agricultural labour supply of Kozhikode district, Kerala. MGNREGA does

not permit any direct involvement in agricultural related work or work they are

repetitive in nature. Under a descriptive research framework, through rigorous

statistical procedure on the multiple responses of workers and farmers, the study

was able to make out prolific finding relevant to future of MGNREGA and its

impact on the agricultural labour supply. Study reveals that programme has not

affected to the supply of labourers into the agricultural sector but in case of female

workers there is small shortage because they prefer to work under MGNREGA

when the works are available. It is found that the scheme have big role in the

eradication of poverty in rural area and it has caused for the social and economic

empowerment of women who enrolled into the programme. Beneficiaries have

certain complaint on the delay in transfer of wages, non-availability of guaranteed

days of employment and other procedural delay in the operational side of the

programme.

Contents

Chapters Page No

Chapter 1 Introduction 1-14

1.1 Introduction of the study

1.2 Origin of research Problem

1.3 Significance of the research study

1.4 Scope of the study

1.5 Objective of the research study

1.6 Definition of terms used

1.7 Hypothesis

1.8 Research Design

1

2

3

6

6

7

10

10

1.8.1 Source of Data

1.8.2 Tools used for Survey

1.8.3 Survey Area

1.8.4 Measurement Variables

1.9 Sampling Design 12

1.9.1 Population for study

1.9.2 Sample size

1.9.3 Sample frame and selection of samples

1.10 Period of reference

1.11 Tools for Data Analysis

1.12 Limitations of the study

13

14

14

Chapter 2 Review of Literature 15-25

2.1 Introduction

2.2 Literature review

2.3 Summary

15

15

25

Chapter 3 Rural Employment Guarantee Schemes in India- An Overview

26-70

3.1 Introduction

3.2 Employment Generating Programmes Implemented in India

26

29

3.2.1 Self-employment programmes in India

3.3 Wage Employment Programmes in India

3.4 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

36

40

3.4.1 Objectives of MGNREGA

3.4.2 The Salient design features of MGNREGA

3.4.3 Funding Pattern of MGNREGA

3.4.4 Qualifications for employment and rights of workers under the Act.

Chapters Page No

3.4.5 Implementing and monitoring agencies of the scheme.

3.4.6 Performance of MGNREGA

3.5 MGNREGA in Kerala 59

3.5.1 Unemployment in Kerala

3.5.2 Performance of MGNREGA in Kerala

3.6 MGNREGA and Kozhikode District 69

Chapter 4 Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District

71-93

4.1 Introduction

4.2 Data Analysis

71

72

4.2.1 Age analysis of the respondents

4.2.2 Gender wise age analysis of the respondents

4.2.3 Religion and Cast analysis of the respondents

4.2.4 Educational qualifications of the respondents

4.2.5 Marital status of the respondents

4.2.6 Year of enrollment to MGNREGS

4.2.7 Occupation of the respondents before enrolling into MGNREGA

4.2.8 Source of worker’s income other than MGNREGA

4.2.9 Annual family income of the respondents

4.2.10 Contribution of MGNREGS wage to individual income of respondents

4.2.11 Market wage rate analysis

4.2.12 Relationship between increase in MGNREGA wage and increase in rural average agriculture sector wage

4.2.13 Preference of Agricultural labour over MGNREGA

4.2.14 Social inclusion of MGNREGA workers

4.2.15 Economic empowerment of MGNREGA workers

4.2.16 MGNREGA and financial inclusion of rural women

4.2.17 Problems faced by MGNREGS workers

4.2.18 Improvements in MGNREGA expected by the workers

4.3 Conclusion 92

Chapter 5 Finding, Policy Recommendation and Conclusion 93-101

5.1 Introduction

5.2 Findings

5.3 Policy Recommendations

5.4 Conclusion

5.5 Contribution of the study

5.6 Scope of further research

93

93

97

100

101

101

Bibliography

Appendix

102-105

106-110

List of Tables

Table

No. Particulars

Page

No.

1.1 Detailed description of survey area 11

3.1 Employment Growth in India (in Million) 27

3.2 Growth of unemployment in India 27

3.3 Details of assistance granted and beneficiaries of IRDP 30

3.4 Details of assistance given and performance of TRYSEM 31

3.5 Financial details of DWCRA 32

3.6 Financial analysis of SITRA 33

3.7 Performance analysis of MWS 34

3.8 Expenditure and benefits details of SGSY 35

3.9 Phases of MGNREGA implementation 41

3.10 Implementation process in Kerala 41

3.11 Steps of Indian Journey towards MGNREGA (1952-2009) 42

3.12 Multiple Goals of MGNREGS 46

3.13 Major Changes in MGNREGA (2006-2014) 47

3.14 Notified Wage and its enhancement from 2006 to 2014 (Rs. /Day)

51

3.15 Coverage of MGNREGA at a glance 55

3.16 Financial analysis of MGNREGA at a glance (Rs.in CR) 55

3.17 Employment creation by MGNREGA at a glance (in lakhs) 56

3.18 Performance analysis of MGNREGA 57

3.19 Demographic profile of Kerala State 59

3.20 Work profile of Kerala population 60

3.21 District wise details of Unemployment in Kerala 62

3.22 Demand for Employment in Kerala from 2001-2011 (in Lakh) 63

3.23 Job Cards Issued in Kerala under MGNREGA 64

3.24 Details of work demanded and provided in Kerala under MGNREA

65

3.25 Employment provide on demanded under MGNREGA in Kerala

66

Table

No. Particulars

Page

No.

3.26 Generation of employment in Kerala under MGNREGA 67

3.27 Households completed guaranteed number of employment 67

3.28 Financial Analysis MGNREGA in Kerala 68

4.1 Age group of respondents 72

4.2 Gender wise classification of respondents and their age group 73

4.3 Religion wise classification of the respondents 74

4.4 Cast wise classification of the respondents. 74

4.5 Educational qualification of respondents 74

4.6 Marital Status 75

4.7 Year of enrollment in MGNREGS 76

4.8 Occupation wise classification of the respondents 77

4.9 Source of Income other than MGNREGA 78

4.10 Annual family incomes of the respondents. 79

4.11 Worker’s contribution to Total Family income 79

4.12 Contribution of MGNREGA wage to individual income 80

4.13 Average Market rural agricultural sector wages in Kozhikode District

81

4.14 Comparison of % increase in MGNREGA wages and % increase in rural agricultural wages

82

4.15 Willingness to accept agricultural employment, when MGNREGA scheme is not active

83

4.16 Preference of agricultural sector job over MGNREGA 84

4.17 Reasons for preferring agricultural job over MGNREGA 84

4.18 Social inclusion status of workers after enrolling to MGNREGA

85

4.19 Economic Empowerment status of Workers after registering under MGNREGA

87

4.20 Financial inclusion status of women workers after registering under MGNREGA

88

4.21 Problems of MGNREGS identified by the workers 89

4.22 Workers expectation on MGNREGA 91

List of Figures

Table

No. Particulars

Page

No.

3.1 Performance of MGNREGS between 2006-07 and 2013-14 57

3.2 Average number of Person days per household between 2006-07 and 2013-14.

58

4.1 Age wise classification of the Respondents of the Scheme 72

4.2 Gender wise age classification of respondents of the scheme 73

4.3 Education Status of Respondents 75

4.4 Annual enrolments to the Scheme 76

4.5 Occupation wise classification of the respondents 77

4.6 Family Income of Respondents 79

4.7 Market rural agricultural sector average wage rate in Kozhikode District before introduction of the scheme

81

4.8 Market rural agricultural sector average wage rate in Kozhikode District after introduction of the scheme

81

4.9 Comparison between increase in MGNREGA Wages and Rural Agriculture Wages

83

Abbreviations

NREGA : National Rural Employment Guarantee Act

MGNREGA : Mahatma Gandhi National Rural Employment Guarantee Act

MGNREGS : Mahatma Gandhi National Rural Employment Guarantee Scheme

MoA : Ministry of Agriculture

MoRD : Ministry of Rural Development

UPA : United Progressive Alliance

NRLM : National Rural Livelihood Mission

CEO : Chief Executive Officer

SERP : Society for Education of Rural Poverty

SHGs : Self Help Groups

LSG : Local Self Government

IFPRI : International Policy Research Institute

NSSO : National Sample Survey Organization

NSS : National Sample Survey

IRDP : Integrated Rural Development Program

SGSY : Swarnajayanti Gram Swarozgar Yojana

TRYSEM : Training Rural Youths for Self Employment

DWCRA : Development of Women and Child in Rural Areas

UNICEF : United Nations International Children Education Fund

SITRA : Supply of Improves Toolkits to Rural Artisans

GKY : Ganga Kalyan Yojana

MWS : Million Wells Scheme

MRAE : Ministry of Rural Areas and Employment

APL : Above Poverty Line

BPL : Below Poverty Line

DRDAs : District Rural Development Agencies

NGOs : Non-Governmental Organizations

ILO : International Labour Organisation

UN : United Nations

SC/ST : Scheduled Cast / Scheduled Tribe

NPA : Non-Performing Assets

RMP : Rural Manpower Programme

RWP : Rural Work Programme

WEP : Wage Employment Programme

CSRE : Crash Scheme for Rural Employment

PIREP : Pilot Intensive Rural Employment Programme

SFDA : Small Farmers Development Agency Programme

FWP : Food for Work Programme

NREP : National Rural Employment Programme

RLEGP : Rural Landless Employment Guarantee Programme

EAS : Employment Assurance Scheme

JRY : Jawahar Rozgar Yojana

JGSY : Jawaha Gram Samriddhi Yojana

IAY : Indhira Awas Yojana

SGRY : Sampoorna Grameen Rojgar Yojana

CDP : Community Development Programme

MFAL : Marginal Farmers and Agriculture Labour Scheme

DPAP : Drought-Prone Area Programme

TPP : Twenty Point Programme

NFFWP : National Food for Work Programmed

NRM : Natural Resource Management

PRIs : Panchayati Raj Institutions

RNFE : Rural Non-Farm Employment

NEGC : National Employment Guarantee Council

SEGC : State Employment Guarantee Council

NBA : Nirmal Bharath Abhiyaan

DPC : District Programme Coordinator

NRI : Non-Resident Indian

SSLC : Secondary School Leaving Certificate

Chapter 1

INTRODUCTION

1.1 Introduction of the Study

Status of poverty in the economy will be very worst when rate of

unemployment reaches two digits, this situation will put more pressure on ruling

Governments to create more employment opportunity and give a relief to people

who suffer from the evils of poverty. Otherwise they can’t continue in power when

people start agitation against poverty and unemployment. Pressure mounted to the

Government of India has caused for given birth to National Rural Employment

Guarantee Act (NREGA) in 2005. Act provides guaranteed 100 days employment

for one eligible rural household. The act came in to effect during February 2006,

initially in 200 selected back ward district of the nation. Palakkad and Wayanad

were selected from the state of Kerala in the first phase. Then the scheme was

extended to all the district of India in another two phases. On 2nd October 2009 the

Act was baptized as Mahatma Gandhi national Rural Employment Guarantee Act

(MGNREGA). The scheme has completed 11 years in its operation and is proved as

a golden opportunity for the rural poor in the country.

Government has increased guaranteed minimum wage number of times, now

the enrolled members are able to get a wage of maximum 24200 in a financial year

from this scheme. This reveals that the scheme has caused for the increase in socio

economic status of the rural poor in the country. In case of developed state like

Kerala market wage rate is very higher than the rate offered under MGNREGA so

the enrollment rate to the scheme is diminishing year by year. More over male

worker are drawing wage almost 200% higher than the offered by this scheme, their

enrolment rate is also very less. Male members they are physically week to do other

work and those who are actively engaged in agricultural activity are only registering

to this scheme. This study reveals that most of people enrolled into the scheme are

Introduction 2

educational qualification below +2/ Pre University, from this information researcher

can conclude that educated community shows some negligence to register in this

scheme.

MGNREGS does not offer any employment, they are directly related

farming or agricultural production, provisions of the Act are not permitting works

they are repetitive in nature. This scheme concentrates more on creation of assets

like roads, mechanism to prevent soil erosion etc. Many of the past studies

conducted in the some back ward districts of Kerala and States like Andhra, pointed

out that introduction of MGNREGA have an impact on agricultural labour supply,

since the agricultural activities are seasonal, workers prefer MGNREGS which

ensure a minimum number of work days in a year and a particular amount of wage

was also guaranteed. This study tries to examine the situation in Kozhikode District,

Kerala. Kozhikode district is one among the Developed Districts in Kerala. Due to

the influence of Gulf money, market wage rate is very high when we compare the

same with state average. Result of the study shows a different result when we

compare the same with studies conducted in other states and other district of Kerala.

Introduction of the scheme Mahatma Gandhi National Rural Employment

Guarantee Scheme do not have any negative impact on the agricultural labour

supply of the district. Situation of labour supply to agriculture is almost constant

when we compare the same before and after introduction of the Scheme

MGNREGS. This research work finds the reasons for the happening of this

particular situation.

1.2 Origin of Research Problem

After the introduction of new economic policy in 1991 Indian economy have

been growing very quickly, urbanization and development in urban area also

happened along with this movement. But the rural India was struggling to grow

along with the above developments and poverty was identified as the major reason

of this phenomena and unemployment was also identified as the cause for it. UPA

Introduction 3

led Government which was in power during the beginning of 21st Century identified

the issue and decided to introduce a programme which ensure minimum number of

employment and maximum wage for the unemployed mass in the rural area. This

was the beginning of the historical movement National Rural Employment

Guarantee Act 2005 (NREGA), which came into force in February 2006. Later on

2009 October 2nd Central Government Has decided to rename the Act as mahatma

Gandhi National Rural Employment Guarantee Act (MGNREGA). The Scheme

introduced (MGNREGS) is regarded as a “boon to the poor” as it has offered

number of benefits to rural poor. A rural poor family can utilize its idle manpower

to earn income more than 25000 per month. This has resulted in socio economic

empowerment of rural India, especially to rural women.

There are number of precious assets and infrastructure which has been

created using manpower under this scheme. From some corners, criticism has

arrived showing that asset generated under the scheme are lacking quality and not

having long life. This programme is implemented under the supervision of local

bodies like panchayats and Block panchayats. Moreover there exists a multi layered

social audit system with the participation of citizens, which ensures the efficient

implementation of the programme. While conducting the sample survey researcher

has identified some problems relating to implementation side of the programme. In

certain local bodies supervision is not up to the mark and at grass rot level proper

planning is not done which may cause for the wastage of fund. Some of the other

issues are delay in issuance job card and this is leading to the delay in work under

the scheme. Everybody participated in the survey mentioned that delay in

transferring wage under this scheme is important drawback of the programme.

One of the other major criticisms is that MGNREGS has created a negative

impact on the availability of labor in the agricultural sector which contributes

around 65 % of national income and at the same time it has caused for increase in

wage rate also in some states. It is also alleged that labourers prefer works in

MGNREGS over other works, owing to its less toil, less supervision and provision

Introduction 4

of other facilities. Due all this allegations the (MoA) Ministry of Agriculture has

many times requested to (MoRD) Ministry of Rural Development to put a hold on

the scheme during the time of agricultural farming and the harvesting for ensuring

availability labour force in the agricultural sector. In this scenario it is very

significant to conduct a study on shortage labour in the agricultural sector and

introduction of MGNREGA to find whether the shortages are related to this scheme

or not. In this study researcher tries to make analysis of situation in the Kozhikode

district of Kerala, where MGNREGS is very successfully implemented and

functioning very smoothly.

1.3 Significance of the Research Study

MGNREGA is flagship event happened in India after independence and

introduction of this scheme has created some positive impact in Indian rural

community especially in the case of rural women. It has helped in the socio

economic empowerment of rural mass of India. Since the scheme is very productive

in Indian Scenario any study related this programme is highly significant. Major

portion of Indian population constitutes unskilled labourers and most of them were

earning their bread and butter from the agriculture sector employment. But the

Indian agricultural sector is still depending on monsoon and the employment of this

sector seasonal in nature. So this sector offers very few work days and this has

caused for the poverty of India especially rural India. As discussed earlier balanced

development of urban and rural region are compulsory to attain the overall

development of the economy and the nation.

MGNREGA is the only act that provide compulsory job for 100 days for

any adult member of the household in rural areas. According to Shah (2012),

MGNREGA now changed the old saying of “jab kaamkhulega, tab kaammilega”

into “jab kaammaangenge, tab kaamkhulega”. Revised rule of MGNREGS allows

farmers to utilize its works force for agricultural sector also. This will help the small

and medium scale farmers for reducing their labour shortage and increase

Introduction 5

production. Many studies revealed that this scheme would help the marginal and

small farmers who are unable to hire agricultural labour due to high wage rates.

MGNREGA has increased farm income of the small and marginal farmers, because

they have been able to increase input in their farms such as irrigation, fertilizer and

hybrid seeds. But, medium and large farmers face low labour supply in agriculture,

because of MGNREGA work as farmers are unable to provide the wage rates more

or equal to MGNREGA. In February, 2012 the Union Government announced that

agricultural labour shortage in the villages are due two reasons, due to MGNREGA

and migration of rural youth for education to the cities.

According to the various studies held in different states of India,

MGNREGA has two side impact on socio-economic status in rural areas i.e.,

positive and negative. Positive impact of MGNREGA is that it increases bargaining

power among the labourers and empowering the women in terms of wage rate

(Equal to men). The labourers are now not dependent on landlord’s work and they

do not need to leave the village for their livelihood. Later impact revealed that it has

created labour shortage for agriculture and increased high wage rate in the rural

areas due to minimum wage rate of Rs. 120-150 (depending on region/state). As

Jacob (2008) reported that “the aspect of NREGA where it can be used to curb

rural-urban migration was conditional on the NREGA being implemented well in

that region, otherwise, if work was not supplied, if wages weren’t paid on time and

if money was just being siphoned off, then workers will have no incentive to stop

migrating”. He also stated that “the Rural Employment Scheme has made zero

impact on the livelihood security of Orissa’s (KBK-Kalahandi-Bolangir-Koraput)

rural poor. Land owners are also not satisfied with NREGA, because they were

facing labour shortage due to high mandatory wage rates of NREGA compared to

earlier wage rate”. Similarly, Roy and Dey (2010) observed that “as a result of

NREGA the rural labour demanded minimum wages from all employers, landlords

and contractors”.

Introduction 6

Situation of Kerala is little different from other states in India, market wage

rate in Kerala is always higher than the wage fixed by MGNREGA. So this scheme

is not that much attracted the youths of the state. More over education status of

Kerala is higher than the people living in other states, and most of them prefer white

collar job. In this scenario it is significant to know the impact of MGNREGA on the

agricultural labour supply, number of related studies have been conducted in

different part of the nation and find that it has both positive and negative impact on

agricultural labour supply, researcher tries to make an analytical study on the

situation prevailing Kozhikode district.

1.4 Scope of the study

The study concentrates on the impact of MGNREGA on the agricultural

labour supply of Kozhikode District. Study covers laboureres who enrolled to the

scheme MGNREGS. Study aims to track the changes happened to Employees and

cultivation after the introduction of MGNREGA. Such information helps the

researcher to reach to a conclusion regarding the positive and negative influence of

the scheme on the labour supply to the agricultural sector. Besides this the study

provides key information regarding impact of the scheme; and the problems and

prospect of the scheme. Study were conducted in selected 24 Gram Panchayats of

Kozhikode district, two Panchayats form each Block, where MGNREGA scheme is

introduced.

1.5 Objectives of the Research Study

1. To compare the flow of workers into the agricultural sector before and after

the implementation MGNREGS

2. To identify the extent of the transfer of labour from agriculture sector to

MGNREGS.

3. To identify the reasons for the shortage of labour, if any in agricultural

sector.

4. To identify the reasons for diminishing rate of enrollment to MGNREGS.

Introduction 7

5. To analyze the impact of MGNREGS on wage rate.

6. To evaluate the socio economic impact of MGNREGS.

7. To assess the problems and prospects of MGNREGS.

1.6 Definition of Terms Used

Various terms, variables, measurement and testing criteria used in the study

defined as follows:

Employment guarantee scheme

It is programme which ensures a minimum number of work days to people

in a financial year. Mahatma Gandhi National Rural Employment Guarantee Act

proposed such a scheme for Indian rural people.

Minimum wage

A particular amount of payment guaranteed for a job

Unskilled labour

A worker who did not get any training for engaging a particular employment

Semi-skilled labour

A worker who underwent for training for undertaking a job, but he/she is not

fully qualified for doing any of the jobs.

Skilled labour

Skilled labourers are specially trained in doing an employment and they can

complete the task professionally using the acquired knowledge.

Wage Employment programme

It is scheme offering a fixed amount wage for day of work. Wage may be in

cash or in kind or a combination of both of this.

Introduction 8

Unemployment

It is the state of being not actively engaged in work by an individual during a

particular period.

Seasonal Employment

State of being a person engaged in work during particular season only, as far

agriculture is concerned, during the time of farming and harvesting.

Job Card

It is a card issued by the concerned local bodies to a household as a proof of

their registration under MGNREGA.

Work days

It is the number of days of work available in a year to a member under this

Act.

Non-Performing Assets (NPA)

It is the unpaid portion of loan given to a person by a financial institution or

any governmental or quasi-governmental organisation.

Subsidy

It is the portion of credit given to a person by the governmental institutions,

where the liability of repayment of such credits are undertaken or guaranteed by the

government.

Literacy

It is the ability of an individual to read, write and communicate in his mother

tongue.

Introduction 9

Household

A house and its occupants regarded as a unit.

Unemployment Rate

It is the ratio of unemployed population with the total population in a

particular locality or even a country.

Sex Ratio

It is the ratio of females to 1000 males in a particular locality or a state or a

country.

Gram Sabha

A meeting of all adults who live in an area covered by a panchayath ward.

Poverty Eradication

It is the process of removal of poverty and its symptoms from a society.

Employment Guarantee Programme

It is a programme put-forward by the government or any such agency

which assures minimum work days in a financial year for a person enrolling the

programme.

Wage Employment Program

It is a programme put-forward by the government or any such agency which

pays minimum guaranteed wages to the person enrolling the programme and other

benefits are given according to his work days.

Self-Employment

The state of being in employment for oneself as a freelance employee, rather

than being a worker under an employer or being the owner of a business.

Introduction 10

1.7 Hypotheses

1. MGNREGA has caused for the increase in market wage rate.

2. There is a significant relationship between increase in MGNREGA wage and

increase in agricultural sector wage.

3. MGNREGA has certain role in economic empowerment of workers of the

scheme.

4. MGNREGA has caused for the social inclusion of workers of the scheme.

5. MGNREGA has resulted in financial inclusion of rural women.

1.8 Research Design

This research work is designed as basically descriptive in nature but the

objectives of the study are structured to explore a detailed idea on the research

problem and problems and prospects of MGNREGA in Kozhikode district. This

study makes use of discriminant model for deciphering various variables which

limit supply of labour to agricultural sector.

1.8.1 Source of data

This research work exploits both primary and secondary source of data to

come to a conclusion. Data collection was done in phased manner and includes two

phases. In the first phase, various related study were reviewed so as to capture a

detailed idea on various aspects of the problem to formulate the conceptual

framework for the research. In the second phase primary data were collected using a

well-structured questionnaire. Model of the questionnaire is given in the appendix.

Number of published and unpublished reports, text books, periodicals,

seminar proceedings, commission reports and government publication were used for

extracting secondary data. Besides these Website of NREGA, Ministry of Rural

development and Govt. of Kerala were also used as the major source of secondary

data. Secondary data collected were used as a base for hypothesis setting, sampling

process and validating the information collected through primary source.

Introduction 11

1.8.2 Tools used for survey

After discussing the problem with some statisticians, experts and officials of

local bodies well-structured and quantifiable questionnaire was developed for

collecting details from the MGNREGA workers. Questionnaire prepared for the

workers enrolled into MGNREGA has three part first part comprises of questions

related to demographic and personal profile of the respondents. Second part of the

schedule has questions related to the changes in their work and personal life after

enrolling into MGNREGA, and the last part has question related to problems and

prospects of the scheme MGNREGS.

1.8.3 Survey area

This study mainly focuses on the situation prevailing Kozhikode District of

Kerala state. Kozhikode district has second rank among various districts Kerala in

the case of development. Economy of the district is mostly depended to gulf money

but still a majority of the population depended to agriculture. 24 Panchayats of the

district (two each from a Block) are selected for the study based on the

implementation MGNREGS in the particular local body. A detailed description of

Survey area is given in the below given table.

Table 1.1: Detailed Description of Survey Area

District Blocks Panchayats Selected

Kozhikode

Balussery Koorachndu Unnikulam

Chelannur Thalakkulathur Kakkodi

Koduvally Kattippara Thiruvambadi

Kozhikode Kadalundi Olavanna

Kunnamangalam Karassery Kodiyathur

Kunnummal Kavilumpara Maruthonkara

Meladi Keezhariyur Thurayur

Panthalayani Arikkulam Atholi

Perambra Chakkittapara Kayanna

Thodannur Maniyur Thiruvallur

Tuneri Vanimel Tuneri

Vadakara Eramala Onchiyam

Introduction 12

1.8.4 Measurement variables

The concept and construct of the study are converted into pragmatically

testable and apparent variables. It includes contradictory, categorical, unceasing and

other unspecified set of variables.

1.9 Sampling Design

It consist the process of selecting samples from the population of workers

registered under the scheme MGNREGA. Another section of population includes

farmers from different part of Kozhikode district.

1.9.1 Population for the study

Workers registered under MGNREGA constitute the population or universe

for this study. In this study researcher try to analyze impact of MGNRGS on

agricultural labour supply of Kozhikode District, details from workers who are

working under MGNRES in inevitable to conduct the study.

As per the statistics available in the MGNREGA website as 31st March

2014, 469052 persons are registered under MGNREGA in Kozhikode District.

Among this 289614 are women, 46676 are SCs and 4512 are STs. Active workers of

the district under this scheme is 197160. In Kozhikode district as per 2011 censes

total 638351 farmers are there. In this 38749 belongs to SC community and 2317

belongs to ST community, balance 597285 belongs to a wide mix. 63% of the total

farmers are marginal farmers holding less than 1 hector land; and .03% is producing

in large scale and is holding more than 10 hector land.

1.9.2 Sample size

Population under the study is very large, workers registered under

MGNREGA in Kozhikode district is the universe of this study. Since the population

is very large, sample can be determined using the approach of Cochran (1963). The

equation of this model is:

Introduction 13

Where, n is the sample size, Z2 means the abscissa of the normal curve that cuts off

an area ∞ at the tail (1-∞ equal the desired confidence level), e is the desired level of

precision, p is the estimated proportion of an attribute that is present in the

population, and q is 1-p. The value of Z is found in statistical table which contain

the area under the normal curve. In the present study, value of p assumes p=0.5

(maximum variability under normal distribution at a confidence level of 95% and

5% precision. The resulting sample size is 385. In this study for selecting equal

number of samples form the sample frame, sample size is decided as 384 and 384

workers from 197160 active workers of MGNREGA were selected randomly for

this study

1.9.3 Sample frame and selection of samples

In Kozhikode District there are 12 Blocks Panchyats, MGNREGS has been

implemented in all the 12 Blocks. From each Blocks 2 Gram pachayat were selected

based on judgment sampling, after observing the agricultural activity and area of

cultivation. Panchayats having large area of agriculture land and active in farming

were selected for the study. From each Panchayat, 2 wards were selected randomly

and from each ward eight workers of MGNREGS were selected using simple

random method.

1.10 Period of Reference

Information required for the study is highly sensitive and personal in nature

as it consists personal information and data related to their earnings. Most of the

workers and farmers were not ready to produce all the information. It was only

possible through a well-designed and self-administered questionnaire. The survey

conducted during 2015 November to 2016 March. Secondary data collected for the

study was related to the period from 2006-07 to 2013-14.

Introduction 14

1.11 Tools for Data Analysis

The scholar of research has used rigorous statistical techniques for extracting

useful information from the raw data collected. Selected statistical tools were based

on suitability to the defined objectives and the nature of data collected. The

analytical methodology covered large number of statistical tool including parametric

and non-parametric in nature.

Percentage analysis method is widely used in this study to know the extent of

coverage of the programme and this method is suitable to assess the condition

before and after the implementation of the scheme MGNREGA. Independent

sample t test verified the statistical significance of difference in mean score of

percentage of market wage rate increase before and after the introduction of

MGNREGA. Simple correlation analysis was used to assess the relationship

between increase in wage rate of MGNREGA and increase in market wage rate.

1.12 Limitations of the Study

1. Respondents were not fully cooperating while collecting data, since they are

not technically capable to respond against some queries.

2. This research work is mostly based on primary data and the responses are

not free from personal bias, it might have affected the results of the study.

3. Result of this research work is based on the study conducted among few

selected workers and farmers of Kozhikode District.

4. Secondary data are collected from various published sources and used for

the study, so the study may not be fully free from errors.

Chapter II

REVIEW OF LITERATURE

2.1 Introduction

The study of any research problem requires referring the past works on the

related topics by other scholars which are directly connected to the objectives of the

study. This helps to proceed with work in the right direction. It acts as a guide and

facilitates, for conducting study and drawing conclusions in a systematic way. It

assists in delineation of the objectives and research procedure to be followed.

Number of studies had been conducted at International level, National level

and also at regional level on various aspects MGNREGA. Since it is first initiation

from a nation all the agencies like World Bank, ILO, UN, RBI etc. were very eager

to know the performance and impact of the scheme MGNREGS. Most of the studies

make initiations to bring out the impact created by the NREGA programme on the

earnings, social status and asset holdings of the rural women and other beneficiaries

of the scheme. And some of them reveal the barriers to efficient implementation of

the programme. MGNREGS in Kerala not providing direct labour for the

agricultural sector in large scale. Since the agriculture is still considered as the bread

and butter of a major portion of the population, a study which focuses on the impact

MGNREGA on agricultural sector labour supply is very significant and relevant.

Existing studies in this area are very few and providing very little information. A

profitable review of the relevant studies has been briefly attempted below, and these

listed studies justify the relevance and importance the present study.

2.2 Literature Review

Padhi (2007) mentioned that agricultural laborers in in India are usually very

low paid, even when they undertake laborious task. Indian agricultural sector is still

depended to monsoon and job opportunities are highly seasonal in nature.

Agricultural laborers and their family are in the severe risk of poverty that permits

routes out of agricultural labor, particularly across generations.

Review of Literature 16

Jose and Gireeshan (2007) in his study on the impact of Mahatma Gandhi

Rural Employment Guarantee Scheme in 37 Local Bodies in Wayanad and

Palakkad District (two Districts where NREGA implemented in the initial phase)

revealed that there was an active involvement of LSGs in programme planning and

implementation. Several micro level institutions have been formed in all the local

bodies for ensuring the smooth functioning of the scheme; but their sustainability

has not been ensured. All most all Panchayats have completed registration of

workers and issuance job card, they were not able to provide guaranteed number of

employment to registered workers.

Dreze and Oldiges (2007) in their study mentioned that the anticipated

benefits of employment guarantee started to show in the pioneer districts. The study

reveals that the number of work days and expenditure on MGNREGS are very high

in the financial year 2007-08 comparing to other financial years near to that. In

2006-07 MGNREGA generated 900 million work days, at a cost around Rs. 9000

crore. It is much below level that would materialize if the Act were implemented in

letter and spirit. Best performing state was Rajasthan, produced around 100 work

days per person. Thripura, Madhya Pradesh. Assam and Chhattisgrah also

performed well. But Kerala was standing in the bottom level incase performance

due to low demand for MGNREGS work in the state.

Rajalaxmi (2008) had a study in Anantapur District of Andhra Pradesh and

the result says that 11 % of the total work forces are only skilled and most of the

workers (99%) were not thinking to migrate from villages for work, because they

have enough employment opportunities under NREGA in the previous year as well.

The Study concluded that all most all the sample population would not like to

migrate from their village even if they are likely to earn more in the urban areas. So

the contribution of MGNREGA towards bringing down distress of migration to

urban areas during the slack season is very valuable.

Mehrotra (2008), as a civil servant who had been a part of implementation of

the scheme, believes that 4% of the project cost now allocated to administrative


purpose and professional support, it is still quite low. Programme like NREGA

needs high level professional support. If 2% per year growth rate is to be observed

in the agricultural sector, the rain fed areas that constitute 60% of agricultural

cropped area in the country have to raise their land productivity; they have to move

from one crop to preferably two; if not three crop per year.

Deshingkar (2008) revealed in his studies that human work force is the

major constituent of input in agricultural cultivation, but in the standard of living of

family who are earning from agricultural sector employment is very worse. So they

are trying to migrate from one part of the country to some other places for earning a

better livelihood. This situation creates more imbalances between demand and

supply of agricultural sector laborers.

Vijay Kumar, CEO of SERP, Andhra Pradesh Government (2009), Suggest

that implementation of NREGA should be linked with existing SHG groups. He also

said that NREGA workers should get an insurance protection and they should get

enrolled into a contributory pension scheme which provides a pension of Rs. 500

per month after attaining the age of 60.

Dr. C.P Joshi, Former Minister of Rural Development, Government of India,

(2009) initiated a discussion session and explained the main issues of consideration

and constrains in the implementation of NREGA, especially federal structure and

distribution of responsibilities. He assigned a task to the participant of the discussion,

to propose future interventions and suggestions on how to change unskilled NREGA

participants to semi or skilled workers, how to develop the assets created under

NREGA more lasting, how to bring NREGA workers under the coverage of proposed

National Rural Livelihood Mission (NRLM) and to strengthen the process of social

audit and creation of District Ombudsmen for grievance redressal.

Jayasree (2010) revealed in her studies that MGNREGS provides

employment to those who demands employment and it is a special feature of this

programme. In the initial phase it was introduced in 200 districts of the nation and


later extended to the whole country. Since most of the rural women mass are jobless

this mission will help them to find enough days of employment.

Vanitha and Murthy (2011) conducted a research work on “Economic

Analysis of MGNREG Pogramme in Mysore District of Karnataka” and found that

70 % of the workers enrolled to MGNREGA are agricultural laborers. Major portion

of the Income earned by those who got registered under the scheme are from

agricultural sector (60.55%). Average annual work days generated by the

MGNREGA were 75 days and about 68 % of landless participants earned 28% of

their house hold income from the scheme. Study also revealed that there has been a

decline in the supply of labour to the extent of 41 person days per year on an

average after implementing MGNREGS and suggest that works under the scheme

should be executed only during offseason.

Ahuja (2011) initiated a research work in both agriculturally backward and

agriculturally advanced districts of Haryana to know the impact MGNREGA on

agricultural labor supply. Study indicates that, for the backward and area resource

scarce areas, MGNREGS is good provider of employment. But in the case of

developed districts the scheme couldn’t stop migration as the people were earning

more income from migration.

Swaminathan and Ayar (2011) produced a report to the Ministry of

Agriculture, Central Government of India, the report says that in the 36 months

period (from January 2008 to December 2010) the agricultural wage in the country

have increased at a growth rate between 42% (in Rajasthan) and 106% (in Andhra

Pradesh). There was an exception also, in Gujarat the rate of growth was only 24%.

They also pointed that the increase in agricultural wages has caused to reduce the

stress of migration from rural to urban.

Murthy and Indumati (2011) conducted a study to know the economic

impact of MGNREGA in the Drought-prone State of Karnataka, Rajasthan and

Irrigation Dominated State of Andhra Pradesh. This study revealed that 50% of the


households who registered under the Act, actually demanded employment. This is

due to the availability of favorable market outside the MGNREGA and outside the

agriculture sector. Of the total number of households demanding employment, 92-

97 % were provided in the drought-prone states of Karnataka and Rajasthan, while

for the irrigation dominated state of Andhra Pradesh, it was reported that 107%.

This means that in Andhra Pradesh, MGNREGA is being offered even to those

house hold who did not demand it.

Maheshwari and Gangwar (2011) went for a study on “Impact of Dairy

Farmers in Thanjavur District of Tamil Nadu” and found that after the

implementation of MGNREGA wage rate have significantly increased in the sector

from Rs. 60 per day Rs. 110 per day. The study observed that animals of some

landless or small dairy farmers are maintained by the children or aged family

members, as majority of adult family members enrolled into MGNREGS. But the

these workers are not getting guaranteed 100 days of employment in a financial

year, more over wage payment and issue of job cards are also getting delayed

always.

Prabhakar et al (2011) opined that world’s second largest country in the case

of manpower is India, but all the sectors of the economy are facing scarcity of labor

and the impact more is in agricultural sector. The 2001 Census has defined

agricultural labor as “any person who worked on another person’s land only as

laborer, without exercising any supervision in cultivation, for wage in cash or share

such as share of produce”. Proportion of agricultural workers to the total work force

has been declining over years. But the proportion of same in the secondary and

tertiary sector is on rise. This has influenced the sector and some changes have

noticed in agriculture in the recent years like, reduction in crop yield, reduction in

cropping intensity and changes in traditional cropping pattern.

Harish et al (2011) made a research on Impact and Implications of

MGNREGS on labor supply and income generation from Agriculture in Central Dry


Zone of Karnataka. This study results that the number of days of work in a year has

increased to 206 in a significant manner along with the introduction of MGNREGS,

reflecting an increase of 16%. Regression analysis of this research reveals that

gender, education and family size of workers are important factors influencing the

worker’s employment.

Channaveer et al (2011) had a study on “Impact of MGNREGA on Inputs-

use Pattern, Labour Productivity and Returns of Selected Crops in Gulbarga

District, Karnataka”. He was trying to examine the impact MGNREGA in the

selected two sets of Villages in the Gulbarga District, one which utilized 75% of

allocated fund and other utilized only 25% of fund under MGNREGA. Result of the

study reveals that cost of cultivation of Red Gram and Rabi Jower found higher by

23% and 16% respectively in fully implemented villages. Labour productivity of

male and female has been noticed lower in fully implemented villages, and

implementation of the scheme has caused for the hike in wage rate of fully

implemented MGNREGA villages.

Baba et al (2011) made an examination on “Scarcity of Agricultural Labor in

Cold Arid Ladakh: Extent, Implications, Backward Bending and Coping

Mechanism”. Result of the examination says that labor is a prominent input in the

Indian agricultural sector. The phenomenon of underemployment is manifested in

daily lives as a large proportion of labor demand is met by wage labor, due to the

skewed land distribution and seasonality of demand in agriculture. But the

agricultural laborers are not well placed to take advantages of this and mobility of

agricultural labor remains low.

Kumar (2011) opined that the rural India is undergoing a quick

transformation and the contribution of non- farming job and non-farming income to

the rural income are also increasing. Researcher mentioned many studies on rural

employment diversification in like, (Kumar, 2009; Mukhopadhya and Rajaraman,

2007; Chadha and Sahu, 2002; Basant and Kumar, 1989) to conclude that the share


of non- farm sector in rural employment has significantly grown over time. This

study also revealed that there is an acute shortage of labor in Cuddalore District for

agricultural work. If this situation continues, the cultivation pattern of the district

may even get a shift towards tree crops like coconut, cashew etc. which are

comparatively labor intensive. Reasons identified by the researcher for this shift are

the low wage rate of locally available jobs and seasonal nature of agricultural sector

jobs.

Alha and Yonzon (2011) revealed that there is an urgent need to implement

MGNREGS and other projects with full potential to improve social and economic

condition of the large population of agricultural workers who have been living in

very pathetic situation for the last couple of decades. Their study further indicate

that there was a decline in rate of migration from rural to urban between the period

2004-05 and 2007-08, may be due to the introduction of the supporting scheme

MGNREGS.

Alha and Yonzon (2011) expressed that agricultural sector in India has

number of characteristics like high supply of labor than demand, very low rate of

wages, large area of agricultural land and opportunity to earn livelihood is very

limited. But Sector has undergone for a huge change in recent couple of years. The

reasons for this change are the increased rural to urban migration, and the

introduction MGNREGS and other public works. Structural changes happened in

Indian economy has caused for increased rate of male migration from rural area to

urban expecting a better earning. Schemes like MGNREGS not attracted them

because of the market wage rate, but these schemes are found attractive for females

in rural locations. This situation results in a shortage of farm labor and

consequently, an upward push in agricultural wages.

Verma and Shah (2012) conducted a study to assess the potential of various

irrigation assets constructed in connection with MGNREGS in Bihar, Gujarat,

Rajasthan and Kerala for the year 2009-10. Study was based on the cost benefit


analysis and finds that 80% of the assets created recovered its investment in the first

year itself.

Thadathil and Mohandas (2012) found in their studies that MGNREGS had

worthy impact on the cultivation of Wayanad when it introduced in the year 2006.

During this time District was facing severe crisis in the agricultural sector, many

farmers committed suicide due to loss happened to them, as a result low prices for

their products. Workers lost their employment and those who had job were very low

paid, nearly Rs.100/day for male workers and Rs.70/day for female workers. This

situation has caused for the massive flow of laborers from agricultural sector to

MGNREGS when the scheme is introduced. Later when the market wage rate

increased to considerable amount male workers started to leave the scheme and

shifted back to their earlier occupation.

Azam (2012) examines the impact of MGNREGA on labour force

participation and on participation public work. This was one of the first papers to

use the phase wise roll out of the MGNREGA to identify the causal impacts using a

DID estimator. He finds a positive impact of the scheme on labour force

participation, and also notes that this was driven mainly through an increase in

female participation. He also finds an increase in participation in public works in

Phase 1 and 2 districts, but the magnitude is modest.

Zimmermann (2013) has conducted a study to examine the impact of

MGNREGA on private casual wage employment utilizing unit record data for 2007-

08 adopting a regression discontinuity approach. Finding of this study suggest that

MGNREGA has a significant impact on public work employment and also finds

evidence that suggests that people moved out of private casual employment into

self-employment due to the MGNREGA.

Roopa and Leelavathi (2013) mentioned in their studies that Indian

agricultural sector is often cited as a classic example for disguised unemployment.

Labor abundance, low rate of wages, and need for creation of other employment


opportunities for a large number of work force have always been the central issues

of debate throughout the planning period. The study reveals that MGNREGA must

be implemented in partnership with local farmers in such a way that the local

farmers will gain labor supply through MGNREGS, and the state can also share the

fiscal burden with the local farmers in season of corps. In the off season work force

should be directed to the development of local infrastructure and other related asset

creation.

Indian Institute of Science (2013) undertook a study to know the ground

water level of different states in India after implementing various plans under

MGNREGA to increase ground water level. Study finds a significant improvement

in ground water level and irrigation facilities for farmers as a consequence of

MGNREGA in Andhra Pradesh, Karnataka, Madhya Pradesh and Rajasthan.

Sardaprasad (2014) in his study titled, MGREGA: A strategy to overcome

labor shortage in agriculture has observed that the main four reasons for agricultural

labour shortage in the rural area are rural out migration, MGNREGA work and it

wage rate, disinterest of rural youth in agriculture, and political influence of leader

on labour. According to him, the most affected farmers are the medium and large

scale farmers, because they are not able to manage agriculture only with the help of

family labor and most of the time they are not able to hire labor because of the

unavailability, even if they are ready to pay higher wage rate.

IFPRI (2014) in its discussion paper revealed that after the introduction of

MGNREGA income of rural poor are increased into a considerable amount, village

infrastructure and agricultural sector wages are also improved. Study also finds that

water saving technology in the rural area is also being affected. In the long run

MGNREGA will be useful for increase in agricultural productivity and the newly

created MGNREGA infrastructure will help to increase the market access also.

Seenath P, Prema and Sulaja O R (2015) conducted a study on “Implications

of MGNREGA in Agricultural Labour Market” and found that majority of the


workers registered under this scheme are females and their participation will come

around 95%. Agriculture was the major provider of employment in Kerala before

the introduction MGNREGA, but after its implementation MGNREGS took this

position. Though they were not completely abstaining from agricultural work, their

participation in terms of agricultural labor per year was decreased from 64.4 to 20.4

in Kasaragod District of Kerala. Study shows that there was 68.42% reduction in

average agricultural labour days per year after implementing MGNREGA. This

change indicates that MGNREGS is the supplementary provider of employment in

Kasaragod District. Annual income of the participants of the scheme was increased

by 142% after joining into the scheme.

Chowadary (2015) conducted a study and revealed that during the

introduction stage of MGNREGA there was massive flow of workers from

agricultural sector to MGNREGS because of its high wage rate. Then the situation

changed and the agricultural sector recovered its old status. The higher market wage

rate has resulted in opposite flow of workers back to their basic occupation. Those

who had retired from plantations and sought a work of lesser effort remained there.

Women constitute a major portion of workforce of MGNREGS, because women got

wage equivalent to a male worker and it is a matter of status to them to be a

Government worker rather than a coolie. Women who were mainly housewives and

laborers of higher age group resorted to MGNREGS as it involves less toil and

provides guaranteed employment.

FICCI and KPMG (2015) in their report titled “Labor in Indian Agriculture:

A growing Challenge” says that Mahatma Gandhi National Rural Employment Act,

have affected farm labor adversely and can have negative impact on productivity

and prices. The decrease in supply of agriculture labor with support of various

Govt. schemes like MGNREGA has caused for the escalation in farm wages. This

has an adverse impact on the profitability of the farmers. This report also says that

between 2004-2005 and 2011-2012, farm labor declined 31 million, even if the total

work force continued rising. Share of farm work force in total work force of the

country decline from 57% to 49%.


2.3 Summary

Labour force constitutes a vital input in Indian agricultural sector. Last

couple of decades’ agricultural sector of India has been characterized by supply of

labour which is always higher than the demand in the sector. Majority of the

workers in this field are unskilled and are working for a very limited income.

Another characteristic is the seasonal nature of its employment since the agriculture

in India is still depending on monsoon. Rate of migration of workers from rural to

urban area was also very high by expecting a better livelihood; migration is very

high in the case of male workers. Sectorial changes happened in India economy has

influenced agricultural sector also, a considerable portion of work force have moved

to non-farm sector. Further the share of non-farm sector in rural employment has

considerably grown over time. MGNREGA have great impact on Indian economy,

especially on agriculture and its labour force. Implementation of the scheme

influenced rural to urban migration and the rate of migration has declined up to a

large extent. In many of the state the scheme has caused for the increase in

agricultural sector where the general market wage rate was very high. Many of the

studies reveal that the programme has a negative impact on availability of labor for

agriculture, in most of the state wage of farming is less than the rate offered by

MGNREGA and the workers preferred MGNREGA instead of farming. Further,

some of the researchers have mentioned that MGNREGS is more attractive for

females and senior people as the program is providing opportunities to those who

demand work and also useful to improve the natural resources like and land and

water.

Chapter III

RURAL EMPLOYMENT GUARANTEE

SCHEMES IN INDIA

- AN OVERVIEW

3.1 Introduction

Poverty in India was severe and most acute in rural areas where there

was greater dependence on the agricultural sector. The first year of the planning

era of the country (1951-52) witnessed a poverty ratio of 47.4 per cent in the

rural areas and 35.5 per cent in the urban India (Planning Commission, 2002). A

significant majority of the poor in rural areas were depending mainly on the

irregular wages, they could earn through unskilled labor. Unemployment was

not considered as a bigger issue by the Central Government and Government

expects that a relatively faster economic growth through the Five Year Plans

would generate enough employment opportunities for the unemployed masses.

Moreover, a relatively less moderate increase in the labor force was expected by

the Government at that time. However, the situation became quite serious by the

end of the Second Five Year Plan in 1961. The number of the unemployed

increased from 42.6 lakh in 1956 to 64.8 lakh in 1961, showing an increase of

52.11 per cent over the said period (Census of India: Variation in Population

Since 1901, 2001-02). Efforts were then taken by the Government to make

development more employment-oriented, by encouraging the growth of

employment intensive sectors and by instituting special wage employment

programmes.

REGS in India – An Overview 27

Table 3.1: Employment Growth in India (in Millions)

Year Rural Urban Total

Number Growth %* Number Growth %* Number Growth %#

1972-73 168.65 - 36.10 - 204.75 -

1977-78 171.04 0.28 42.85 3.74 213.88 0.92

1982-83 187.90 1.97 51.59 4.08 239.49 2.08

1993-94 238.75 2.46 75.18 4.16 313.93 2.61

1999-00 251.22 0.87 86.97 2.61 338.19 1.25

2004-05 277.6 2.10 105.2 4.19 382.8 2.62

2009-10 285.4 0.56 115.4 1.94 400.8 0.92

*Simple average of previous year

#Growth rate (%) per annum is given over the previous quinquennnial round

Source: Planning Commission of India

Table 3.2: Growth of Unemployment in India

Sl. No. Year Unemployment

(% to labour force) Change (+/-)

1 1972-73 8.35 -

2 1977-78 8.18 -0.17

3 1982-83 9.22 1.04

4 1993-94 6.06 -3.16

5 1999-00 7.31 1.25

6 2004-05 8.28 0.97

7 2009-10 6.53 -1.75


“India lives in its villages”. This was the statement of Mahatma Gandhi, the

Father of our nation, and is relevant even today from the political, social and

economic perspectives of India. As per the Census 2011, Indian population is

121.02 crore, of which 68.84 per cent (83.31 crores) live in the rural areas and only

31.16 per cent (37.71 crores) are in the urban area (Registrar General & Census

Commissioner, 2012). Rural life in India is characterized by poverty,


unemployment, as well as poor and inadequate infrastructure, and these will have a

cascading effect on urban centers by causing slums and economic and social

tension. Hence, the development of rural areas received more attention by way of

the various schemes designed for the development of Indian economy. The

unemployment scenario in the country over the years is quite a substantial evidence

of rural backwardness and all sorts of developmental needs. The increase in

unemployment has been a silent phenomenon in India. According to the National

Sample Survey’s (NSSO) 55th round, unemployment as a percentage of labour

force rose from 5.99 per cent in 1993-’94 to 7.32 per cent in 1999-2000

(Government of India, 2012). Based on the National Sample Survey, the

International Labour Organisation has reported that the total employment grew by

only 1.1 million, from 2004-05 to 2009-10. However, the total employment in India

expanded by 13.9 million from 2009-10 to 2011-12. As per the report on the ‘Third

Annual Employment and Unemployment Survey, the unemployment rate is

estimated to be 4.7 per cent at the all India level (Govt. of India, 2013). Despite

relatively low labour force participation rate, the unemployment rate is significantly

higher among females as compared to that among males. At the all India level, the

female unemployment rate is 7.2 per cent whereas for males, the rate is 4.0 per cent.

It should be noted that the unemployment rate is lower (4.4 per cent) in rural areas

whereas, in urban areas, the same is 5.7 per cent (Govt. of India, 2013).

To a great extent, the size of employment in a country depends on the level

of development. So, when a country makes progress and its production expands, the

employment opportunities also grow. In India, during the past three decades,

production has increased in all sectors of the economy, which has led to an increase

in the level of employment. As against the GDP growth at an average rate of 6.4 per

cent between 1992-93 to 2000-’01, the employment growth declined from 2 per cent

to 1 per cent (Sengupta, 2004). Thus, the country has been witnessing a jobless

growth in the recent years. This was due to the fact that the rate of economic growth

was lower than the targeted rate and so, adequate number of jobs was not created


(Puri & Misra, 2008). It is also argued that economic growth in India in the early

2000s had not led to much employment generation (Chandrasekhar, 2004). The

overall employment growth story of the country during the last two decades was not

appreciable as it declined slightly over the two decades (Raveendran, 2007). This

was particularly true for rural areas while urban areas maintained a better annual

growth rate (Table 3.1). The percentage of unemployed to total labour force in the

country is given in Table (3.2).

3.2 Employment Generating Programmes Implemented in India

Basic Objective of the development planning India is “growth with social

justice” since independence. Existence of poverty and unemployment is considered

as the most serious issues against the development. This situation forced the

governments to give special emphasis on schemes providing additional employment

opportunities and various special schemes for generating- both self-employment and

wage employment. Some major initiatives in this side are listed below.

3.2.1 Self-employment programmes in India

As per the 55th round of the National Sample Survey (NSS) on Employment

and Unemployment in India 1999-2000, 55 per cent of the employed males and 57

per cent of the employed females in the rural areas were self-employed persons. At

the same time, only 9 per cent of the employed males and 3 per cent of employed

females were regular employees (Government of India, 2012). The Planning

Commission for the 10th Five year Plan had pointed out that about 36 to 40 per cent

of the rural population still required casual/wage employment. Obviously,

programmes for self-employment of the poor have been an important component of

the anti-poverty programmes implemented through government initiatives in rural

India. A review of the various self-employment programmes implemented in the

country is mentioned below.

1. Integrated Rural Development Programme (IRDP): IRDP was central

Government sponsored self –employment scheme introduced in all Blocks of the


country in 1980 during Sixth Five year plan. Scheme was introduced as cost sharing

base in the ratio of 50:50 by State and Central Governments. Central funds were

allocated to state in the ratio of number of rural poor in the state to the total rural

poor in the country. The programme intended to provide self-employment in

activities like sericulture, animal husbandry and land based activities in the primary

sector. Targeted groups of beneficiaries of IRDP include small and marginal

farmers, agricultural laborers, rural artisans living below the poverty line, SC/ST

families and physically challenged persons. Another outstanding feature of IRDP

was that there was an assured coverage of 50% SC/ST families, 40% women and 3

% physically handicapped persons.

Table 3.3: Details of Assistance Granted and Beneficiaries of IRDP

Plans No. families

Assisted in lakh

Total Investment in lakh (Rs.)

Subsidy Released

Credit Given

Total

Sixth Plan 165.62 166118 310160 476278

Seventh plan 181.77 270802 537254 808056

Annual Plan 1990-91 28.98 66816 119002 185818

Annual Plan 1991-92 25.37 65774 114733 180507

Eighth Plan 108.36 397495 756630 1154125

Ninth Plan 33.84 174473 417071 591544

Total 543.94 1141478 2254850 3396328


IRDP was very successful in eradicating rural poverty in India to a certain

extent, but along with the growth of Indian economy serious criticism were raised

from various corners against the performance of the programme and recovery of

debt. As per the report of Planning Commission of India only 41% of the debt was

recovered as on March 1996. It also affected badly on health of the Indian Lending

financial Institutions due to high rate NPA. On 1st April 1999 Central Government

of India merged the Scheme with Swarnajayanti Gram Swarozgar Yojana (SGSY)


2. The Scheme for Training Rural Youths for Self Employment (TRYSEM):

The scheme was introduced in August 1979 as an allied programme to strengthen

IRDP. Main objective of the programme was to train about 2 lakh rural youths to

make them able to do self-employment. 40 youths from each Block who belong to

rural family having annual income less than 3500 per annum were selected for

training under this scheme. The scheme was highly successful in generating self-

employment opportunities for rural youths. Along with IRDP TRYSEM also

merged into Swarnajanti Gram Swarozgar Yojana (SGSY) in 1999. Details of

performance of this scheme is presented below

Table 3.4: Details of Assistance given and Performance of TRYSEM

Plans Fund

Alloted (Rs. in lakhs)

Fund released

(Rs.in lakhs)

No. of youths trained

No. of Youths

Employed

% of trained youths

employed

6th Plan 387.90 NA 10.148 5.803 57.2

7th Plan 12884.71 NA 9.977 5.952 59.6

1991-91* 326.93 NA 2.360 1.651 70.0

1991-92* 4879.31 NA 3.071 1.675 54.5

8th Plan 35563.70 37007.43 15.273 7.522 49.3

9th Plan 13284.83 15503.4 4.739 2.18 46.01

Total 70261.379 52560.83 45.568 24.783 54.4 *Annual plans


3. Development of Women and Child in Rural Areas (DWCRA): DWCRA was

introduced in September 1982, in 50 Districts in India on a test basis on account of

the lesser provision and benefit for women under IRDP. The basic objective of

DWCRA was to provide necessary support to woman to enable them to take up

income generating activities. Assistance was given individually or to organized

groups of women. Under the scheme, women were granted assistance to take up

viable economic activities with Rs. 15,000 as a one-time grant to be used as a


revolving fund. DWCRA includes both central and state assistance. The assistance

from UNICEF also made available to the extent of Rs. 5.40 crore. Assistances were

granted to huge number of individuals and group under this programme. The

DWCRA was merged into Swarnajayanti Gram Swarozgar Yojana (SGSY) in 1999.

Details of Central Assistance, Financial support given under the scheme and no of

beneficiaries are depicted below.

Table 3.5: Financial Details of DWCRA

Plans Central Assistance

(Rs. in lakhs) Expenditure (Rs.in lakhs)

No. of Women Benefited

6th Plan 298.52 - 52170

7th Plan 3663.52 3099.02 469704

1991-91* 898.00 500.67 109557

1991-92* 962.73 784.19 208012

8th Plan 19074.18 22453.78 2268327

9th Plan 14093.23 15411.25 1036932

Total 38990.18 42248.86 4144705

*Annual plans


4. Supply of Improves Toolkits to Rural Artisans (SITRA): This programme was

introduced in July 1992 to provide improved tool kits for rural artisans all over the

country at 90% subsidy. Key objectives of this programme were ensuring increased

income, improved quality of life, enhanced production and reduction of migration

from rural to urban. The scheme aims at supply of a kit of improved hand tools with

a financial ceiling Rs.2000, for which beneficiaries need to pay only 10%. Scheme

was later merged with Swarnjayanti Gram Swarozgar Yojana (SGSY) in 1999.

Financial analysis of the scheme is given below.


Table 3.6: Financial Analysis of SITRA

Plan Year Fund Allotted (Rs. In crores)

Expenditure (Rs. In crores)

Beneficiaries (no. in lakhs)

Eighth Five year Plan

1992-93 16.86 13.87 0.84

1993-94 23.23 16.60 1.08

1994-95 29.00 22.90 1.26

1995-96 40.00 28.69 1.55

1996-97 40.00 36.02 1.80

Annual Plans 1997-98 30.83 34.28 1.63

1998-99 59.51 55.56 2.47

Total 239.33 209.92 10.61


5. Ganga Kalyan Yojana (GKY): As a sub scheme of IRDP Ganga Kalyan Yojana

was introduced in the financial year 1996-97, this programme focuses on irrigation

requirements of small and marginal famers of the country. Central Government

released the fund in March 1997 and only Rs. 1093.545 lakhs were utilized during

the financial year 1997-98. Programme reached to 6142 individuals and 1536

groups of the country, provision for wells and tube wells were allotted to them. Due

to some administrative issues scheme was discontinued from 1998-1999 and

unutilized funds were pooled with Swarnajayanti Gram Swarozgar Yojana (SGSY)

from 1.4.1999 onwards.

6. Million Wells Scheme (MWS): This scheme was introduced in the year 1988-89

by The Ministry of Rural Areas and Employment (MRAE). The main objective of

this scheme was to provide open wells free of cost to poor SC/ST farmers. If such

wells were not feasible, the amounts allotted were permitted to utilize for minor

irrigation projects. The beneficiaries had to undertake the construction of well. So

the scheme was helpful to create both employment and capital assets. Below given

table shows the performance of this scheme.


Table 3.7: Performance Analysis of MWS

Plan Total Fund Allotted

(Rs. In Crores) Expenditure

(Rs. In Crores) No. of Wells Constructed

7th Plan 271.43 241.16 137978

1990-91* 524.34 279.74 56434

1991-92* 524.634 495.19 172327

8th Plan 3727.44 2990.59 743031

9th Plan (1997-99) 1120.17 969.95 198663

Total 6168.32 4976.63 1308433

*Annual Plans


7. Swarnjayanti Gram Swarozgar Yojana (SGSY): This programme was a key

self-employment scheme to bring the poor rural families (swarozgaris) to APL

categories. Objective of this programme was to provide income generating assets

with the support of Bank credit and Government subsidy. Assumption of the

government while introducing this scheme was that the rural poor had competencies

of producing valuable goods and services, if they were given the right support and

assistance by the Government. It was launched in April 1999, by merging various

rural development programmes like IRDP, TRYSEM, DWCRA, SITRA, GKY and

MWS. This scheme was introduced by the District Rural Development Agencies

(DRDAs) with the active involvement of local bodies, banks, State Government and

NGOs. The fund for the operation of the programme was shared between Centre and

State in the ration 75:25. SGSY covered all corners of self-employment such as

selection of key activities, planning of activity clusters, organization of poor into

Self Help Groups (SHGs) having 10-15 members, and building their capabilities

through social mobilization, training and skill development, generation of

infrastructure, technical and marketing support.

The programme covered all aspects of self-employment such as selection of

key activities, planning of activity clusters, organization of the poor into Self Help

Groups (SHGs) having 10-15 members, and building their capacities through social


mobilization, training and skill development, creation of infrastructure, provision of

technology and marketing support, etc

As per the guidelines, the SHGs had to open an account in a nearby bank to

get the loan from that the bank and also to deposit the fund raised by them in the bank.

The SHGs would receive a revolving fund of Rs. 25,000 from banks as cash credit

facility. Of this, Rs. 10,000 would give to the bank by the DRDA and the banks were

to charge interest only on the sum exceeding Rs. 10,000. The subsidy allowed under

the programme was uniform at the rate 30 per cent of the project cost, subject to a

maximum of Rs.7500 per individual Swarozgari, 50 per cent of the project cost

subject to a maximum of Rs.10000 in the case of STs & SCs and disabled

Swarojgaris, 50 per cent of the cost of the scheme subject to a ceiling of Rs.1.25 lakh

for group projects. The monetary ceiling on subsidy was not applicable to irrigation

projects. Detailed Report of the programme are given in the below table.

Table 3.8: Expenditure and Benefits Details of SGSY

Plan Year Total Fund

Allotted (in crores)

Total Fund Utilised

(in crores)

SHGs Formed

(in lakhs)

No. of Beneficiaries

(in lakhs)

9th Plan (last 3 years)

1999-00 1962.01 959.86 2.92 933868

2000-01 1608.18 1117.94 2.23 1006152

2001-02 1299.55 970.32 4.35 937468

10th Plan

2002-03 1178.22 921.11 3.99 826267

2003-04 1214.88 1043.43 3.92 896895

2004-05 1511.2 1290.83 2.66 1115928

2005-06 1558.53 1338.78 2.76 1151116

2006-07 1724.55 1424.20 2.46 1691926

11th Plan (first four

years)

2007-08 2394.17 1965.97 3.07 1699295

2008-09 3003.05 2285.39 5.64 1861857

2009-10 3495.65 2779.19 3.89 2085177

2010-11 3752.21 2804.04 3.11 2109986

Total 24702.2 18901.0 37.07 16315953



After the 11th plan Ministry of Rural Development observed various issues

with SGSY like poor administration and management of the scheme, inadequate

banking staffs and higher rate non repayment of loans. Since 2011 SGSY has been

renamed as National Rural Livelihood Mission (NRLM). NLRM is designed as a

demand driven scheme. State Government can formulate own poverty eradication

projects based on their past experience, resources and skill base.

3.3 Wage Employment Programmes in India

Development planning of India was always characterized by poverty

eradication since the starting of planning process in India in 1951. Wage employment

programmes are the key ingredients poverty alleviation schemes. Wage employment

programmes were intended to provide employment not only during agriculture season

but also in times of natural calamities like flood, droughts etc. These schemes provide

assistance to create community assets like village ponds, schools, rural roads etc. A

brief discussion of the series of wage employment programme for rural poor launched

by the Central Government of India is given below.

1. Rural Manpower Programmes (RMP): It was first among the various wage

programmes introduced in India and was launched in 1960-61. Main objective of

the programme was to provide 100 days of employment to at-least 2.5 million

people by the last year of third plan. In the starting stage it was introduced in 32

community development blocks on a test basis then extended to 1000 blocks by the

end of 1964-65. The programme closed in the year 1968-69 after generating 137

million man-days of employment.

2. Rural Work Programme (RWP): Central Government of India after evaluating

the causes of failure of the RMP, decided to revise it as RWP. This scheme started

in the year 1970-71 and aimed to generate 100 days employment for 1 lakh people

during the first year, and 2.5 million persons by the end of the fourth plan. Growth

rate of the scheme was very slow due to resource constraints and the programme

failed to achieve even its lower target.


3. Crash Scheme for Rural Employment (CSRE): It was introduced in 1971-72

with double edged objective of direct employment generation and creation of

durable assets like roads, culverts, soil conservation etc. The programme was

expecting to crate 2.5 lakh man-days per annum in each district. The

implementation of the scheme was under the control of State Governments even the

full financial support was from Central Government. This scheme was also not

reached the expectation due to bad implementation and supervision from the side of

State Governments.

4. Pilot Intensive Rural Employment Programme (PIREP): Experience from the

implementation of RMP and CSRE, lead to the realization that more concentrated

efforts were needed to have considerable impact of the employment generation

schemes. PIREP was started in November 1972 in selected 15 Community

Development Blocks for a three year period. The main objective of the scheme was

to provide opportunity to unskilled labor and creation of assets. The project

completed its full term of three years and generated 18.16 million man days of

employment.

5. Small Farmers Development Agency Programme (SFDA): This programme

started operation in the year 1971 with coverage of 1818 Blocks in the country. The

scheme aimed to increase the income level of identified small and marginal farmers

and agricultural laborers. Assistance was given to work like minor irrigation,

dairying, horticulture etc. through Community Development Blocks. The

programme was not so successful due to its low coverage and the main reasons for

this were the progressive erosion in the integrated functioning of the Block agency,

inadequacies of the participating credit institutions, and lack of coordination and

adequate support from the departments concerned. The programme was merged

with IRDP in 1980.

6. Food for Work Programme (FWP): By introducing this scheme Government of

India aimed to provide wage of employment fully or partly in food grains. This


scheme was introduced for generating additional employment opportunities for men

and women in rural areas and to create durable community assets. By 1978-79 this

scheme was able to create 372.8 million man-days of employment utilizing 12 lakh

tons of food grains. Due to administrative and operational issues Government

decided to revamp and restructure the programme and it was renamed as National

Rural Employment Programme in October 1980.

7. National Rural Employment Programme (NREP): NREP was implemented to

help rural population mainly depending on wage employment by providing

additional gainful employment during lean agricultural periods. The objective of the

scheme was to create durable commodity assets and raising the nutritional standard

of the rural poor. It was centrally sponsored scheme implemented in April 1981, but

the financial burden was shared between State and Centre on 50:50 bases. This

programme created 1477.53 million man days of employment with an expenditure

of Rs.2939.87 crore. On 1st April 1989, the scheme was merged into Jawahar Rozga

Yojana.

8. Rural Landless Employment Guarantee Programme (RLEGP): RLEGP was

introduced on 15th August 1983 with an expectation of expanding employment

opportunities for the rural landless. The programme intended to provide

employment to at-least one member of every landless household at a maximum of

100 days in a year. This scheme focuses on creating durable assets for enhancing

rural infrastructure so as to create employment opportunities for the rural landless.

Scheme was fully financed by the Central Government and implemented through

the state governments.

9. Employment Assurance Scheme (EAS): This scheme was launched in

identified 1778 backward Blocks situated in drought prone, desert, tribal and hilly

areas on 2nd October 1993. The objective of the scheme was to provide 100 days

assured casual manual employment during lean agriculture season. The scheme was


available to a maximum of 2 members from a family in the age group 18 to 60

years. EAS was demand driven scheme with 75% Central assistance. The

programme was merged into SGRY from September 2001.

10. Jawahar Rozgar Yojana (JRY): JRY was started on 1st April 1989 by merging

two wage employment programmes NREP and RLEGP. It was a Centre sponsored

scheme with a cost sharing basis of 80:20 between Centre and State. Objectives of

the scheme were to provide sustained employment to rural poor by strengthening

rural economic infrastructure and assets. Priority was given to enhancement of

productivity of land. People belongs to BPL category were the target group of this

scheme. 22.5 % of the annual allocation was reserved to SC/ST category and

another 30% was reserved for women. Initially, the JRY also included the Indira

Awas Yojana (IAY) and the Million Well Scheme (MWS). Both these schemes

were made into independent schemes in 1996. JRY had been restructured and

renamed as JGSY with effect from April 1999.

11. Jawaha Gram Samriddhi Yojana (JGSY): This scheme was implemented

on 1st April 1999 to ensure improved quality of life of rural poor by providing

them additional employment. Primary objective of this scheme was to create

infrastructure and durable assets at the village level to ensure sustained

employment. Gram Sabhas were the approval authority of the various schemes

under this programme. It was implemented as a Centre sponsored scheme on cost

sharing basis between Centre and State in the ratio of 75:25. Fund allocation for

the scheme was very less and only 6227.04 man- days of employment could be

generated under JGSY. Later the scheme was merged into SGRY during

September 2001.

12. Sampoorna Grameen Rojgar Yojana (SGRY): Central Government of India

announced a new scheme on 25th September 2001 called SGRY to provide

importance for additional wage employment, infrastructural development, food

security and improving nutritional level in rural areas. Initial provision for the


scheme was Rs.10000 crore and 50 lakh tonnes of food grains costing 5000 crore

was also provided at free of cost. Programme was open to all rural poor who were in

need of wage employment and ready to do manual and unskilled work in and around

their village. This scheme was introduced through Panchayati Raj institutions.

Scheme was merged into MGNREGA from April 2008 onwards.

3.4 Mahatma Gandhi National Rural Employment Guarantee Act

(MGNREGA)

By the end of 2005 Indian economy had completed 50 years of the planning

era, but condition of rural poor could not be improved to the expected level. A

detailed analysis of the statistics shows that population included in the BPL category

declined from 45% to 26 % by the year 2004-2005 and the rural poverty rate had

declined from 47 % in 1951-52 to 28 %. Unemployment rate of rural population in

India was always kept lower digits but the high rate rural poverty was a burning

issue before the policy makers. All the employment generating programmes in India

Implemented till 2005 were either discontinued or merged with other programmes

as they could not create the expected results in employment generation and poverty

eradication.

In this confusing situation United Progressive Alliance (UPA) led

Government decided to bring a new demand based programme for the rural mass by

introducing National Rural Employment Guarantee Act in Indian Parliament during

September 2005. The Act was renamed as Mahatma Gandhi national Rural

Employment Guarantee Act (MGNREGA) in 2009. Initially the scheme was

implemented in 200 backward District of the country and decided to cover all the

rural Districts of the country with in a period of five years, but it actually took only

3 years to cover the entire nation. Below given table explains the three phases of

MGNREGA implementation.


Table 3.9: Phases of MGNREGA Implementation

Year Districts Covered

2006 200 Districts

2007 Another 130 Districts

2008 Balance Districts

Source: MGNREGA website

In 2005 3.8 crore households were registered under the scheme and the

number of registration reached 13.14 crore by the year 2013-2014. By the end of

2014 1646 crore person days of employment were generated under the scheme.

MGNREGA guaranteed 100 day of employment to each rural family in a year, but

the average number of person days generated during the 9 year period was only 46

days. Below Given table explains implementation phases of MGNREGA in Kerala.

Table 3.10 Implementation Process in Kerala

Year District Covered

2006 Palakkad and Wayanad

2007 Idukki and Kasaragod

2008 Other 10 Districts


In Kerala 2.14 lakh household were enrolled onto MGNREGS during 2006-

2007 and it has been increased to 28.13 lakh by the end of 2013-2014. In 2006-2007

scheme provided employment for 99000 households and in 2013-14 the number

increased to 15 lakh

Obviously, as a result of the various programmes implemented by the

Government from 1960-61 to generate employment and to reduce rural poverty, the

proportion of the people living below the poverty line has been declining over the

years. Poverty seems to have declined faster in the last five years due to greater

emphasis on employment programmes in rural areas, combined with creation and

strengthening of common property resources. But, still, about 30 per cent of the


population of the country living below the poverty line. The higher incidence

poverty existing in the country signifies the necessity of programmes like

MGNREGA to narrow down poverty and to improve the living standard of the rural

community.

Table 3.11: Steps of Indian Journey towards MGNREGA (1952-2009)

Sl. No.

Scheme/ Act Date/ Year

1 Community Development Programme(CDP) 1952

2 Rural Manpower Programme (RMP) 1960-61

3 Crash Scheme for Rural Employment (CSRE) 1971-72

4 Pilot Intensive Rural Employment Programme (PIREP) 1972

5 Marginal Farmers and Agriculture Labour Scheme (MFAL) 1973-76

6 Drought-Prone Area Programme (DPAP) 1973-76

7 Small Farmers Development Agency (SFDA) 1974

8 Twenty Point Programme (TPP) 1975

9 Food for Work Programme (FWP) 1977

10 Training Rural Youth for Self-Employment (TRYSEM) 1979

11 Integrated Rural Development Programme (IRDP) 1980

12 National Rural Employment Programme (NREP) 1981

13 Rural landless Employment Guarantee Programme (RLEGP) 1983

14 Jawahar Rozgar Yojana (JRY) 1989-94

15 Swarnajayanthi Gram Swarozgar Yojana (SGSY) 1999-2000

16 Sampoorna Grameen Rozgar Yojana (SGRY) 2001

17 National Food for Work Programmed (NFFWP) 2004

18 Notification of NREGA 1st Sept. 2005

19 Implementation of NRGA in 200 Districts 2nd Feb. 2006

20 Extended NREGA to additional 130 Districts 2007

21 Extended NREGA to all the Districts in India 1st April 2008

22 NREGA renamed as MGNREGA 2nd Oct. 2009

Source: Planning Commission


3.4.1 Objectives of MGNREGA

The National Rural Employment Guarantee Act was approved by Indian

Parliament in its monsoon session on 5th September 2005. It was within a year of

formation of first UPA Government and marked has fulfillment their election

promise. The Act currently have a vide coverage over all 645 rural districts of India.

Act aimed to enhance standard of living of India rural population by providing at

least 100 days of wage employment to rural adult households who are willing do

unskilled manual work. Primary objective of the Act was to ensuring livelihood

security on Indian rural mass by guaranteeing 100 days of wage employment in a

financial year. The NREGA Act itself outlines the primary objective of the Act as-

“An Act to provide for the enhancement of livelihood security of the

households in rural areas of the country by providing at least 100 days of

guaranteed wage employment in every financial year to every household

whose adult members volunteer to do unskilled manual work and for

matters connected herewith or incidental thereto”

The Ministry of Rural Development (MoRD) in 2014 outlined the other objectives

of the Act, which include:

Creation of productive assets both of prescribed quality and durability by

providing wage employment.

To support the entire community by creating employment, enhancing

agricultural productivity and increasing natural resources.

Proving strong social safety wall for the vulnerable group like women,

Scheduled Tribe and Scheduled Cast by providing a fall-back employment

source.

Strengthening Natural Resource Management (NRM) through works that

address causes of chronic poverty like droughts, deforestation and soil

erosion to ensure sustainable development.

Empowering rural mass of India through the process of right based law.


Strengthening grass root process of democracy and infusing transparency

and accountability in governance.

3.4.2 The Salient design features of MGNREGA

For reaching the desired objectives, MGNREGA has several design features

which were not included in the other wage employment schemes implemented

earlier. India has a long history of public-works based wage employment guarantee

programs and its experiments with them dates back to the 1980s. Outstanding

features over its predecessors are outlined below.

The entire wage guarantee scheme before MGNREGA had their beginnings

in an executive orders, NREGA is an Act enacted in Indian Parliament, and

so it has both legal superiority and constitutional approval.

The Act is irrevocable and can be dismissed only by another Act of Parliament.

The Act has multiple objectives like providing minimum livelihood security,

development of rural infrastructure etc. So it is not only a work based

employment programme.

The basic thrust of the Act is entitlement and it provides provisions for

minimum wages, appropriate worksite facilities and ensures at least 1/3 of

female participation.

It is a first of its kind experiment on partially decentralised planning,

implementation and monitoring of programme through the Panchayati Raj

Institutions (PRIs) across the state.

Other key features of the Act MGNREGA for fulfilling its desired objectives and

keeping its distinctive characteristics are:

The Act offering life dignity to poor rural household in India by

guaranteeing minimum 100 days of wage employment to ensure minimum

livelihood security.

This scheme is a demand driven employment strategy allowing for the self-

selection of participants.


Unemployment creates more issues to Government and inability of state to

provide employment may always be questionable. So programmes like this

help Government officials to provide gainful employment.

Since the NREGA was enacted in Indian Parliament it is a legal obligation to

provide fund for the scheme and not subject to budget allocation. So the

livelihood of poor is not contingent upon the fiscal allocation.

Another outstanding feature of this programme is that 60% of the total cost

scheme should be spent for wages for unskilled labor and the balance 40%

on wages of semi-skill, skilled and material cost.

100% central funding is available for wage of unskilled labour and 75%

funding from Centre for wage of Semi-skilled, Skilled and Material costs.

Fund allocation of the scheme is like non-lapsable corpus fund which can

carry over to subsequent financial years and not like budgetary allocation.

MGREGA give emphasis on the work of water conservation and harvesting,

both very important in case rural people.

Programe is designed as a decentralised implementation mechanism through

PRIs.

For ensuring transparency and accountability social auditing is also

suggested under the Act.

Workers are provided with amenities like drinking water, shelter, first aid

and crèches.

Under this scheme as possible no contract is permitted and use of machine

also banned.

Act contains provision for appointing ombudsman and to arrange three-tier

system for grievance redressal mechanism.

Under no circumstances shall the laborers be paid less than the wage

prescribed in the Act.

Progamme Officer and the Grama Panchayat may assign work to a person

who applied for employment under the scheme.


Provision for regular inspection and supervision of works taken up under the

scheme shall be made to ensure proper quality of work as well as to ensure

that the total wages paid for the completion of the work is commensurate

with the quality and quantity of work done.

All the accounts and records of the programme shall be made available for

public scrutiny and copies of the documents may be provided on demand

after paying the fee specified in the Act.

Muster rolls of each scheme or project under the scheme shall be made

available in the office of the Gram Panchayat for inspection of any person

interested, after paying such fees specified in the Scheme.

Table 3.12: Multiple Goals of MGNREGS

Sl. No. Goal Action

1 Protective Assistance ensuring consumption smoothening and immediate welfare.

2 Preventive Insurance facilitating for risk taking such as investment in agriculture.

3 Promotive

a) Economic stimulus through cash accumulation, local production and enhancing market

b) Harmonizing labor market, promote rural nonfarm employment (RNFE) and equalize wage rate

c) Facilitate human capital formation through skill development; and

d) Alleviate poverty, effect equity, reduce distress migration and empower women

Source: Sharif and Abusaleh (2009)

3.4.3 Funding Patten of MGNREGA

The scheme was introduced in 2006 as a centrally sponsored cost sharing

scheme between Centre and State Government. Cost related to the following activity

will be provided by the Central Government:

The full amount of wage due to unskilled manual workers


75% of the cost of material used and 75% of wages paid to semiskilled and

skilled workers.

Expenses on administration as determined by Centre including salary and

allowances of Programme Officer, Supporting staff and work site facilities.

Expenses of National Employment Guarantee Council (NEGC).

State Governments are labile to meet following expenses:

25% of the cost of material used and 25% of the wages paid to semiskilled

and skilled workers

If State Government is not able to provide wage employment on time, they

are liable to pay unemployment allowance.

Administration cost of State Employment Guarantee Council (SEGC)

Salary of State level and District level officers appointed under MGNREGA

Central share of the programme will be released to District Programme Coordinator

and corresponding State share to the District will be released by the Commissioner

for Rural Development and Local Self Government to the District Programme

Coordinator.

Table 3.13: Major Changes in MGNREGA (2006-2014)

Sl.

No. Timing Event Changes in Programme

1 February

2006

NREGA Act Enacted

and launched in 200

Backward Districts

A scheme to provide minimum 100days of

wage employment to rural poor introduced

as Center sponsored programme. Centre

State fund sharing in the ratio of 90:10.

2 April 2007 Phase II expansion Scheme extended to 130 additional districts.

3 April 2008 Phase III expansion Scheme extended to all rural districts in

India and fund sharing ratio changed 75:25.

4 2009

October Renamed Programme re named as MGNREGA.


Sl.

No. Timing Event Changes in Programme

5 2011

September

Reforms in

MGNREGA

Actions were taken to make the programme

fully demand driven.

Initiated appointment of full time dedicated

Programme officer to reduce delay in wage

payment and also to ensure number of work

days as per demand.

Habitation level Committees formed to

improve quality of assets created.

District level ombudsman for proper

grievance redressal

6 2012 May NREGA 2.0 launched

Rural asset creation became a stated

objective.

Allow the works in private land and land of

small and marginal farmers.

Skills development of workers also became

part of objective.

Permits private contracts in implementation

of MGNREGA work.

Permits use of machines.

Convergence with projects from other

ministries.

Appointing dedicated staff at district level

for making awareness among people about

their rights under the Act.

7 Januray

2014

Expansion of

coverage

MGNREGA to include works related to

rural sanitation in collaboration with Nirmal

Bharath Abhiyaan (NBA) scheme, also

toilets build under MGNREGA.

Source: 1. MGNREGA Circulars

2. Rajiv Ranjan (2016)


3.4.4 Qualifications for employment and rights of workers under the Act

Act proposes certain conditions for getting enrolled in the scheme and the

same time once a person got registered under the Act he is capable to enjoy some

protections as specified in the Act. A detailed description these two are given

below:

a) Adult member from a rural family who are willing to do unskilled manual

labour may submit their request to Gram Panchayat for the registration of

their households and issuance of job card.

b) After the verification of request, Gram Panchayat will register the household

and will issue a job card.

c) Registration made under the Act is valid for five years, and may be renewed

from time to time.

d) Every adult member of a registered household whose name appears in the

job card shall be entitled to apply for unskilled manual work.

e) All the registered members are

f) able to get employment as per their request subject to a maximum of 100

days in a financial year.

g) Programme Officer should ensure the availability of employment within

fifteen days after the receipt of application and he should also ensure 1/3

participation of women in each work.

h) Application for work must be for at least fourteen days continuous work.

i) Intimation of work shall be communicated by means of a letter sent to the

address mentioned in the job card and notice in this regard may be displayed

at the office of the Panchayat.

j) Employment shall be provided nearby places of applicant’s village where the

applicant resides at the time of applying (within a radius of 5 kms).


k) Act prescribes certain conditions for starting a new work, they are; at least

50 laborers become available for such work and the laborers cannot be

absorbed in the ongoing work. These conditions shall not be applied to a

work as determined by the State Government.

l) If employment is not available within the specified radius, it must be

provided with in the block. In this case an extra transportation allowance of

10 % of the wage shall be paid.

m) In case where unemployment allowance is paid the Programme Officer

should a letter to District Programme Coordinator (DPC) indicating the

reasons why it was not possible for him to provide employment.

n) List of persons who got employment under the scheme shall be displayed on

the notice board of Gram Panchayat.

o) In case of any injury or accident happened to any person in the course his

employment, he is eligible for medical treatment.

p) Facilities like drinking water, shelter and first aid box should be arranged at

the site.

q) If the number of children below the age of six accompanying women

working at any site is five or more. One women worker can be deputed to

look after such children and she is eligible for the wage rate.

r) Wage under the scheme may be paid either wholly in cash or in cash and

kind. If the wage is paid in kind at least 1/4th of the wage shall be paid in

cash only.

s) Act does not permit any discrimination on the ground of gender and

provisions of Equal Remuneration Act, 1976 also applicable here.


Table 3.14: Notified Wage and its Enhancement from 2006 to 2014 (Rs. /Day)

SL. No.

State Minimum

wage in 2006-07

Revised Minimum Wage % of increase

2005 to 14 1

.1.0

9

Up

to

1.1.

2011

1.1

.11

1.4

.12

1.4

.13

1.4

.14

1 Assam 62 79.60 100 130 136 152 167 169

2 Andhra 80 80 100 121 137 149 169 111

3 Arunachal 57 67 80 118 124 135 155 172

4 Bihar 68 89 100 120 122 138 158 132

5 Gujarat 50 100 - 120 122 138 158 234

6 Haryana 95 141 - 179 191 214 236 148

7 Himachal 70 100 - 150 157 171 193 1756

8 Kashmir 45 70 100 121 131 145 157 249

9 Karnataka 63 82 100 125 155 174 191 203

10 Kerala 125 125 136 150 164 180 212 70

11 MP 59 91 100 122 132 146 157 166

12 Maharashtra 47 72 100 127 145 162 168 257

13 Manipur 66 81.4 - 126 144 153 175 165

14 Meghalaya 70 70 100 117 128 145 153 119

15 Mizoram 91 110 - 129 136 148 170 87

16 Nagaland 66 100 - 118 124 135 155 135

17 Orissa 55 70 90 125 126 143 164 198

18 Punjab 101 105 105 153 166 184 200 98

19 Rajasthan 73 100 - 119 133 149 163 123

20 Sikkim 85 100 - 118 124 135 155 82

21 Tamil Nadu 80 80 100 119 132 148 167 109

22 Tripura 60 85 100 118 124 135 155 158

23 UP 58 100 - 120 125 142 156 169

24 West Bengal 67 75 100 130 136 151 169 152

25 Chhattisgarh 59 75 100 122 132 146 157 166

26 Jharkhand 76 92 99 120 122 138 158 108

27 Uttarakhand 73 100 - 120 125 142 156 114

28 Goa - 110 - 138 158 178 195 77

29 Andaman - 130 - 170 178 198 222 71

30 Nicobar 139 - 181 189 210 235 69

31 Puducherry - 80 100 119 132 148 167 109

32 Dadar - 108.2 - 138 157 175 182 68

33 Daman &Diu - 102 - 126 136 150 170 67

34 Lakshadweep - 115 - 138 151 166 195 70

35 Chandigarh - 140 - 174 189 209 227 62.14

Source: Website of MGNREGA


3.4.5 Implementing and monitoring agencies of the scheme.

Central Employment Guarantee Council (CEGC): Ministry of Rural Development,

Central Government of India constitutes Central Employment Guarantee Council to

perform the duties assigned by the Act. The council headquartered in Delhi. Council

includes a Chairperson, members nominated by Central Government and members

nominated State Government, not more than 15 non official members representing

PRIs.

Functions of CEGC

Establishment of Central evaluation and monitoring system.

Providing advices to Central Government on Implementation of the scheme.

Review and provide recommendations on the functioning of monitoring and

redressal mechanism.

Promote widest publicity on various schemes under the Act.

Compilation of annual reports to be submitted before the Parliament by the

Central Government.

Any other duty or functions as may be assigned by the Central Government.

State Employment Guarantee Council (SEGC): For regularly monitoring and

reviewing the implementation of the scheme each State Government shall constitute

a State level Council. Council includes a Chairperson and members determined by

the State Government.

Functions of SEGC

Advising State Government on matters concerning the implementation of the

scheme.

Determining the preferred work.

Review of monitoring and redressal mechanism and recommending

improvement.

Making widest publicity of the Act and Schemes.


Coordinating with CEGC for the implementation and monitoring of various

schemes.

Preparing annual report to be submitted before the State Assembly.

Any other functions assigned by Central Council or State Government.

Gram Panchayat: It is the duty of Gram Panchayat to identify the project to be

included under a scheme as per the recommendations of Gram Sabha and Ward

Sabha. It shall forward proposals of development project to Programme Officer for

scrutiny and primary approval prior to the commencement of the year in which it is

proposed to be executed. Muster Roll of approved works will be forwarded to the

Gram Panchayat by the Programme Officer.

Block Panchat: It has to approve the Block level plans and needs to forward the

same to District Panchayat for the final approval. Supervision and monitoring of

project taken up at the Gram Panchayat level and Block level are the other

responsibilities of Block Panchayat in connection with the Act. State Council has

power to assign other duties to Block Panchayat.

District Panchayat: District Panchayat has to approve and finalize Block level

shelf projects to be taken up under a programme under the scheme. It is the duty of

District Panchayats to supervise and monitor the project taken up at Block level and

District level. State Council is authorised to assign any duty to District Panchayat

from time to time.

District Programme Coordinator (DPC): DPC is appointed by the concerned

State Governments. District Collector or Chief Executive Officer of the District

Panchayath shall be designated as DPC for the proper implementation of

MGNREGA in the District. Functions of District Programme Coordinator are:

Provide assistance District Panchayat in discharge it functions under the Act.

Consolidate Block level plans and plans of other implementing agencies to

include them in shelf project to be approved by the Panchayat at District

level.


Accord administrative approval.

Supervise, review and monitor the performance of Programme Officers

Periodic inspection of the work in progress.

Redress the grievances of applicants.

Programme Officer: State Government Shall appoint a person at Block level as

programme officer not below the rank of a Block Development Officer. Programme

Officer needs to assist implementation of the scheme and discharging all other

function specified in the Act. He is also responsible to match demand for

employment and employment opportunities under his jurisdiction. Below given are

the functions of a Programme Officer:

Monitoring the project taken up by the Gram Panchayath and other

implementing agencies.

Sanctioning unemployment allowance to eligible households.

Ensuring prompt and fair wage payment.

Ensuring regular social audit of the work carried under the scheme and

authorized take action on the objection raised in the social audit.

Dealing the complaints that may arise in connection with the implementation

of the scheme.

Any other work assigned to him by the District Programme Coordinator/

State Government.


3.4.6 Performance of MGNREGA

Table 3.15: Coverage of MGNREGA at a Glance

Particulars FY

(2010-11) FY

(2011-12) FY

(2012-13) FY

(2013-14)

Total Number of District covered 635 636 644 645

Total Number of Blocks covered 6378 6568 6576 6601

Total Number of GPs Covered 246248 246358 247578 247643

Total Number of Villages Covered 778133 778288 778346 778411

Total no. of HH Registration(in Cr) 13 13.2 13.3 13.6

Total no. workers in job card (in Cr) 27.8 29.3 29.5 28.9

Total no. GPs with NIL exp 25389 26190 26097 112190

Total no. of works taken up (in lakh) 80.8 104.6 93.6 73.8

Total no. ongoing works (in lakh) 53.2 79.1 72 72.7

Unskilled Wages paid (Rs. in Cr) 24306.2 27152.8 26588.8 4407.3

Material and Skilled wages (Rs. In Cr)

10650.5 10430 9602.1 1184.5


Table 3.16: Financial Analysis of MGNREGA at a Glance (Rs.in CR)

Particulars FY

(2011-12) FY

(2012-13) FY

(2013-14) FY

(2014-15)

Admn Exp at GP level 301.8 307.6 224.7 6

Admn Exp at Block level 1191.7 1330.1 1329.3 104.4

Admn Exp at District level 514.4 482 592.6 30.5

Admn Exp at State level 108.055 32.936 200166 19.557

Total Admin Exp 2116 2152.7 2346.7 160.5

Total Exp 37072.7 39735.4 38537.6 5752.3

% Labour Cost to total 69.5 72.2 73.5 78.8

% Admin Exp to total 5.7 5.4 6.1 2.8



Table 3.17: Employment Creation by MGNREGA at a Glance (in lakhs)

Particulars FY

(2011-12) FY

(2012-13) FY

(2013-14) FY

(2014-15)

Wage employment to HH 506.4 498.9 478 116.3

Wage employment to Individuals 820 797.3 736 165.2

Wage employment to men 446.6 422.1 383.3 67.3

Wage employment to women 373.3 375.3 35.8 97.9

Wage employment to SCs 185 181.7 167.3 36.9

Wage employment to STs 147.4 142.9 129.3 28.6

Wage employment to disabled 4 4.6 4.8 1.6

Persons days generated 218.8 230.5 219.7 19

Avg. Wage rate per day per person(Rs.) 114.5 121.4 132.7 130.3

Avg. Days of employment per HH (no.) 43.2 46.2 46 16.3

No. HH completed 100 days employment

41.7 51.7 46.3 0.1


Ministry of Rural Development (MoRD) revealed in 2014 that MGNREGA

is performing in accordance with its objectives outlined in NREGA 2005.

Performance MGNREGA is assessed using various parameters like its ability to

provide employment and rural livelihood security; ability for social inclusion of

women, SCs and STs; its performance on financial ground; and its performance on

work taken and completed leading to asset creation for the rural areas. Below given

table shows the performance MGNRGA regarded to the provision of employment to

rural poor.


Table 3.18: Performance Analysis of MGNREGA

Particulars Financial Year

06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14

Total job card issued (in Cr)

3.78 6.48 10.01 11.25 11.98 12.50 12.79 12.72

Employment to HH(in Cr)

2.10 3.39 4.51 5.26 5.49 5.06 4.98 3.81

Total Person days (in Cr)

90.5 143.5 216.32 283.5 257.15 218.76 229.86 134.80

Person days of SC (in Cr)

22.95 25%

39.36 27%

63.36 29%

86.45 30%

78.76 31%

48.47 22%

50.96 22%

31.53 23%

Person days of ST(in Cr)

32.98 36%

42.07 29%

55.02 25%

58.74 21%

53.62 21%

40.92 19%

40.75 18%

21.09 16%

Person days of Women (in Cr)

36.4 40%

61.15 43%

103.57 48%

136.4 48%

122.74 48%

105.27 48%

117.93 51%

73.33 54%

Person days per HH (nos)

43 42 48 54 47 43 46 35

*up to December 2013, Source: MGNREGA website

Figure 3.1: Performance of MGNREGS between 2006-07 and 2013-14


Figure 3.2: Average Number of Person Days per Household between 2006-07

and 2013-14.

0

10

20

30

40

50

60

Person days per Household

Above table shows that total number of job card issued have increased

slightly from 2009-10 onwards. Job card is valid for five years, from 2009-10 to

2013-14 61.24 crore. Job cards have issued and which is covering almost half of

Indian population. This statistic shows the coverage of the programme and the

remarkable achievement of MGNREGA. From 2009-10 to 2013-14, scheme

provided 24.6 crores employment which is around 40% of the total job card issued.

There two reasons are there for this lower statistics, first, job cards were issued

persons who belongs to the same households and second, the Government’s

inability to employment to those demanded employment under the scheme.

Participation SC community shows and increasing trend up to the financial

year 2010-11 since inception. But there after it seems to decline till 2013 end.

Participation ST Community shows a continuing decline trend from 36% in 2006-07

to 16 % by 2013 end. Both of these statistics show that MGNREGA is not that

much attractive for SCs and STs and they have found better employment option

than that. So Government should take initiation to make them include in the scheme

to ensure social inclusion of both SCs and STs. Participation women in MGNREGA

shows an increasing trend from 40% in 2006-07 to 61 % in 2013-14. It is a positive


sign and can conclude that MGNREGA is very successful in social inclusion of

women in India. It also a sign another rural livelihood strategy where in male

members will select employment opportunity which provide as higher wage rate and

females trying to earn from MGNREGA to boost their total family income.

3.5 MGNREGA in Kerala

State of Kerala has welcomed the Scheme MGNREGA in the 2006 and the

State is very successful in exploiting all the opportunities offered by the scheme and

in Kerala programme came to know Kerala State Rural Employment Guarantee

Scheme. In Kerala the programme is implemented in February 2006 in the rural areas

of backward district Wayanad and Palakkad and it was extended to two other districts

Kasaragod and Idukki by February 2007. The remaining 10 districts were covered by

the programme in January 2009. Government of Kerala have implemented a detailed

guidelines for proper conduct of the programme in the state and the responsibility

implementing the scheme assigned to local self-governments. Local self-governments

in Kerala are implementing the scheme in association with Kudumbashree and it is

one of the outstanding features of the programme in the State.

Table 3.19: Demographic Profile of Kerala State

Sl. No. Particulars India Kerala

1 Total Population 1,028,737,436 31,841,374

2 Sex ratio 933 1058

3 Literacy ratio 64.8% 90.9%

4 Life expectancy at birth (2002-06)

Male

Female

Total

62.6

64.2

65.4

71.4

76.3

74

5 IMR (Per 1000 live birth)

Male

Female

Total

55

56

55

10

13

12

6 Birth rate per 1000 22.8 14.6

7 Death rate per 1000 7.4 6.6

Source: 2011 Census


Table 3.20: Work Profile of Kerala Population

Sl. No. Particulars India Kerala

1 Total Workers

Male

Female

275014476

127220248

7765645

2518242

2 Non Workers

Male

Female

257142296

369223308

7702969

13854518

3 Main Workers

Male

Female

Total

240147813

72857170

313004983

6460693

1776280

8236973

4 Marginal Workers

Male

Female

Total

34866663

54363078

89229741

1304952

741962

2046914

5 Cultivators (per cent)

Male

Female

Total

31.1

32.9

31.7

7.8

4.8

7

6 Agriculture Labours (per cent)

Male

Female

Total

20.8

38.9

26.5

13.9

21.5

15.8

7 Household Industry Workers (per cent)

Male

Female

Total

3.2

6.5

4.2

2.5

7.1

3.6

8 Other Workers (per cent)

Male

Female

Total

44.9

21.7

37.6

75.9

66.5

73.6

Source: 2011 Census


State of Kerala is considered as the well-developed State of India. High

Standard of living and literacy rate make the State different from other states in India.

State has a well-developed health care system and public distribution mechanism.

Kerala is one of the densest States in the country with 859 persons per sq.km which

three time to the national average. Kerala is the only state in India having a positive

sex ratio 1084 female per 1000 male. Literacy rate of the State was 47.18 % in 1951

and it has increased to 97.90% in 2011 census. As far food production is concerned

state has low base and facing a serious challenge to protect the farming area and to

improve productivity of important crops. Kerala Agricultural economy has been

undergoing a structural transformation since the mid-seventies by switching over a

large proportion of its traditional corps area devoted to subsistence crop like rice and

tapioca to more remunerative cash crops. More over the area under cultivation is also

declining consistently over last several years.

In Kerala rural households can be classified into two dimensions agricultural

and non-agricultural. Poor mass of rural Kerala are categorized as agricultural

labourers, fisher folks and the tribes. Three fourth of the rural working class are

casual laborers and among this 44% are engaged in agriculture and 31% in non-

agriculture. Non-agricultural activities include fishing in coastal areas, coir

processing, cashew processing, handloom and other traditional occupation. SCs and

STs constitute less than 10 % of the state population and greater incidence of

poverty. The combination of poverty and limited supply of fertile land for

cultivation and other environmental resources results in few opportunities of poor

grassroots actors to escape their dependent circumstances simply through hard

work. Kerala economy is witnessing a structural transformation for the last two

decades. People lost hope on agriculture and most of them sifted to other sectors.

Flow of NRI money also has certain impact on this side and it has enhances the pace

of structural reforms. The effects of this crisis are felt on rural household especially

the poor and rural marginalized, who depend entirely on agriculture for their

livelihood.


3.5.1 Unemployment in Kerala

Problem of unemployment is a burning issue in Kerala always and the state is

the highest unemployed state among the states of India which account 25.5%. The

condition of unemployment is said to prevail when supply of labor exceeds its

demand. From 1970s onward there has been a tremendous growth in the labor supply

because of the increase in number of women who seek employment. The problem of

unemployment in Kerala is not only about educational unemployment but also simple

unemployment of unskilled and semi-skilled workers. According to NSSO survey

2009-10 unemployment rates among males in Kerala was 12.7% and that of female

was 25.9% based on CDS approach. Rate of unemployment among rural population

was 17.3% and that of urban population was 14.8%. Below given table explains the

district wise unemployed rates in Kerala as per 2011 all India censes.

Table 3.21: District wise Details of Unemployment in Kerala

Districts Number of Unemployed Unemployment Rate (%)

Male Female Total Male Female Total

Thiruvananthapuram 64660 43937 108597 9 18.4 11.4

Kollam 38157 47087 85244 6.6 22.4 10.9

Pathanamthitta 26453 15410 41863 8.5 46.1 12.2

Alappuzha 29809 85680 115489 6.5 30.3 15.6

Kottayam 33508 79160 112668 7 25.2 14.2

Idukki 15933 14980 30913 5.8 14.9 8.3

Ernakulum 39532 60014 99545 4.7 24.7 9.3

Thrissur 52015 24014 76029 8.6 14.9 9.9

Palakkad 35435 37384 72819 5.3 15.1 7.9

Malappuram 35300 19556 54857 4.7 16.4 6.3

Kozhikode 25450 32345 57795 3.8 19.9 6.9

Wayanad 8029 7545 15574 4 10.7 5.7

Kannur 32337 79721 112059 6.7 36.8 16.1

Kasargod 28825 32986 61811 8.5 22 12.6

Kerala 465444 579819 1045262 6.4 22.3 10.5

Source: Directorate of Employment 2011


Unemployment rate is considerably high in south and north boundary of the

state, the highest rate in at Kannur 16.1% and the same is lower in Wayanad district

57%. In the southern districts from Trivandrum to Kottayam rate of unemployment

is relatively high comparing to other districts in the state. Rate unemployment in

Kerala raises due to number of factors like low rate growth of state economy,

changing profile of the work force and lack of appropriate educational system. The

organized sector in Kerala is not growing as expected to absorb the job seekers of

the state.

Table 3.22: Demand for Employment in Kerala from 2001-2011 (in Lakh)

Year Below SSLC SSLC & above Total Demand for

Employment (Lakhs) Persons % Persons %

2001 9.67 21.8 34.64 78.2 44.31

2002 7.12 19.3 29.68 80.7 36.80

2003 7.46 18.6 32.58 81.4 40.05

2004 6.73 17.9 30.83 82.1 37.56

2005 6.29 17.1 30.41 82.9 36.70

2006 6.37 16.5 32.19 83.5 38.57

2007 6.31 15.8 33.58 84.2 39.89

2008 6.22 15.1 35.22 85 41.44

2009 6.24 14.50 36.76 85.49 43

2010 5.94 13.87 37.27 86.12 43.28

2011 5.86 13.50 37.56 86.50 43.53

Source: Directorate of employment

Total demand for employment of persons having educational qualification

below SSLC is showing a declining trend. It is a sign of increase in the educational

level youths in Kerala. Same time demand for employment of persons having

education above SSLC is showing a growing trend year by year. For assisting

unemployed youths, Kerala State Government has introduced a scheme in 1982. As

per Kerala Panchayat Raj Act 1994 operation of this scheme was transferred to local

bodies. There are 337032 beneficiaries in the state under this Act as per the statistics


of 2011. In this scenario MGNREGA has large importance in Kerala. It has been

catering needs of large unemployed rural mass of Kerala from 2006 onwards.

3.5.2 Performance of MGNREGA in Kerala

State occupies just 1% of the total geographical region of the country and

this piece of land is considered as most beautiful, cleanest and peaceful parts of the

nation. Kerala economy is predominantly agrarian in nature 53.08 % of rural

household are depending agriculture which is lower than the national average of

66.76%. But in case of per capita income and production state is lagging behind

many other states in the Country. The Kerala Rural Employment Guarantee Scheme

(MGNREGA) was launched on 5th February 2006 in two districts, and then

extended to all the 14 districts of the states in the next two phases.

Table 3.23: Job Cards Issued in Kerala under MGNREGA

Districts Cumulated number of household got job card (in 000)

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Palakkad 208.59 231.51 240.87 163.32 222.98 253.71

Wayanad 122.96 132.15 145.59 90.64 109.86 120.18

Idukki 150.49 202.64 221.44 124.79 154.38 165.16

Kasaragod 89.46 111.48 121.57 70.58 97.42 110.82

Alappuzha 187.85 246.06 264.45 173.31 190.78 227.15

Ernakulam 112.56 175.97 195.67 132.30 147.84 182.32

Kannur 112.51 155.46 172.85 103.93 152.58 179.88

Kollam 136.92 194.51 223.39 149.95 210.85 260.65

Kottayam 76.31 132.47 159.10 120.94 133.49 160.50

Kozhikode 159.93 223.61 275.18 168.12 195.30 239.96

Malappuram 157.11 214.90 254.56 163.39 185.24 247.82

Pathanamthitta 57.51 92.09 97.78 75.10 94.31 119.72

Trivandrum 203.88 270.58 294.62 204.39 250.09 308.86

Thrissur 121.64 206.02 248.59 116.07 146.71 236.37

Total 1897.71 2599.45 2915.67 1856.81 2161.77 2813.12



Registration of households is compulsory under this after the registration

concerned local bodies will issue job card within 15 days from the date of

registration. Once a household got registered under the scheme the registration

is valid for coming five years. After observing the benefits of the scheme, the

rural households in Kerala started joining the scheme. This is because the

number of job card issued increased from 18.98 lakh in 2008-09 to 28.13 lakh in

2013-14. Trivandrum district has highest number of job card holders as 31st

March 2014.

Table 3.24: Details of Work Demanded and Provided in Kerala under MGNREA

Year Employment to households (in 000) % of Employment

provided to demanded Demanded Provided

2006-07 104.93 99.11 94.45

2007-08 259.28 185.39 71.50

2008-09 698.68 692.02 99.05

2009-10 957.48 955.98 99.84

2010-11 1186.36 1175.82 99.11

2011-12 1418.06 1416.39 99.88

2012-13 1693.89 1525.49 90.06

2013-14 1678.12 1523.19 89.19



Table 3.25 Employment Provide on Demanded under MGNREGA in Kerala

Districts % of Employment Provided for households on demanded

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Palakkad 100 100 99.66 99.96 94.15 92.95

Wayanad 99.63 100 99.18 99.89 91.04 91.11

Idukki 99.75 99.97 99.45 99.97 94.81 90.89

Kasaragod 97.25 99.97 99.48 99.98 87.94 85.56

Alappuzha 98.31 100 98.24 99.85 94.92 94.46

Ernakulam 99.64 99.04 99.69 99.94 89.14 87.57

Kannur 99.28 99.53 99.72 99.84 85.66 87.64

Kollam 94.44 99.58 96.11 99.80 87.53 84.29

Kottayam 97.85 99.68 99.32 99.84 87.94 86.70

Kozhikode 98.87 99.87 99.56 99.84 90.94 89.42

Malappuram 99.79 99.93 99.52 99.82 89.65 87.88

Pathanamthitta 97.25 99.90 99.45 99.95 85.74 88.51

Trivandrum 99.94 100 99.20 99.95 90.75 84.09

Thrissur 99.51 99.78 99.74 99.74 86.10 93.01

Total 99.05 99.84 99.11 99.88 90.06 89.19


Above tables show that implementation of very effective in Kerala, an

overview of the MGNREGA in the past 8 years reveals that the employment

opportunities have significantly gone up since the implementation of the scheme.

The quantum of employment opportunities provided to rural households has

recorded an increase of more than two times from 6.92 lakhs in 2008-09 to 14.97

lakhs in 2013-2014. When comparing the employment generation at national level

State of Kerala perform far better, during the period of 8 years from 2006-07 to

2013-14 employment demanded and provided in Kerala grew at an average rate of

37.06% and 37.97%. The all India growth of both these cases is 10.27% and 9.44%

respectively. From 2010-11 onwards none of the districts in Kerala was able to

provide employment to all the households who demanded employment.


Table 3.26: Generation of Employment in Kerala under MGNREGA

District Person Days (in lakhs)

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Palakkad 37.4 46.18 45.93 53.08 72.19 72.39

Wayanad 26.73 31.86 19.73 26.61 33.87 33.63

Idukki 16.54 45.55 57.47 56.81 75.93 56.04

Kasaragod 13.71 17.54 20.02 20.98 28.07 26.26

Alappuzha 4.7 24.74 51.48 73.56 94.38 87.65

Ernakulam 6.05 13.21 31.94 51.79 58.08 49.06

Kannur 5.29 12.07 18.31 26.38 34.68 33.76

Kollam 5.12 17.18 29.71 47.77 69.17 62.56

Kottayam 1.73 9.28 20.41 29.91 36.50 28.85

Kozhikode 6.15 21.63 37.12 43.33 54.92 54.99

Malappuram 7.45 23.1 33.33 41.37 54.35 51.63

Pathanamthitta 3.44 92.91 17.54 23.61 35.74 33.30

Trivandrum 10.36 41.54 57.13 94.26 63.12 56.12

Thrissur 9.06 22.43 40.2 42.49 125.30 148.14

Total 153.72 339.71 480.32 631.9 837.7 794.36


Table 3.27: Households Completed Guaranteed Number of Employment

District No. households completed 100 days Employment (000)

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Palakkad 5.10 6.97 7.09 8.67 22.02 25.11

Wayanad 4.08 7.12 1.89 3.11 8.61 13.78

Idukki 1.80 12.24 13.02 15.67 32.90 23.39

Kasaragod 2.33 3.42 3.28 2.93 9.24 11.94

Alappuzha 0.02 0.57 3.62 10.19 36.50 48.48

Ernakulam 0.06 0.34 4.93 16.09 24.80 22.68

Kannur 0.11 0.72 2.41 3.72 7.80 9.51

Kollam 0.08 0.83 3.48 10.28 29.46 31.1

Kottayam 0.01 0.44 1.67 4.20 8.66 7.65

Kozhikode 0.01 1.19 3.18 5.18 10.07 21.09

Malappuram 0.05 2.85 5.71 8.74 25.30 27.22

Pathanamthitta 0.02 0.88 1.31 2.86 15.03 15.33

Trivandrum 0.41 3.22 10.83 21.58 32.92 114.58

Thrissur 0.27 2.80 5.57 11.10 70.57 34.57

Total 14.34 43.60 67.97 124.32 339.87 406.42 Source: MGNREGA website


Job generation under MGNREGA in terms of person days witnessed a sharp

and study increase from 153.73 lakh in 2008-09 to 794.36 lakh in 2013-14. Persons

day created for women grew at an exceptionally higher rate than that of men,

Women caught 93.43% of total employment generated from 2008-09 to 2013-14

and it brought Kerala in the top position in case of female work participation. About

406420 households finished 100 days of employment in the year 2013-14 and in

2008-09, 14344 families, it shows an increase of 19.43 time over six year period of

full implementation. During 2008-09 on an average 22 days employment were

provided each household, which increased to 53.7 days in 2013-14.

Thiruvananthapuram District ranked first in providing guaranteed number of

employments to households.

Table 3.28: Financial Analysis MGNREGA in Kerala

Year Amount (Rs. In crore) % of

Utilisation Available Utilised

2006-07 48.4 27.90 57.7

2007-08 99.4 83.4 83.58

2008-09 297.7 224.6 75.42

2009-10 591.2 471.5 79.76

2010-11 843.3 704.3 83.52

2011-12 1045.9 1005.1 96.10

2012-13 1431.4 1415.1 98.87

2013-14 1372.1 1225.6 89.32

Total 5729.7 5157.4 83.03

Source: Compiled from MGNREGA website

One of features of MGNREGA is that it is a demand based entitlement

programme. Fund for the initial year is released on the basis of annual labor budget

prepared by each state at the beginning of the year and in the subsequent years fund

will be released on the basis demand on expenditure. Total fund available in this

scheme includes amount allotted by the Central Government, State fund and


unutilized amount of the previous year. At all India level fund made available under

the scheme increased from Rs. 12073.62 crore in 2006-07 to 42292.57 crore in

2013-14 and marked growth of 16.2%. But during the same period fund made

available for Kerala has been registered an increase of 48.65%. Fund utilized also

shows an increase of 16.26 % at national level, but in Kerala this amount of increase

is 19.89%.

3.6 MGNREGA and Kozhikode District

Kozhikode district, a district of Kerala is situated in its southwest costal

region. Kozhikode District came in to existence on 1st January 1957, headquartered

in Kozhikode with geographical area of 2345 Square km. Total number of

household in the district as per 2011 censes is 683825 and the total population of the

district is 3086293. District has 3 Taluks, 12 Blocks, 75 Gram Panchayats, 51

Villages and 55 towns as per 2011 censes. 67.15% of the total population is living in

urban area and the balance 32.85% in rural area. Sex ratio of the district is 1098

females per 1000 males. Literacy rate of the district is 95.08. Total number of work

force in the district is 948981 among this 752333 are males and 196648 are females.

Economy of the district is mainly dependent on agriculture. More than half of the

population is engaged in agriculture in order to earn their bread and butter. The

main produces of the state are Coconut, Banana, paddy, rubber, arecanut, etc. Every

year huge chunk of revenue comes from these products and helps the economy to a

great extent.

MGNREGA has been implemented in the district in 2008 during the third

phase of its expansion. By the year 2013-14 239960 job cards are issued in the

district among these 171688 are very active. Programme had vided coverage in the

district; all the 12 Blocks in the district are coming under the coverage of the Act.

69 Gram Panchayats in the district have implemented the programme in their

jurisdiction. In the district total 469052 workers are registered under the Act and

among these 197160 are the active workers of the scheme. In the total number on

registered workers 46676 are SCs, 4512 are STs and 289614 are females. By the end


of the financial year 2013-14 MGNREGA have created 5499000 person days of

work in the district. Statistics shows that MGNREGA is highly successful in the

district in case of social and financial inclusion of women, SCs and STs of the

region. It also had great positive impact on economic and social empowerment of

weaker session of the society.

Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 71

Chapter IV

IMPACT OF MGNREGS ON AGRICULTURAL

LABOUR SUPPLY OF KOZHIKODE DISTRICT

4.1 Introduction

As the unemployment rate is approaching the range of 10 per cent, burden

riding on the authorities to arrange a new and creative measure which could keep

unemployment and poverty under control. In such a circumstance, the Government

of India launched the National Rural Employment Guarantee Scheme, which is by

far the prime ever public works programme under the globe. The scheme offers

guaranteed employment for 100 days in a financial year to one member of eligible

household. The Act was enacted in February 2006, was renamed as Mahatma

Gandhi National Rural Employment Guarantee Act (MGNREGA) on 2nd October

2009. After nine years of its execution, the Mahatma Gandhi National Rural

Employment Guarantee Scheme (MGNREGS) is viewed as a ‘blessing to the poor’

as it has convened numerous aids, especially to the rural people. A rural household

can make use of its manpower to yield a yearly revenue of say Rs.20,000/-.

The system has improved the societal position of both male and female

members from the weaker communities, including the SCs and STs. The scheme has

formed valuable assets and basic utilities in the rural areas. Nevertheless,

notwithstanding this achievement, the scheme is facing blame from various angles.

One among the foremost disparagements is that it has harmfully disturbed the

availability of labourers in the agricultural sector and has increased their wages. It has

is also accused that the labourers desires to work in MGNREGS over other labour, due

to its fewer sweat, lesser administration and is providing additional amenities.

In such a scenario, in this chapter, the researcher tries to examine the impact

of the employment guarantee scheme MGNREGS on agricultural labour supply of

Kozhikode District.


4.2 Data Analysis

4.2.1 Age Analysis of the respondents

Table 4.1: Age Group of Respondents

Sl. No. Age Group No. of respondents Percentage to total

1 < 30 38 10

2 30 - 40 116 30

3 40 - 50 137 36

4 50 - 60 62 16

5 > 60 31 8

Total 384 100

Source: Survey data

Figure 4.1: Age wise Classification of the Respondents of the Scheme

38

116

137

62

31

Below 30 years

30 - 40 years

40 - 50 years

50 - 60 years

Above 60 years

Above table reveals that 66% of the respondents are between 30 and 50

years of age. Only 10% and 24% of respondents are from below 30 years and above

50 years age category respectively.


4.2.2 Gender wise age analysis of the respondents

Table 4.2 Gender Wise Classification of Respondents and their Age Group

Sl. No. Gender Age Group No. of respondents Percentage to total

1 Male

< 30 1 3.70

30 – 40 3 11.11

40 – 50 4 14.81

50 – 60 7 25.93

Above 60 12 44.44

Total 27 100

2 Female

< 30 37 10.36

30 – 40 113 31.65

40 – 50 133 37.25

50 – 60 55 15.41

Above 60 19 5.32

Total 357 100

Source: Survey data

Figure 4.2: Gender wise Age Classification of Respondents of the Scheme

0

20

40

60

80

100

120

140

Below 30 Years 30 - 40 Years 40 - 50 Years 50 - 60 Years Above 60 Years

Male

Female

The above table depicts that about 93% of the respondents are women, which

clearly reveals the women domination in the participation of the scheme and social

inclusion of women, which is higher than the state average of 81%. The analysis also

shows that majority of the male workers enrolled to the scheme are in the age group

above 50 years which displays the disregard of the younger and middle aged male

population to choose this scheme due to lower wage rate than the market wage rate.


4.2.3 Religion and Cast analysis of the respondents

Table 4.3: Religion wise Classification

of the Respondents

Table 4.4: Caste wise Classification

of the Respondents

Sl. No.

Religion No. of

respondents Percentage

Sl. No.

Cast No. of

respondents Percentage

1 Hindu 229 60

1 Upper Cast

68 18

2 Muslim 127 33 2 OBC 230 60

3 Christian 23 6 3 SC 71 18

4 Others 5 1 4 ST 12 3

Total 384 100 5 Others 3 1

Source: Survey data Total 384 100 Source: Survey data

From the above table, it is clear that almost 60% of the respondents are from

Hindu community, Muslims and Christians have participation to the extent of 33%

and 6% respectively, which reveals the participation of people from every religion

in the scheme. Likewise, the participation from the OBC community is the highest

at 61%, whereas the SC / ST together trail with 21% participation. This all shows

that, the scheme is accepted by all the religions and casts in our society, especially

the weaker sessions.

4.2.4 Educational qualifications of respondents

Table 4.5: Educational Qualification of Respondents

Sl. No. Education Level No. of Respondents Percentage

1 Illiterate 4 1

2 Primary Level 68 18

3 Secondary Level 157 41

4 Higher secondary Level 108 28

5 Graduation 38 10

6 Above graduation 9 2

Total 384 100

Source: Survey data


Figure 4.3: Education Status of Respondents

Education level of the respondents shows that 4 of the respondents never

went for schooling and 18% of the participants completed only primary level

education. 41 % of the respondents have completed or qualified SSLC examination

and 108 of the total participants are qualified higher secondary or pre-university.

Another interesting fact is that 10 % of the sample population is university

graduates and 2 % possess qualification above Graduation like B.Ed, Computer

Diploma etc.

4.2.5 Marital status of the respondents

Table 4.6: Marital Status

Sl. No. Status No. of Respondents Percentage

1 Married 331 87

2 Unmarried 26 6

3 Widowed 27 7

Total 384 100

87 % of the participants of the sample population are married and leading a

family life and another 7% percentage are married but is now widowed. A minor

portion (6%) of the respondents is unmarried.


4.2.6 Year of enrollment to MGNR EGS

Table 4.7: Year of Enrollment in MGNREGS

Sl. No.

Year of Enrollment No. of Respondents Percentage

1 2008-09 88 23

2 2009-10 115 30

3 2010-11 71 18

4 2011-12 11 3

5 2012-13 59 15

6 2013-14 40 10

Total 384 100

Figure 4.4: Annual Enrolments to the Scheme

0

20

40

60

80

100

120

140

2008 - 09 2009 -10 2010 - 11 2011 - 12 2012 - 13 2013 -14

Series 1

Majority of the respondents were enrolled into the scheme during the initial

stage of the scheme. Survey data reveals that 71% of the respondents enrolled into

the scheme between the years 2008 and 2011. Then the rate of enrollment started

declining. Comparing the rate of enrollment and age group of the respondents, it can

be concluded that the scheme has lost its charm and attraction among the

youngsters. Registration to the scheme is valid for five years after which the

respondents should apply for re-registration. Most of the respondents opined that the


scheme was less attractive during the years between 2010 and 2012 due to delayed

payment of wages and shortage of guaranteed work days; majority of the

respondents left the scheme during this term due to the above reasons and got

reregistered at a later stage.

4.2.7 Occupation of the respondents before enrolling into MGNREGA

Table 4.8: Occupation wise Classification of the Respondents

Sl. No. Occupation No. of respondents Percentage

1 Agricultural Labour 103 26

2 Homemaker 168 43

3 Farming 34 8

4 Private employment 22 6

5 Self-employed 18 5

6 Construction 14 4

7 Others 17 5

8 Unemployed 8 3

Total 384 100

Source: Survey data

Figure 4.5: Occupation wise classification of the respondents

103

168

34

22

18

1417 8

Agricultural Labour

Homemaker

Farming

Private - employment

Self-employed

Construction Labour

Others

Unemployed


The above table shows the occupation status of the respondents before

enrolling to MGNREGS. Among the respondents, 43% were homemakers, which

make this category the prime element of the respondent population. Since the

percentage of homemakers is very large, it is the proof of financial and social

inclusion of women happened after the introduction of the scheme MGNREGS. It is

one among the prominent impacts of the Act, Mahatma Gandhi National Rural

Employment Guarantee Act. 26% of the respondents were employed in agricultural

sector and 3% of the sample population was unemployed before the introduction of

the scheme MGNREGS.

4.2.8 Source of worker’s income other than MGNREGA

Table 4.9: Source of Income other than MGNREGA

Source: Survey data

MGNREGA guarantees 100 days of employment in a year, but secondary

data reveals that after the introduction of the scheme in Kozhikode District in 2008

very few of the local bodies were successful in providing 100 days of work to the

workers. Before enrolling to this scheme about 57% of the respondents were

depending on other sources of income to have their bread and butter. Since the

MGNREGA wages are not enough to meet their livelihood expenses they are

depending on the same old sources of income for earning when the scheme is not

Sl. No. Source No. of Respondents Percentage

1 Agricultural labour 89 23

2 Farming 43 11

3 Private employment 18 5

4 Self-employed 16 4

5 Construction 29 8

6 Others 36 9

7 No. other source 153 40

Total 384 100


active. Survey data shows that 40% of the respondents do not have any sources of

income other than MGRNRES and most of them are house wives.

4.2.9 Annual family income of the respondents

Table 4.10: Annual Family Incomes of the Respondents

Sl. No. Income (Rs.) No. of Respondents

1 Upto Rs.25000 37

2 25000 to 50000 134

3 50000 to 75000 172

4 75000 to 100000 28

5 Above 100000 13

Total 384

Figure 4.6: Family Income of Respondents

0

20

40

60

80

100

120

140

160

180

200

Table 4.11: Worker’s Contribution to Total Family Income

Sl. No. Worker’s contribution to total family income No. of respondents

1 Upto 25% 29

2 25 – 50% 173

3 50 – 75% 161

4 More than 75% 21

Total 384


Annual family income of the respondents shows that most of them belong to

marginalized class of the society and annual family income of the majority of the

respondents is below Rs.100000. This is not enough to keep a minimum standard of

living when the cost of living is increasing day by day. Analyzing the contribution

of MGNREGA workers towards their annual family income, it seen that most of

them are contributing a considerable portion to their total family income. In certain

cases MGNREGS is the only source income of the family.

4.2.10 Contribution of MGNREGS wage to individual income of respondents

Table 4.12: Contribution of MGNREGA Wage to Individual Income

Sl. No. % of Contribution No. of respondents Percentage

1 Up to 25 49 13

2 25 – 50 69 17

3 50 – 75 98 26

4 75 – 100 168 44

Total 384 100

Source: Survey data

Some of the respondents are working and earning from other sources

during the work holidays of MGNREGS. But the major constituent of their

individual income is MGNREGS Wages. 44% of the respondents earn 75% to

100% of their individual income from the scheme. It shows that Scheme is the

only source of their income and they do not prefer any other job when the scheme

is not active. Survey data reveals that workers who earn major part of their income

from the scheme are house wives and those who earn from source other than

MGNRERGS mostly are agricultural labourers. A few of the respondents are

working at construction sites and some others do farming when the scheme works

are not available.


4.2.11 Market wage rate analysis

Table 4.13: Average Market Rural Agricultural Sector Wages in Kozhikode

District

Sl. No.

Year Market Wage

% Increase over previous

year

Sl. No.

Year Market Wage

% Increase over previous

year

Before introducing MGNREGA After introducing MGNREGA

1 2001-02 170 - 8 2008-09 260 -5.45

2 2002-03 195 14.71 9 2009-10 290 11.54

3 2003-04 205 5.13 10 2010-11 345 18.97

4 2004-05 218 6.34 11 2011-12 375 8.70

5 2005-06 235 7.80 12 2012-13 390 4

6 2006-07 255 8.51 13 2013-14 425 8.97

7 2007-08 275 7.84

Source: Department of agriculture Govt. of Kerala

Figure 4.7:

Market rural agricultural

sector average wage rate in Kozhikode

District before introduction of the scheme

Figure 4.8:

Market rural agricultural

sector average wage rate in Kozhikode

District after introduction of the scheme

170195 205 218 235 255 275

-50

50

150

250

350

450

2001 - 02

2002 - 03

2003 - 04

2004 - 05

2005 - 06

2006 - 07

2007 - 08

260290

345375 390

425

0

100

200

300

400

500

2008 - 09

2009 - 10

2010 - 11

2011 - 12

2012 - 13

2013 - 14

Unpaired t test result

P Value and Statistical Significance: The two-tailed P value equals .8706. By

Conventional criteria, this difference is considered to be no statistically significance.

Hence the Hypotheses MGNREGA has caused for increase in market wage rate has

been rejected.


Intermediate values used in calculation:

t = 0.1672

df = 10

Standard error of difference=3.589

It can be concluded that the introduction of the MGNREGS has not been a

reason for the wage hike in agricultural sector. In many studies conducted inside

and outside the state of Kerala concluded that MGNREGA has caused for the

increase in agricultural sector wages. But in the case of Kozhikode district, due to

the influence of NRI remittance market wage rate was always higher than the

MGNREGA wage.

4.2.12 Relationship between increase in MGNREGA wage and increase in

rural average agriculture sector wage

Table 4.14: Comparison of % Increase in MGNREGA Wages and % Increase

in Rural Agricultural Wages

Year MGNREGA

wages

% of increase over previous

year

Avg. rural agriculture

wages

% of increase over previous

year

2007-08 125 - 275 -

2008-09 125 0 260 -5.45

2009-10 136 9 290 11.54

2010-11 150 10 345 18.97

2011-12 164 9 375 8.70

2012-13 180 10 390 4.00

2013-14 212 18 425 8.97

Source : MGNREGA Website and Department of Agriculture Govt. of Kerala


Figure 4.9: Comparison between increase in MGNREGA Wages and Rural Agriculture

Wages

125 125 136 150164

180212

275260

290

345375

390

425

0

50

100

150

200

250

300

350

400

450

2007 -08

2008 -09

2009 -10

2010 -11

2011 -12

2012 -13

2013 -14

MGNREGA Wages

Rural Agriculture Wages

Correlation coefficient between two series are 0.59, it reveals that both series

are positively correlated but not fully positively correlated. Hence the hypothesis

‘there is significant relationship between increase in wage rate of agriculture labour

and increase in wage rate of MGNREGA is rejected. Correlation coefficient tool

have positive value since both the wages has increased overtime.

4.2.13 Preference of Agricultural labour over MGNREGA

Table 4.15: Willingness to Accept Agricultural Employment, when MGNREGA

Scheme is Not Active

Sl. No. Willingness No. of respondents Percentage

1 Yes 243 63

2 No 116 30

3 No opinion 25 7

Total 384 100

Source: Survey data

63% of the sample population responds that they are willing to accept

agricultural sector employment during the work holidays of MGNREGA scheme

and 30% of them opined that they are not willing to engage in agricultural sector


when the scheme is not active. 25 persons from the sample population have no

opinion on this query.

Table 4.16: Preference of Agricultural Sector Job Over MGNREGA

Sl. No. Preference No. of Respondent Percentage

1 Prefer agriculture job 159 66

2 Prefer MGNREGA 76 31

3 No opinion 8 3

Total 243 100

Source: Survey data

Researcher asked the preference of workers on agricultural job over

MGNREGA when both opportunities are available at a time. This question was

asked only to those employees who are willing to work in agricultural field when

MGNREGA scheme is no active. Responses reveals that most of them prefer to

work in agricultural field and only 31% of the respondents are only sticking on to

MGNREGA.

Table 4.17: Reasons for Preferring Agricultural Job Over MGNREGA

Sl. No.

Statements

Level of Agreement

Strongly Agree

Agree Disagree

1 MGNREGA wages is less than agriculture labour

117 40 2

2 Working time is less in case of agricultural labour

89 58 12

3 Effort in agricultural job is high 127 26 6

4 Payment of MGNREGA wages are delayed 147 12 -

5 Agriculture sector offer more work days in a year

143 16 -

6 Repeated nature of agriculture job helps to improve efficiency

114 36 9

7 MGNREGA works can be arranged during off season

76 43 40

Source: Survey data


Out of the sample population of 384 workers 103 workers were working in

agricultural sector before enrolling to MGNREGA and only 89 of them are engaged in

agricultural job during the work holidays of MGNREGS. 243 of the sample population

are willing to accept agricultural job when the scheme is not active and out of this 243

workers 66% prefer agricultural job over MGNREGA. Reasons of preferential

treatment are high wage rate, prompt payment, less working time and the help from

officials to arrange the MGNREGA work during the off days of agriculture.

Results of the above analysis shows that in case of Kozhikode district

MGNREGA workers who were employed in agriculture field earlier and who prefer

to work in this sector consider agriculture sector as prime provider of employment;

and they prefer agriculture over MGNREGA. Hence MGNREGS has not created

any negative impact on the agricultural sector labour supply of Kozhikode District

and it has not caused any shortage for labour supply in agriculture sector.

4.2.14 Social inclusion of MGNREGA workers

Table 4.18: Social Inclusion Status of Workers after Enrolling to MGNREGA

Variable

Weighted score of response category Total weighted

score

Mean Score Greatly

improved Fairly

improved No

improvement

Ability to handle stress 627 292 29 948 2.47

Attendance in meetings 741 226 24 991 2.58

Decision making capacity

597 276 47 920 2.40

Public speaking capacity

708 212 42 962 2.51

Ability to express opinions

789 174 34 560 1.46

Ability to mentor people

93 228 239 827 2.15

Documentation capacity 591 184 95 870 2.27

Political involvement 657 254 38 949 2.47


Variable


score

Mean Score Greatly

improved Fairly

improved No

improvement

Gram Sabha participation

906 58 53 1017 2.65

Care in children education

789 184 29 1002 2.61

Mobility freedom 339 144 199 682 1.78

Enrollment in continuing education

237 56 277 570 1.48

Participation in SHGs 708 214 41 963 2.51

Group cohesiveness 747 172 49 963 2.51

Self confidence 906 126 19 1.51 2.74

Total 34.58

Source: Survey data

Social inclusion index = Mean score / Number of variables

= 34.58/15=2.31

From the above statistical analysis, it is detected that for all the variables

have a mean score of 2.31 or values nearer to it, MGNREGA workers especially

women have attained social empowerment. Considering certain variables like

improvement in self-confidence group cohesiveness, attendance in meetings,

attendance in Grama Sabha and participation in SHGs women have improved

significantly after their enrollment in MGNREGA. But in cases like freedom of

mobility, ability of mentoring and enrollment in continuing education, a minor

improvement has been noted. Since mean score of most of the variables lie near the

social empowerment index, so the hypothesis “MGNREGA has certain role in social

inclusion of its workers” has been accepted and came to a conclusion that

MGNREGA has become a medium for the social inclusion of the workers especially

rural women.


4.2.15 Economic empowerment of MGNREGA workers

Table 4.19: Economic Empowerment Status of Workers after Registering

Under MGNREGA

Variable


score

Mean Score Greatly

improved Fairly

improved No

improvement

Total family income 861 98 48 1007 2.62

Standard of living 348 302 117 767 2.00

Personal income 924 98 27 1049 2.73

Contribution to family income

849 166 18 1033 2.69

Spending pattern 666 222 51 939 2.45

Fashion conscious 267 330 130 727 1.89

Dependence to micro finance

789 194 24 1007 2.62

Saving through SHGs 873 176 5 1054 2.74

Thinking on self-employment

708 214 41 963 2.51

Self-shopping 276 326 129 731 1.90

Investment in home appliances

741 222 26 989 2.58

Consumption pattern 639 214 64 917 2.39

Self-reliance 714 206 43 963 2.51

Book keeping skills 288 156 210 654 1.70

Quality consciousness 558 294 51 903 2.35

Total 35.68

Source: Survey data

Index of Economic Empowerment = Total mean score / number of variables

= 35.68/ 15

= 2.38

As per the above analysis in cases of variables having a mean score of 2.38

or a values nearer to it, the enrolled workers especially women members are found

to be economically empowered. In case of majority of the variables identified by the

researcher as the factors influencing economic empowerment mean scores are equal

or neared to the index. Workers are hardly improved in the case of variables like


book keeping skills, self-shopping and fashion consciousness. Since mean score of

majority of the identified variables are nearer to the index, the hypothesis

“MGNREGS has certain role in economic empowerment of workers” is accepted

and concluded that scheme has certain positive impact on the economic

empowerment of rural people especially the weaker session.

4.2.16 MGNREGA and financial inclusion of rural women

Table 4.20: Financial Inclusion Status of Women Workers After Registering

under MGNREGA

Variable

Weighted score of response category Total

weighted score

Mean Score Strongly

agree Agree Disagree

Opened bank account 879 118 5 1002 2.81

Started regular banking habit 741 176 22 939 2.45

Familiar with bank documents 375 264 100 739 1.92

Started savings 579 254 37 870 2.27

Holding debit card 588 236 43 867 2.26

Started to borrow from bank 249 184 182 615 1.60

Started to invest in SHGs 657 224 26 907 2.36

Started to avail micro credit 558 286 28 872 2.27

Stressing to prompt repayment of loan

489 224 82 795 2.07

Started own spending 489 252 68 809 2.11

Attained expertise in fund management

309 136 186 631 1.64

Held insurance policy 354 138 170 662 1.72

Started buying on installment scheme

648 190 46 84 2.30

Joined in indigenous chitty 807 134 21 962 2.51

Got role in family finance decision 597 196 60 853 2.22

Total 32.51

Source: Survey data


Financial Inclusion index = Total mean score / Number of variables

= 32.51/15

= 2.17

Financial inclusion means availability of useful and affordable financial

products and services that meet the needs of individuals and delivered in a

responsible and sustainable way. From the above analysis it is observed that, for all

variables with mean score of 2.17 or a value nearer to it, women workers of

MGNREGA attained financial inclusion. In case some variables like holding

insurance policy, bank borrowings etc. mean scores have a lesser value, so in these

cases there is a need of improvement. Mean score of all most all variables attained a

value equal to or nearer to the index; hence the hypothesis “MGNREGA has

resulted in financial inclusion of rural women” has been accepted.

4.2.17 Problems faced by MGNREGS workers

Table 4.21: Problems of MGNREGS Identified by the Workers

Particulars

Level of agreement

Total Strongly Agree

Agree Disagree

MGNREGA wage rate is very low 297 69 18 384

Payment of wage is delayed always 309 66 9 384

Always not getting guaranteed work days 156 163 65 384

Increase in wage rate will help to reduce migration cities for job

247 83 54 384

Asset created are not long lasting 195 98 91 384

Procedural delays are there 319 48 17 384

Clash between agriculture season and MGNREGS work exist

136 63 185 384

Political influence affect the effectiveness of work 176 87 121 384

Lacking support from Govt. officials 117 157 110 384

Supervision is very poor 18 27 339 384

There are delay in issue of job cards 208 117 59 384

Lacking expertise to perform all the jobs 307 52 25 384

Facing shortage of tools 263 78 43 384

Work hours are very lengthy 136 147 101 384

Work allotted per worker is always less 99 171 114 384

Source: Survey data


According to the workers of MGNREGA the scheme has its own merits and

limitations. Researcher asked the workers to produce their level of agreement on

various issued identified the researcher through observation of MGNREGS activity.

Most of the workers in the sample population opined that Wage rate of the scheme

is very low and it should be increased to the market wage prevailing in each locality.

Regarding the guaranteed days of employment, around 80%of the sample

population expressed that they are not getting guaranteed 100 days of employment

in a financial year. Central Government introduced the program as a flagship

programme to eradicate poverty and unemployment, but as per the opinion of

workers procedural delays are always exist in issue of job card, work allotment and

wage payment.

Majority of the respondents said that they are lacking expertise to perform

all the scheduled works of the scheme and the scheme has no provision to give

training to participants. A major portion of the sample population are working in

farming sector when MGNREGA works are not available and they in the opinion

that sometimes works under the scheme are scheduled during the period of farming

and harvesting. This may badly influence on the annual family income and

livelihood expenses of MGNREGS workers. About 75% of the respondents

observed that ruling political parties in the local bodies have certain role in

scheduling the working and allotment of work and they also opined that the most of

the time it reduce the transparency of the scheme.


4.2.18 Improvements in MGNREGA expected by the workers

Table 4.22: Workers Expectation on MGNREGA

Particulars

Level of agreement

Total Strongly Agree

Agree Disagree

Wage rate should be increased to market rate 349 17 18 384

There should be system for monthly payment 298 49 37 384

At least 200 days work should be provided 198 96 90 384

Work hour should be reduced and should make working time more productive

107 114 163 384

Cooperative farming should be entertained 247 102 35 384

Govt. Should ensure the smooth conduct of the scheme.

364 20 0 384

Non farming related works should be scheduled during off season

116 129 139 384

Provisions should be included in the Act to get full support from Govt. Officials

302 46 36 384

Political interference could be reduced 154 129 101 384

Qualified supervisors should be appointed 35 27 322 384

Work may be allotted according to the expertise of workers

263 96 25 384

On the job or off the job training may be provided

117 108 159 384

Fund should be allocated to purchase tools 323 46 15 384

Work allotment should be based on the work load assessment

96 172 96 384

Should increase the effectiveness of social audit system

95 103 186 384

Source: Survey Data

MGNREGA workers have their own suggestions to improve functioning of

the scheme and most of them are recommending certain things from their

experience with the Act during the last couple of years. They have a uniform


opinion on the increase in the wage rate of the scheme. Current rate of wage is not

enough to meet the increasing livelihood expenses and it is far below the market

wage rate prevailing in Kozhikode district. They also suggest to having a system

that ensure monthly payment of wages. According to the respondents works

allocated under the scheme are sometimes not suited to their expertise or efficiency,

so most of them are very positive in allocating work according to efficiency of

workers.

Nature of work under the scheme is entirely different from one to another

and different tools are required to perform different jobs. At present there is no

provision of fund to purchases tool under MGNREGS; an annual provision may be

provided to workers for buying tools for their work. Another opinion of the sample

population is that length of working time can be reduced and the measures should be

taken to improve the effectiveness actual working hours. Around 40 % of the

sample population is actively engaged in faming activity and they have an opinion

that sometime works under the scheme are scheduling during the peak season of

farming and it will lead to decline in their work days and income. This issue can be

solved by scheduling nonagricultural related MGNREGA works during the

offseason of agriculture.

4.3 Conclusion

The analysis reveals that introduction of the programme MGNREGA has

created a great socio economic impact in Kozhikode District. When the scheme was

introduced for the first time in Kerala in Wayanad and Plalakkad districts, both the

districts were facing severe crisis in the agricultural sector. Suddenly, after the

introduction of the scheme, workers shifted from agriculture to MGNREGA and this

has caused for reduction in agricultural sector labour supply in these two Districts.

But the situation of Kozhikode district is entirely different, average rural agriculture

wage rate in the district is always higher than MGNREGS wages and most of the

time it is almost double. Higher market wages has caused for the reverse movement


of workers who left agriculture in initial years of MGNRGA, especially in the case

of male employees.

Another remarkable feature of MGNREGA in Kozhikode district is that

around 45 % of the registered workers are house wives and they are not willing to

work anywhere other than MGNREGS. Only 40 to 50 % of the registered workers

are actively participating in farming activities in the district and they still prefer to

work in the same sector even when the MGNREGA works are viable. Hence, it can

be substantiated that MGNREGS does not create any negative impact on

agricultural sector labour supply of Kozhikode district or does not hold much of the

potential agricultural labourers.

Finding, Policy Recommendation and Conclusion 94

Chapter V

FINDING, POLICY RECOMMENDATION

AND CONCLUSION

5.1 Introduction

This study has explored the impact of Mahatma Gandhi National Rural

Employment Guarantee Act on Agricultural labour supply of Kozhikode District in

Kerala. Study is purely based on the primary data collected from the region. A minor

portion of secondary data is also used for the comparison purpose. Study reveals that

MGNREGS does not hold any portion of the agricultural laborers or potential

agricultural sector labourers. Another interesting fact of the study is that MGNREGA

does not have any role in the hike of agricultural sector wage rate. But the Scheme has

been found very effective in eradicating rural poverty and unemployment. Moreover

MGNREGA has become a medium for the social and economic empowerment of rural

mass especially women and other marginalized community like SC/ST. Major findings

and policy recommendations based on the finding are outlined below for the effective

implementation of the scheme MGNREGS.

5.2 Findings

During the initial years of the implementation of the MGNREGA, rate of

enrolment was very high but this rate has diminished gradually. This reveals that

the scheme is not much attractive among the younger generation; moreover they

are highly qualified and skilled to perform jobs offering high quality of work

life. Age of enrolled workers is also pointing to the same fact; being the sample

population’s age below 30 occupies a minor portion.

In Kozhikode district rate of registration of male workers are much below the

national average and most of the registered male members are not active in the

scheme. A greater portion of the active male members belong to the age group

between 60 and 70. It shows that only those who have retired from their active


work life are participating in the scheme. Rural wage rate in the district is

always higher than the MGNREGA wage, so the male workers prefer to work in

other opportunities or they are migrating to cities for better livelihood.

Ratio of various religion and Casts in the sample population shows that in

Kozhikode District there is an equitable distribution of MGNREGA activity

among different religion and casts including SCs and STs. Moreover it reveals

the acceptance of the scheme among various communities in the district.

About 45% of the enrolled workers were very active in agricultural employment

before implementing the scheme and they are still working in the same sector

during the work holidays of the scheme. Some of them prefer agriculture job

over MGNREGA even when the scheme is active.

Another interesting fact of MGNREGA in Kozhikode district is that about 43%

of the sample population is house wives and most of them are not willing to

accept any opportunities other than MGNREGA. Because they are attracted to

MGNREGA since it is a Government initiative and they are expecting benefits

like pension, insurance etc. from the scheme.

Annual family income of the respondents reveals that majority of the workers

are from the marginalized wing of the society and struggling to meet their

livelihood expenses. For a portion of the sample population MGNREGS wage is

the only source of their annual income and some of them are earning from other

sources of income. MGNREGA wages occupies a significant portion in the total

annual family income of the respondents and also have a larger share in the

individual income of the respondents. Hence, all these facts evidenced that

MGNREGA has created a great impact on the livelihood improvement of Indian

rural population.

Kozhikode District is a developed district among the 14 districts of Kerala and

the major source of the income of the district is NRI remittance, especially form

gulf countries. Wage rate in agriculture and other sectors in the district are

always higher than the state and national average. Comparing the hike in wage


rates before and after the implementation of MGNREGA, it is very clear that

MGNREGA does not hold any role in the hike in rural agricultural wage rates in

the district. It is also very clear that increase in MGNREGA wages and increase

in market wages do not have any significant relationship.

About 60 % of the sample population is willing to work in the agriculture sector,

but they prefer a viable environment for work and not willing to travel more for

employment. Some of them prefer agricultural sector job over MGNREGA and

have specific reasons for that like; high wage rate in agriculture, less working

time, prompt payment of wages, it provides more number of work days and they

have an opinion that MGNREGA scheme can be opt during offseason. All these

facts show that MGNREGA has not caused for shortage in agricultural sector

labour supply of Kozhikode district. Instead, scheme provides indirect support to

agricultural sector by ensuring water supply, reducing soil erosion and creates

rural assets.

“Social inclusion is the process of refining the terms on which individual and

groups take part in the society- enhancing the ability, chance, and pride of those

disadvantaged on the basis of their identity”. Survey data shows that majority of

the participants of the scheme MGNREGS are from sidelined portion of the

society and implementation of the scheme and the financial benefit provided by

the scheme have resulted in bringing them form their own cage. There has been

a remarkable improvement in the societal participation of the MGNREGA

workers especially in case women and SCs and STs. So it has become a medium

for the social inclusion of weaker sessions of the society.

“Economic empowerment is the ability of people to take part in, contribute to

and benefit from growth process in ways that recognise the value of their

earnings, respect their poise and make it possible to negotiate an equitable

dispersal of the sweets of growth”. While making a detailed analysis of the

economic implications of MGNREGA it is very clear that its impact is very

strong and long lasting. In the sample population only 55 % have source other


than MGNREGA and the 45% of them are earning from the scheme. In case of

certain families MGNREGS is the only source of their income. Considering the

factors which lead to economic empowerment, it is very clear that there has been

a remarkable improvement in all these factors after the introduction of the

scheme. So it can be concluded that MGNREGA is very successful in

channelizing our rural society to economic empowerment.

Another achievement of MGNREGA is that it has a reasonable role in the

process of financial inclusion of rural mass, especially rural women. Most of the

participants of sample population have opened their bank account after enrolling

to this scheme since it is compulsory to have an account to transfer MGNREGA

wages. Gradually they started regular banking habit to withdraw money and

deposit their savings. As they have regular source of income, started

approaching micro credits to meet their urgent needs.

MGNREGA has created a boom in Indian rural economy, but still hold certain

limitation in both implementation and operation. Most of the time concerned

local bodies are not providing guaranteed number of work days and some

procedural delays also exist like delay in issue of job card, delay in assignment

of work etc. All the participants of the Sample population opined that there is a

frequent delay in transferring of wages. Even though the scheme is providing

opportunity for unskilled manual work, a major portion of the workers do not

possess minimum expertise to perform the assigned task. While comparing

MGNREGA wages with rural average market wage rate, rural agricultural

wages are almost double of the scheme wage.

5.3 Policy Recommendations

MGNREGA scheme can be modified to accommodate youngsters and skilled

labourers. Scope of Work under the scheme should be widened and works

preferred by educated people who expect white or blue collar job may be

included in the scheme.


Enrollment rate of male members is very less and those who have already got

registered under the scheme are not active also. Difference in the wages of

MGNREGA and market wages is the main reason behind this situation.

Authorities should take necessary steps to increase the wages according to the

hike in the market wages and increase in the cost living.

Most of the time, the scheme provides works which require lesser efficiency and

expertise, so people think that scheme is a place to handle riskless jobs and to

take frequent rests. So the structure of the job must be changed and should be a

mix of risky and riskless assignments.

MGNREGA guarantees 100 days of employment in a financial year, but the

survey data reveals that most of time workers are not getting the guaranteed 100

days of employment. Moreover wages of 100 days of employment is not enough

to meet the increasing cost of living for a family dependent to this scheme. So

the scheme should be revised in such a manner that each worker in the scheme is

getting an average 200 days of employment in a year.

Most of the members of the sample population opined that issue of job cards is

always delayed and procedural delays are happening in the case of work

assignment and allocation. So the instructions should be given to officials to

strictly follow the provisions of the Act.

Co-operative farming can be practiced to get maximum support from

MGNREGA to agriculture sector. Co-operative farming has two side impacts;

expenditure of the scheme can be reduced to minimum by allocating

MGNREGA workers to farmers and farmers should remit he wages to the

concerned local body. This will help the farmers in reducing their cost of

cultivation because they need to pay only the wages recommended in the act and

the farmers can ensure the required number of labourers also. Other benefits of

cooperative farming are the availability of maximum work days in a year,

increase in agricultural productivity and prompt payment of wages to workers.


Delay in the transfer of wage is the main reason which reduces the attraction of

the scheme. This anomaly should be corrected to gain the attraction of the

crowd. Most of the workers and their families are dependent to the income from

this scheme, so the unexpected delay may create more issues in their families.

A considerable portion of the sample population are depending both agriculture

and MGNREGA for earning their bread and butter. They have a suggestion to

schedule the non-agriculture related work under MGNREGA during the off

season of farming. Otherwise they may loss the work in agriculture field which

provides higher wages.

MGNREGA offers unskilled manual work to rural labour force and scheme

offers available works to those who need employment. But all the work requires

a minimum level of expertise, so training programmes may be arranged under

the scheme to give basic level of training to the workers. This will improve the

effectiveness of the work. In future work can also be scheduled according to the

experience and expertise of workers.

Works under the scheme requires different tools because nature of the work is

always different and not repetitive in nature. But the scheme does not provide

any provision for the purchase of tools. So there should be an annual provision

under MGNREGA for purchase and maintenance of tools.

MGNREGA scheme has been implemented under the control and supervision of

Local Self Governments and some participants are concerned about the

interference of political parties in the scheme, where they are doing favors to the

supporters of their political ideology. So the scheme should be made fully free

from the political influence and authorities should ensure the transparency of the

Act.

Few of the sample population revealed that work allocation under the scheme is

not based on the work load assessment and this will lead to wastage of labour

hours. Scientific allotment of work should be done so as to increase the


efficiency and effectiveness of the work. Length of a work day under the

scheme is 8 hours including the break time. Workers have an opinion that the 8

hours of work is not utilized effectively by the members anyway, so the length

of working time can be reduced to 6 hours and proper measures should be taken

to utilize them effectively.

5.4 Conclusion

The study is carried out to know the impact of MGNREGA on the

agricultural sector labour supply of Kozhikode District. Many studies of same kind

have conducted in various places in India and there are some studies conducted in

Kerala also in the related area. Results of the studies conducted in various states of

India reveals that MGNREGA has caused for the shift of workers from agricultural

sector to other sectors. But in the case of Kozhikode District situation is entirely

different, market wage rate in the district is very high and it is always very higher

than the national average. Because of this workers prefer agricultural sector labour

over MGNREGA and they have a chance to schedule their work under MGNRGA

during the offseason of farming.

In case of most of the states in India, MGNREGS has caused for the increase

in agricultural wage rate and led to hike in cost of cultivation. Shortage of labour

and sudden increase in the wages put the farmers in pressure and in the initial years

of MGNREGA this situation has resulted in the decrease in agricultural production

of the country. Average rural market wages of agricultural sector in the Kozhikode

district is very high compared with the national and state average. Comparing the

rate of increase in wages before and after the implementation of MGNREGA, it is

very clear that the rate of increase is almost stable and MGNREGA does not hold

any role in wage hike in the district. Moreover the rate of hike in wages is not

directly related to the increase in the wages under MGNREGA.

MGNREGA has greater impact on the lives of marginalized sections of our

society, especially in the lifestyle of women. It has influenced the societal life of the


workers and led to the social inclusion of women and SCs/STs. Cost of living has

been increasing day by day and it has created difficulties in managing all the

household expenses from a single source of income. Introduction of MGNREGA

gives opportunities to women for earning a fixed amount of income in a financial

year and resulted in the increase in their annual family income. So this scheme is

helpful in leading a better livelihood among rural families. Workers under the

scheme need to open a bank account for transferring their wages; this has forced

them to hold a bank account which made them gradually start regular banking habit.

This has resulted in the financial inclusion of this weaker session of the society.

5.5 Contribution of the Study

People are thinking that MGNREGA has caused for the shortage of labour in

the agriculture sector and there is a common thinking that introduction of the

scheme has resulted in the increase in wages too. So there was an urgent need for

making a scientific study to know the fact behind this common understanding. This

study reveals that both the criticisms were wrong and the things are very positive in

case of agriculture field. The study reveals that the scheme has great influence on

social and economic life of the participants and this has caused for the social and

economic empowerment of the workers under the scheme.

5.6 Scope of Further Research

1. A study can be conducted to recommend certain amendments to the Act to solve

issues with operation and functioning of MGNREGA.

2. A study can be conducted to assess the social and economic impact of

MGNREGA among SCs and STs.

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Appendix-I

AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT

Questionnaire for MGNREGA Members

Name Panchayat Ward

Part – I

PERSONAL PROFILE

1. Age

2. Gender Male Female

3. Religion Hindu Muslim Christian

Others

4. Cast Upper OBC SC

SC Others

5. Educational Qualifications

Illiterate Primary Secondary

Higher Secondary

Graduation Above Graduation

6. Marital Status Married Unmarried Widowed

7. Year of enrollment 2008 - 09 2009 – 10 2010 – 11

2011 – 12 2012 – 13 2013 – 14

8. Occupation Agriculture Labour

Homemaker Farming

Private employment

Self employed

Construction

Others Unemployed

9. Source of worker’s income other than MGNREGA

Agricultural labour

Farming Private employment

Self employed

Construction Others

No other source

Appendix 107

10. Annual family income

Upto 25000 25000 – 50000

50000 – 75000

75000-100000

Above 100000

11. Individual income Upto 25000 25000 – 50000

50000 – 75000

75000 – 100000

Above 100000

12. MGNREGA Wages

Upto 25000 25000 – 50000

50000 – 75000

75000 – 100000

Above 100000

13. Willing to work in Agriculture labour when MGNREGA is not available

Yes

No

14. Willing to prefer agricultural labour over MGNREGA

Yes

No

15. Reasons for preferring agricultural job over MGNREGA

Strongly agree

Agree Disagree

MGNREGA wages is less than agriculture labour

Working time is less in case of agricultural labour

Effort in agricultural job is high

Payment of MGNREGA wages are delayed

Agriculture sector offer more work days in a year

Repeated nature of agriculture job helps to improve efficiency

MGNREGA works can be scheduled during offseason

16. Changes happened in Social life after enrollment into MGNREGA

Greatly improved

Fairly improved

No improvement

Ability to handle stress

Attendance in meetings

Decision making capacity

Public speaking capacity

Appendix 108

Ability to express opinions

Ability to mentor people

Documentation capacity

Political involvement

Gram Sabha participation

Care in children education

Mobility freedom

Enrollment in continuing education

Participation in SHGs

Group cohesiveness

Self confidence

17. Changes happened economic life after enrollment into MGNREGA

Greatly improved

Fairly improved

No improvement

Total family income

Standard of living

Personal income

Contribution to family income

Spending pattern

Fashion conscious

Dependence to micro finance

Saving through SHGs

Thinking on self-employment

Self-shopping

Investment in home appliances

Consumption pattern

Self-reliance

Book keeping skills

Quality consciousness

18. Changes happened in financial life after enrollment into MGNREGA

Strongly agree

Agree Disagree

Opened bank account

Started regular banking habit

Familiar with bank documents

Started savings

Appendix 109

Holding debit card

Started to borrow from bank

Started to invest in SHGs

Started to avail micro credit

Stressing to prompt repayment of loan

Started own spending

Attained expertise in fund management

Held insurance policy

Started buying on installment scheme

Joined in indigenous chitty

Got role in family finance decision

19. Problems faced by MGNREGA members Strongly agree

Agree Disagree

MGNREGA wage rate is very low

Payment of wage is delayed always

Always not getting guaranteed work days

Increase in wage rate will help to reduce migration cities for job

Asset created are not long lasting

Procedural delays are there

Clash between agriculture season and MGNREGS work exist

Political influence affect the effectiveness of work

Lacking support from Govt. officials

Supervision is very poor

There are delay in issue of job cards

Lacking expertise to perform all the jobs

Facing shortage of tools

Work hours are very lengthy

Work allotted per worker is always less

20. Improvements expected in MGNREGA Strongly

agree Agree Disagree

Wage rate should be increased to market rate

There should be system for monthly payment

Appendix 110

At least 200 days work should be provided

Work hour should be reduced and should make working time more productive

Cooperative farming should be entertained

Govt. Should ensure the smooth conduct of the scheme.

Non farming related works should be scheduled during off season

Provisions should be included in the Act to get full support from Govt. Officials

Political interference could be reduced

Qualified supervisors should be appointed

Work may be allotted according to the expertise of workers

On the job or off the job training may be provided

Fund should be allocated to purchase tools

Work allotment should be based on the work load assessment

Should increase the effectiveness of social audit system

AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON …€¦ · MGNREGA is the most significant movement...

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