Dialogue  April-June 2009 , Volume 10 No. 4

Employment Guarantee: Long Road Ahead

Amal Mandal


The National Rural Employment Guarantee Act (NREGA) is the landmark legislation in the history of social security and presently the largest employment guarantee scheme in the world. This Act brings forth the crucial role of the state as the provider of livelihood for the teeming millions, offers a new deal to the rural poor and strives for creating a base for sustainable rural development. It is unparallel in terms of design, methodology and objectives and by conferring (at least partial) right to employment it goes beyond mere poverty alleviation. This ‘revolutionary step’ is fervently expected to impel a silent revolution and rural resurgence.

The NREGA has evoked panoply of optimistic expectations. Drèze (2004) summed up the poignant potentialities, some of which are already manifested: freedom from starvation, reduction in distress migration from rural areas, foundation of productive assets so crucial for unlocking the growth potential of rural India, change in rural power equation, establishment of equitable social order, economic independence and empowerment of rural women and revitalisation of panchayat institutions. Moreover, growing awareness of employment as an entitlement (Drèze 2007; Roy et al 2008) and emergence of the scheme as an axis of struggle for social change and fight against exploitation (Patel 2006) are also harped. At the same time, the act has drawn sharp criticism, particularly from ‘minimalist state’ perspective.

 In view of the fact that state Schemes (NREGS) are presently in operation across all 596 districts, one needs not be sceptical about source of fund or viability of income support strategy. Nor it is indispensable to insist on, say, empowerment of women, panchayat, transformation in power structure or fighting out injustice, which are indeed sporadic and incidental upshots of successful implementation of the scheme. After all, NREGA has modest avowed objective of livelihood security and durable asset creation. Following the universal dictum of first thing first, concerted focus should primarily revolve around fructification and actualisation of the professed goals. The starting premise of evaluation should realistically be the three watchwords, which Prime Minister Dr. Singh coined during launching of the scheme in Andhra Pradesh: “outlays must be matched by outcomes, productive assets must be created and guarantee must be implemented in true spirit.” For the cause of the poor, it is imperative to scan implementation process, identify the nature and cause of deficiencies and plug the loose ends that are holding up the efficacy of the scheme.Verily, the NREGA is an opportunity and challenge.


Poor Progress

Supplementary wage employment through public works has consistently been the conscious effort of many schemes. However, NREGS is sui generis as it statutorily proclaims employment as a right and through the process of employment strives for durable asset creation that will eradicate rural poverty on sustainable scale and basis. Notwithstanding its huge potential, the report card of NREGS relating to employment generation corroborates that the employment requirements of rural households are yet to be met adequately and uniformly and the perceptible portends are not reassuring.

CAG (draft) Report 2007, while reviewing records of 465 Gram Panchayats across 26 states, revealed that only 18 days of work were available to each registered household during 2006-07. Only 3.2 percent household could get 100 days work. Thus, the “provision of employment fell far short of the targeted employment vis-à-vis annual plan and legal stipulation”, the report rued. PRIA Survey, 2007, in 21 districts across 14 states disclosed that only about 6 percent of total households could boast of having 100 days work and the remaining 94 percent either got miniscule number of workday or no work at all. As per Union government’s own assessment, 37.5 man-days of work had been provided to job seeking households. Till February 2007, 1.64 crore households were offered work and 62 crore man-days could be generated against the target of 164 crore.

If the overall track record leaves much to be desired (Mandal 2008), another distressing dimension relates to its pathetic performance in the poor states having poverty ratio higher than the national rate. Though variability in implementation across states is understandable, the coverage and performance of the scheme ought to have close association with the incidence of poverty. The employment generation records of Bihar, Chhattisgarh, Jharkhand, Orissa, Uttar Pradesh, Madhya Pradesh and West Bengal are rather dismal. During 2006-07 the average number of person-day generated per registered household was 35 in Bihar, 58 in Orissa, 32 in UP and 14 in West Bengal. In poorer states, the fund utilization ratio was clearly lower and the institutional arrangement for implementing the scheme was deficient (Chakraborty 2007). The below performance of the scheme in those states where it matters the most is one worrying eventuality. When the people afflicted by pervasive poverty or acute distress(flood in Bihar) seldom get works the scheme loses much of its shine. When the scheme is flung to the winds in those areas, which deserve it more desperately, the objective and effectiveness of the scheme deflate.

 The guarantee condition of the scheme, one exclusive feature, seems to have been diluted in almost every front. Neither 100 days work is available for most of the job seekers, nor are all aspirants getting the work as right. People in general are not demanding employment as right for variety of reasons. Weaker sections are less aware of the scheme and some are fearful to challenge the abnegation of the right because of wrath of the powerful blocks (Dogra 2008). The dominating patterns of erstwhile schemes are equally discernable and fund availability and benevolence of the dispensers continue to be decisive. Under-payment and non-payment of wage rule the roost. The scheme stipulated minimum wage per day in accordance with the scheduled rate in the state/region. Payment of statutory minimum wage to workers is exception rather than the rule. PRIA survey found that in West Bengal 76 percent workers received less than prescribed minimum. In Rajasthan, so far the best performing state, Rs. 51 was paid against mandated 73. Such flagrant violation and outright exploitation is unlikely to evaporate immediately because the underlying causes are deep rooted. Indeed, the implementation of the scheme in letter and spirit is to confront the vested interest of the dominant rural leadership. Successful execution of the NREGS would push up the general wage rate in agrarian sector. This would increase the cost of labourer, reduce the extent of surplus income, therefore the possible threat to the class interest of the rich peasantry has to be strangled (Bandyopadhyay 2007). The problems that plagued previous programmes are haunting the NREGS, which is yet to shed the baggage of a public scheme.

The invocation of the ‘penalty clause’ -- unemployment allowance if employment cannot be provided within 15 days of demand -- remains ritualistic. The states are clearly reluctant to disburse cash compensation as the money has to be paid form the state coffer and such allowance would tacitly testify the failure of the implementing agency or the state. To scuttle the possible claim of such allowance, the official figures tend to give the impression that almost everyone who demanded actually got the job. More ominously, job applications are being received without putting date of receipt (West Bengal, Rajasthan, Uttar Pradesh). This design ensures that 15 days compulsion does never get over. Indeed the aversion is not surprising or atypical -- under EGS in Maharastra the unemployment allowance virtually remained one dead letter clause. Only in two instances unemployment allowance has so far been sanctioned, though people, particularly tribal of Madhya Pradesh had to fight for and wrest it.


Serving the Poor

 There had been acrimonious debate whether NREGA would cater exclusively to BPL families or not (Mandal 2008). Consequently, it has been extended to all willing rural household. This all-inclusive provision is otherwise laudable as it includes those abjectly poor who are out of the BPL list for whatever reason. However, the expectation is that not all rural households will be interested, those having stable source of income or engaged in activities fetching higher wage will certainly stay away and only genuine poor will seek unskilled manual works. Considering the incidence of rural poverty, occupation and wage structure, around 55 million poor are expected to avail the NREGS benefits.

The survey and assessment reports belie such presumptions. More and more families are registering and clamouring for works. Total registered families far exceed the benchmark of 55 million. Almost all rural families -- certainly more than listed BPL and somewhere more than Census enumeration -- have got job card. Even educated youths are not shying away. Such an eventuality is related more to the harsh reality around than misconception like job card as BPL card.

 When job seekers are many, when available works are disproportionate, who are going to get the opportunity? There is real possibility, buttressed by our field experience in Cooch Behar district of West Bengal, that the poorer may get sidelined and relatively non-poor may garner the impending benefits. The all-inclusive coverage to all domiciled rural household embraces the conventional fallacy of treating all rural people as homogeneous undermining the fact that wage employment is more indispensable for the vulnerable and chronically unemployed people and the scheme can unwittingly come a cropper for the hardcore poor.

 In rural areas overall economic condition of the people and work opportunities therein are worsening. 41 percent of total rural families are presently landless and the proportion of marginal workers is increasing steadily -- about threefold increase compared to 1991. At the same time, agricultural productivity and non-farm activities are declining drastically -- fewer than 50 days of work is actually available in many states. Work opportunities are also steadily slumping. During 1994-2000, total rural employment (all kinds put together) grew at the miserable rate of 0.58 percent per year, which was in fact sapped by 1.7 percent rural population growth rate. At the same time, agricultural workers hardly get prescribed minimum wage. In the hope of getting work and better wage -- sometimes for easy or even manipulated works -- many relatively non-poor vie for NREGA works (Jha et al 2008). Moreover, subsistence struggle of rural poor gets acute particularly during off-peak season when the wage earning on continuous basis becomes a question of life or death. If the languishing work opportunity and worsening economic situation make a strong case for the NREGS intervention, it inadvertently aggravates the prospect for the poorer.

When the supply scarcely meets the demand, the compulsion of rationing, rotation, exclusion and political pulverization pervade in. The scheme ordains an elaborate and cumbersome procedure for registration and seeking employment, which may inhibit and strangulate the poorer. The formalities for job card, written application demanding job and unemployment allowance require a fair bit of information, awareness, skill and support. It is no revelation that the poorer are less aware, less assertive and swayed by dependency syndrome. The negative attributes of the poor can be (and are) exploited by the power brokers. Information dissemination, awareness building and support service are clearly lacking everywhere barring isolated areas where civil society organisations are active. In this context, the relatively aware and (politico-economically) weighty sections are likely to highjack the impending benefits undermining the interest of the hardcore poor -- the purchase of motorbike or sending son to engineering college (Tata 2007) is a testament more to the class character of the workers than a triumph of the scheme! Travesty is that despite methodological fineness and encompassing strategies, the hapless sections of ruralites have all along been sidelined and the better-off sections have been reaping most of the scheme benefits.

 No public scheme operates in socio-political vacuum. Politics invariably influences the selection of project, project site and worker. And the NREGS cannot be the exception. As the West Bengal case vindicates, dominant politicians, together with pocketing few bucks by fooling others, have invented ways to use the scheme as patronage distribution for political mobilisation (Bhattacharya et al 2007). The political motive rather than poverty eradication per se is getting entrenched and the poor belonging to the opposite spectrum are unable to compel or comply with the dispensers are unlikely to avail work opportunity.


Comprehensive Planning

Why are the available work opportunities few and far between? The CAG report reasoned: not for fund constraints but for delayed and deficient planning the scheme was performing poorly. Comprehensive planning is critical and this will determine the effectiveness of the scheme. If the works are not made available in terms of perceived time-period and quantum, the prospect of livelihood security and reduction in out-migration will only nosedive.

For catering to the demands of potential job seekers and creating durable asset many preparatory works including perspective plans require to be put in place. The demand for employment including time-period has to be assessed and estimated in advance. On the supply side, many aspects have to be skilfully crafted in: preparation of project or shelf of works which are technically and economically viable, durable, compatible with wage-material ratio and with the scope of sufficient workdays. Not ideological but practical problems compound when the demand estimation and inventory of projects are to be undertaken at least at Gram Panchayat or preferably at its constituency level. Household survey (as envisaged in state regulations) for ascertaining possible demand and involvement of Gram Sabha are largely wayward, to put it mildly. The imperative of resource planning, technical, managerial and administrative competency and commitment is not always evident or easily feasible at panchayat level.

Accurate demand estimation and convergence of development programme are critical for achieving demand-supply equilibrium. Mere merger of erstwhile programmes will hardly open up sufficient work opportunity, were it so NREGS would not have been required. Moreover, absence of such synergy will lead to overlapping and duplication of works. In this context, the observation of the second Administrative Reforms Commission is worth pondering. The Commission has suggested that all service delivery schemes (health, water, sanitation) should converge with, their fund brought in and the manual aspects (earthwork) should be executed under the NREGS.

The types of works being executed will obviously determine how far durable and critical assets will accrue and success in this sphere will match outlay with outcome. Perusal of the activities that are being taken up evinces divergent as well as drifting trends. States are opting for variety of works and reasonably so as the local specific requirements vary significantly. Considering the total number of works, water conservancy tops the list, though few central Indian states togetherly account for overwhelming proportion. Road construction gets uniform priority across the states. Despite unequivocal importance of rural connectivity, few points deserve pondering. What were panchayats doing over the years with so many schemes and whooping finds? Kuchha road construction tends to be the fixation because it requires no technical planning, creates considerable man-days and above all its ephemeral nature -- washing away during monsoon -- offers the scope of doing it over again. As there are many programmes with focus on rural infrastructure -- Bharat Nirman for instance -- is not it worthwhile to seek convergence of the programmes so as to augment work opportunities under the NREGS?


Concluding Reflection

Everybody acquiesces that comprehensive and sustainable measures are urgently necessary for soothing the plights of abjectly poor people. Myriad wage for work and development schemes -- some with subsidy and credit components -- have been tried out, but with little headway. Even the outcome of IRDP, having encompassing strategy of asset transfer was no less appalling -- only 14 percent beneficiaries could cross over the poverty line in its 20 years operation. Studies authenticate that the failure of those schemes was primarily due to ineffective delivery system and programme mismanagement. They testify long trail of corruption, fund embezzlement, wrong selection of beneficiaries and inflexible framework. Those schemes proved to be one top-down dispensation with a national framework based on the normative conception of public good, narrow management notion amenable to manipulation by the bureaucracy and power brokers. These in effect transferred dependency of the poor from one source to another. On the perspective of piteous past performance, it would be naive to expect that socio-economic constraints, administrative inertia and political nitty-gritty would not be arresting this time or the NREGS would regenerate rural society on an unprecedented scale simply because of statutory right to employment. When the multitude of schemes have had no serious impact over the decades, how one can expect the NREGS to work wonder? After all, the scheme implementation is to subvert the entrenched phenomenon of beneficiary-benefactor, insensitive and ineffective delivery mechanism and vested interest of the socio-politically dominant groups.

Notwithstanding the hype, the scheme can at best render temporary succour to the poor or palliate transient poverty. It neither intends to nor is capable of redressing structural causes of poverty or pernicious problem of unemployment. Even if one gets 100 days work that will arguably be inconsequential in the long run because one will be left high and dry after few days feast. There is positive correlation between diminution of rural poverty and investment in and growth of agricultural and the declining spree therein can not but auger ill. Though the experience of IRDP and SGSY is not that reassuring, opening up of self-employment avenues in secondary and tertiary sectors is another worthy option worth venturing.


        ARC (Second Administrative Reforms Commission). 2007. Unlocking Human Capital, Entitlements and Governance. Government of India.

        Bandyopadhyay, D. 2007. ‘A Betrayal of Workers’ Cause.” The Statesman, October7.

        Bhattacharya & Sarkar. 2007. ‘Cads, Cadre Confiscate Job Cards’. The Statesman. 14-18 October.

        CAG (Comptroller and Auditor General of India). 2007. Performance Audit of Implementation of National Rural Employment Guarantee Act, 2005 (NREGA). (Draft report submitted to the Ministry of Rural Development).

        Chakraborty, Pinaki. 2007. ‘Implementation of Employment Guarantee: A Preliminary Appraisal.’ Economic & Political Weekly. February 17.

        Dogra, Bharat. 2008. ‘Huge Potential and Genuine Fears.’ The Statesman, May 23.

        Drèze, Jean. 2007. ‘NREGA: Dismantling the Contractor Raj’, The Hindu, November 20. 

        Drèze, Jean. 2004. ‘Employment as a Social Responsibility’. The Hindu. November 22,

        Jha, Gaiha & Shankar 2008. ‘Reviewing the National Rural Employment Guarantee Programme’. Economic & Political Weekly. March 15.

        Mandal, Amal. 2008. ‘Guaranteed to Flop…’ The Statesman. May 7.

        Patel, Sujata. 2006. ‘Empowerment, Co-option and Domination’. Economic & Political Weekly. December 16.

        PRIA. 2007. Role of Panchayati Raj Institutions in Implementation of NREGA . National Study: Phase II. New Delhi.

        Roy, A.J, Dreze & Dey. 2008. ‘Finish the Job’ Hindustan Times.January 31.

        Tata, Madhavi. 2007. ‘A Rural Dream’?. Outlook. 6 April.


Dialogue (A quarterly journal of Astha Bharati)

Astha Bharati