National Rural Employment Guarantee Act (NREGA)

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Introduction India has a 30-year history of wage employment programmes (WEPs). Problems with WEPs: low programme coverage more than 30% of beneficiaries not from most needy group bureaucracy dominated planning; little participation of community in planning work of women lower than stipulated 30% only 16-29 days of employment provided to a household assets created are not durable corruption reports of false muster rolls; involvement of contractors; less than prescribed wages

Why another wage employment programme? Political imperative 1. The NDA governments India Shining campaign failed to win votes in May 2004 elections. 2. The UPA came to power on a rural/agril development vote. 3. National Common Minimum Programme of the UPA Government (May 2004) stated: The UPA government will immediately enact a National Employment Guarantee Act. This will provide a legal guarantee for at least 100 days of employment to begin with on asset-creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower middle-class household. In the interim, a massive food-for-work programme will be started.

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Economic Imperative Agricultural growth slowed down since mid-1990s Rural wage/incomes stagnating Gini coefficient of income worsening More than 300 million poor in 2004-05 Maoist insurgency in 160 of 619 districts

Jean Dreze, a Belgian economist, is the chief author of the scheme.

NREGA
The Goi launched NREGA on February 2, 2006. Objective: To provide 100 days of employment for poorer sections in rural areas and, in this process, improve land productivity, income and employment. For 2006-07, 200 poorest districts were covered (first phase) In 2007-08, 330 districts were covered (2nd phase) Since April 2008, all districts are covered.

Salient Features of NREGA NREGA introduces a rights based framework. So it addresses itself to

working people and their fundamental right to life with dignity. It is not merely a scheme but an Act providing legal guarantee to work. It guarantees 100 days employment in a financial year to any rural household whose adult members are willing to do unskilled manual work. It provides unemployment allowances if the job is not provided to the rural household. The Act empowers ordinary people to play an active role in the implementation of employment guarantee scheme through Gram Sabhas, social audits, participatory planning and other means. NREGA calls for formulation of a Rural Employment Guarantee Scheme by each State Government from the date of commencement of the Act. The cost of the programme will be borne by the central and state governments on 90:10 basis. Minimum wage has been fixed at not less than Rs. 60 per day, which has been revised upwards subsequently. It is expected to transform the geography of poverty.

Method of Implementation A household that wants work under this Act should submit names, age, sex and addresses of its adult members to the local Gram Panchayat for registration. Upon registration, a job card will be issued by the Gram Panchayat with photographs of adult members of the registered household. The job card will be document that gives entitlement for employment for an applicant. The eligible applicant would get employment within 15 days of demand. If no employment is provided he/she will get unemployment allowance. The statutory minimum wage applicable to the agricultural workers in the State is to be paid. Work will have to be provided within 5 km. of applicants residence. One third of beneficiaries will be women. Safe drinking water, shades for children and first aid box would be provided by the implementing agency at work site. If worker is injured, the State Government will extend free medical treatment. No contractor will be involved.

 The Gram Sabhas will identify works to be taken up. The Panchayts have the principal responsibility for planning, implementing and monitoring. Social audit and right to information will apply to each aspect of implementation. Local Vigilance Committee will be set up.

Works listed in the Act

Focus will be on creation durable assets. The activities to be preferred are Water conservation and water harvesting Drought proofing, including afforestation and tree plantation Irrigation canals including micro and minor irrigation works Provision of irrigation facilities to land owned by the SC/ST households, beneficiaries of land reforms, beneficiaries of Indira Awas Yojana etc.

Renovation of traditional water bodies. Land development Flood control works, including drainage in water logged areas Rural connectivity to provide all weather roads Any other work, which may be notified by the Central Government in consultation with State Governments.

Performance of NREGA so far

Actual composition of work (in first two years): Water conservation 60% Land development 13% Drought proofing 6% Road connectivity 16% Others 5%

Volume of employment provided

Increased from 43 days per household in 2006-07 to 49 days per household in 2008-09. Employment per household under this scheme is much higher than SGRY, which was only 26 days in 2006-07.

Performance of NREGA in All India Indicators 2006-07 2007-08 2008-09

(1) Cumulative no. of 3,78,50,390 6,47,40,595 10,09,31,550 households issued job cards (2) No. of households who 2,11,88,894 3,43,26,563 4,53,89,968 demanded employment (3) No. of households 2,10,16,099 3,39,09,132 4,49,40,870 provided employment (4) Person days of 3456.6 6220.0 21601.0 employment (in lakh) (5) Days of employment per 43 42 49 household (6) % of works completed 47.15 46.04 44.46

The shares of SCs, STs and women in total employment days under NREGA have been high. Share of 2006-07 2008-09 SCs 25% 29% STs 36% 25% SCs + STs 61% 54% Women 41% 48% However, there is wide inter-state variation implementation of NREGA (see table below). in the

Good performers in 2008-09: Raj, Tri. MP, Chatt, UP, AP, Jhar, Maha Bad performers in 2008-09: Ker, Guj, Bih, WB, Pun, Kar

Interstate Variation in Implementation of NREGA Per Household days Sl. Rank State of employment No. 2006-07 2008-09 2006-07 2008-09 1) Andhra Pradesh 31 48 16 6 2) Assam 72 40 2 11 3) Bihar 35 26 14 19 4) Chhattisgarh 56 55 6 4 5) Gujarat 44 25 10 20 6) Haryana 48 42 8 10 7) Himachal Pradesh 47 46 9 9 8) Jammu & Kashmir 27 40 19 12 9) Jharkhand 37 48 13 7 10) Karnataka 41 32 12 16 11) Kerala 21 22 20 21 12) Madhya Pradesh 69 57 3 3 13) Maharashtra 41 46 11 8 14) Orissa 57 37 5 14 15) Punjab 49 27 7 17 16) Rajasthan 85 76 1 1 17) Tamil Nadu 27 37 18 13 18) Tripura 67 64 4 2 19) Uttar Pradesh 32 53 15 5 20) Uttarakhand 30 35 17 15 21) West Bengal 14 26 21 18 Source: http://nrega.nic.in/states/nregampr.asp

Some Suggestions for Improving Performance

According to CAG report, the NREGA is a superior programme for poor than earlier WEPs. But procedural irregularities are much in the case of NREGA and the officers are afraid. This aspect needs to be looked into. Effective social audit - social audit should be performed by the GPs. NGOs can also assist in this process. Awareness should be expanded. Information, communication, education are urgently needed. Technical engineering support at the local level is essential for quality/durability of assets necessity of capacity building in PRIs. There should be full transparency in wage payment. Also timely payment of wages. States have overburdened existing staff. NREGA provides for new staff appointment. Leakages can be reduced if Wage payments are directly into PO/Bank accounts in every state Social audit institutionalized in every state Grievance redressal rules/mechanism implemented Strong evaluation and monitoring system introduced