Implementation of MGNREGA & its impact on Rural Madhya Pradesh.

AuthorFernandes, Denzil
PositionMahatma Gandhi National Rural Employment Gurantee Act


The National Rural Employment Guarantee Act (NREGA), legislated in 2005, is considered one of the best legislations by the erstwhile Dr. Manmohan Singh-led UPA Government as it has been a bold attempt to make the development process more participative and inclusive. This legislation embodies the true spirit of the Directive Principles of State Policy enshrined in the Constitution of India by providing the right to work to the poorest sections of society in rural India. In order to boost economic growth through inclusive development policies that reduce rural unemployment and under-employment, this legislation aims at (i) providing guarantee of gainful employment within the vicinity of the rural people with a statutory minimum wage; and (ii) creation of durable assets and strengthening the resource base of the rural poor. Renamed in 2009 after the Father of the Nation, Mahatma Gandhi, this Act provides at least one hundred days of guaranteed wage paid public employment in a financial year to every household whose adult members volunteer to engage in unskilled manual labor. It is hoped that the implementation of this scheme would increase availability of employment in rural areas resulting in an increase in rural incomes and purchasing power of rural poor; ensure greater participation of women and backward communities; improve agricultural productivity; reduce distress migration from rural areas; and strengthen rural infrastructure through asset creation in villages and regenerate natural resources required to boost the local rural economy.

The first phase of the implementation of MGNREGA began in 2006 covering 200 most backward districts of India, which was later extended to all the nearly 600 districts in the country in 2008. Madhya Pradesh, being one of the backward states in India, accounted for 18 districts that were covered in the first phase of implementation. The all-India performance of MGNREGA has been impressive according to Government statistics. Since its inception over 1200 crore person days of employment has been generated and over Rs. 1,00,000 crore of wage payments were made to rural households. On an average 5 crore households were provided with employment annually since 2008. Since wage payments are made through bank/post office accounts, over 10 crore new bank/ post office accounts were opened. Rural wage rates increased enhancing rural household incomes, especially those belonging to marginalized communities such as Scheduled Castes and Scheduled Tribes. In addition, MGNREGA works resulted in the development of rural assets such as roads and irrigation canals, besides water conservation, water harvesting, flood protection, drought proofing and renovation of traditional water bodies.

Periodic independent evaluation of the implementation process of MGNREGA as well as its impact on rural India is essential for an unbiased view of an important flagship rural development program undertaken at the national level. Since Madhya Pradesh is one of the under-developed states in India, an analysis of the implementation and impact of MGNREGA in Madhya Pradesh provides many insights into the effectiveness of the implementation of government policy and programs at the grass root level.

Madhya Pradesh is geographically the second largest state situated in Central India. With a population of 7.26 crores, it is the sixth most populous state in India. A large proportion of its population consists of backward communities such as Scheduled Castes (15.6 %) and Scheduled Tribes (21.1%), according to Census 2011 the share of agricultural workers in total rural work force was 82.5 percent in 2004-05. Out of the total rural workers, farmers constitute 61.4 percent and 38.6 percent belong to agricultural laborer category. In the same survey, it was found that out of the total agricultural laborers Scheduled Tribe and Scheduled Castes constitute 35.9 percent and 28.5 percent respectively (NSSO, 2006). If we look at the data of Rural Labor Enquiry Report 1999/ 2000, Scheduled Caste male and Scheduled Caste female laborers earned Rs. 30.1 and Rs. 24.44 per person respectively and Scheduled Tribe male and Scheduled Tribe female laborers earned Rs. 29.85 and Rs. 26.05 per person respectively in Madhya Pradesh. According to the 66th Round of NSSO data, 12.3 per cent of rural households are landless while 63.2 per cent of them are small and marginal farmers. Poverty estimates 2011-12 of the Planning Commission reveal that 35.74 per cent (i.e. 190.95 lakhs) of the rural population in Madhya Pradesh are living in poverty. This is only marginally lower than the NSSO data for 2004-05, which estimated that rural poverty was 36.8 per cent in Madhya Pradesh (Table 1).

Macro-economic data indicate that the period during which MGNREGA was implemented in Madhya Pradesh did not result in a significant reduction in rural poverty as one would have expected. Earlier studies have also pointed out that there have been encouraging results in various aspects of MGNREGA such as increase in job demand and registration of workers (Ambasta et al., 2008); nevertheless they also highlighted several shortcomings in the implementation of the scheme, such as inadequate implementation apparatus and lack of administrative and technical manpower, that reduces its efficacy to become a means of inclusive development in rural India (Chhabra et. al., 2010). In addition to the evaluation reports of the Government on MGNREGA, an analysis into the implementation process and impact of MGNREGA in Madhya Pradesh is essential after seven years of its implementation in order to uncover the impediments that prevent the effectiveness of the schem.

Objectives & Methodology

In response to the need to evaluate the effectiveness of the implementation of MGNREGA during the last 5-7 years, Indian Social Institute, New Delhi, conducted a research study on the "Implementation Status and Impact of MGNREGA in Madhya Pradesh". This research project was part of a larger study of MGNREGA in six States, namely, Bihar, Odisha, Jharkhand, Chhattisgarh, Uttar Pradesh and Madhya Pradesh. The study of MGNREGA in Madhya Pradesh was conducted in collaboration with Gopal Kiran Samaj Seva Sansthan (GKSSS), the Gwalior based local project partner agency, which provided its services in data collection and other research activities from August 2012 to April 2013.

The study adopted the survey method drawing a sample of 480 households, which included 30 households randomly chosen from each of the 16 villages chosen from 8 blocks in 4 districts of Madhya Pradesh. This implies that after 4 districts were chosen from 50 districts of Madhya Pradesh, 2 blocks were chosen from each sample...

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