Employment and Livelihood Security

through MGNREGA: A Case of a Right-

based Social Protection Floor in India

ILO, Amman

May 2014

Flow

• India: A Few Basic Facts

• Why Rural Public Works Programmes

• MGNREGA:

– Scope, Coverage & Evolution

– Objectives and Goals

– Processes & Provisions

– Costs and Benefits

– Issues & Challenges

– Way forward

India: A Few Facts

3

• 3/4th of India’s 1,128 million people live in rural areas (2013)

• > 66 % of labour force is in agriculture and allied activities

• Poverty 22 % (269.7 million) – 2011-12

• Rural poverty 25.7% (216.65 million) – 2011-12

• Rural Literacy – 67.8% [Male: 77.2% & Female: 57.9%]

• Rural unemployment rate CDS – 2009-10 [Male: 64, Female:

80, Total:68]

• WPR between 1983-84 and 2009-10 stagnant (Male) or

reduced (Female)

Why Rural Public Works Prog.?

• Livelihood insecurity for millions living in rural areas

• Rural-urban/ male-female divide in: – literacy level

– employment and wages

– WPR either remained constant (male) or declined (female) between 1983-84

and 2009-10

• Minimal participation of poor in devt. programmes

• Heavy dependence on agriculture for livelihood

• Low agriculture productivity

• Low & unequal wage rates between men & women

• Need for investment for job avenues in rural sectors

• Environmental degradation

Mahatma Gandhi National Rural Employment

Guarantee Act, 2005 (MGNREGA)

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 legally

guaranteed wage

employment in

every financial year to every

household

whose adults volunteer to

do unskilled manual work

5

Scope & Coverage

• Covered all federal States and sub-state units in 3 phases

(2006 to 2008)

• Total Households (families) : 246.69 million

• 68 per cent (167.82 million) are rural

• 131.4 million (78.3%) rural households have been provided

with job cards

• 44.4 million rural households have been provided with jobs

MGNREGA: Evolution & Transition

HISTORY

The Transition.........

MGNREGA: Transition from “Allocation based

welfare program” to “Rights based, Demand

driven, people centric, bottom-up, self selecting”

strategy

05.09.05: Historic legislation passed

02.02.06: Implemented in 200 districts

01.04.07: Extended to 130 districts

01.04.08: Extended to remaining districts (Currently in 644

districts)

31.12.09: Name of the Act changed w.e.f 02.10.09

MGNREGA: Objectives

Provide not less than 100

days’ work as per demand

resulting in creation of

productive assets of

prescribed quality and

durability;

Strengthen the livelihood

resource base of the poor

Proactively ensure social

inclusion & Strengthen

Panchayati Raj Institutions

(PRIs)

8

MGNREGA: Goals

• Enhance livelihood security of the rural poor – supplement wage-employment opportunities

– provide a safety net for rural poor

• Rejuvenate natural resource base of the area – sustainable rural livelihoods

• Create a productive rural asset base to: – enhance productive ways of self-employment

– augment and sustain rural household income.

• Ensure empowerment of women

• Strengthen grassroots democratic processes

• Stimulate the local economy by providing a safety net to rural poor

MGNREGA: Right Based Framework

• The rights-based framework of MGNREGA ensures

workers’ rights through:

– self-selection of jobs,

– time bound guarantee of getting jobs,

– getting jobs in and around the place of habitation

– flexibility in working hours in a given day

– wage payment in a time bound manner and through

financial intermediaries

– compensation for delayed wage payments

– expeditious redressal of grievance through social audit

(audit by the community itself)

10

Primary Stakeholders & Roles

1. Central Govt: Provide funds, ensure that the

spirit of the Act is observed

2. Federal Govts: Preparation of Scheme &

Implementation

3. Self-govt. institutions : Planning & Execution

4. Workers: Rights & entitlements

5. Community: Planning & Oversight

Permissible Works • Works categorised into 4 broad areas

– Public works for NRM

• soil and water mgt, afforestation, land devt. etc.

– Individual assets for vulnerable groups

• Land productivity, livelihood promotion, fallow/waste

land devt., IAY house, livestock promotion, fisheries

promotion

– Common infrastructure for NRLM compliant SHGs

• Agri-productivity, common work-sheds

– Rural Infrastructure

• Sanitation, connectivity, play field, GP buildings, food-

grain storage, maintenance of assets

Category-wise Public Works Taken-up

Water conservation

37%

Works on individual

lands 12%

Rural Connectivity

11%

Land development

5%

Rural Sanitation

28%

Any Other Works

7%

Water conservation

46%

Works on individual lands

11%

Rural Connectivity

12%

Land development

6%

Rural Sanitation 15%

Any Other Works

10%

FY 2012-13 FY 2013-14

Financing MGNREGA

• Central Government: – Amount required (100%) for payment of wages for

unskilled manual work

– 75% of the material cost of the scheme including payment

of wages to skilled and unskilled workers

– 6 % administrative cost over and above the wage and

material cost

• State Government – Cost of unemployment allowance payable under the

scheme

– 25% of the material cost of the Scheme including payment

of wages to skilled and semi-skilled workers

Expenditure under MGNREGA 2006-2013 (Rs. In Million)

Year Wages Materials Total

Expenditure

Wage: Material

Ratio (%)

1 2 3 4 5

2006-07 584.2 275.8 882.3 68:32

2007-08 1,073.8 461.7 1,585.6 70:30

2008-09 1,820.0 810.0 2,725.0 69:31

2009-10 2,557.9 1,108.4 3,790.5 70:30

2010-11 2,568.6 1,189.1 3,937.7 68:32

2011-12 2,430.6 1,065.0 3,707.2 70:30

2012-13 2,712.8 1,040.3 3,965.7 72:28

2013-14 2,609.7 915.9 3,746.8 74:26

Total 16,357.8 6,866.5 24,341.1 70:30

Source: Ministry of Rural Development (www.nrega.nic.in)

MGNREGA & Decent Works

Variables Enabling Provisions

Productivity Linked to Agricultural productivity (soil and water)

Freedom Legal sanctity, right to work

Equity Equal remuneration, gender neutrality and linked to notified

Minimum wages

Security Employment insurance, and broadening of choices

Work Hours 8 hours with an hour of break

Human

dignity

No compulsion, application for job, choice of works, choice of

date from which jobs will be performed

Working

Conditions

Worksite facilities defined in the Act. Provisions are made for

hospitalization in case of injury, ex-gratia in case of death

and permanent disability, crèche facility for children and

grievance redressal systems

19

MGNREGA – Impact

Employment to 47.6 million

Households (during 2013-14)

Reduction in Distress Migration

Enhanced Food Security

Higher Land Productivity

Women Empowerment

Equal Wages for Men and Women

Higher Bargaining Power for Workers

Financial Inclusion: 9.37 Crore accounts

in Banks and Post Offices

Major Safety Net.

Strengthening of Community Level

Decentralized Democratic Institutions

(Panchayats) 20

Issues & Challenges

• Huge Gap between Labour Projection & Demand at Field Level

• Accurate and Timely Capture of Demand for Work

• Inadequate HR at Each Level of Prog. Implementation

• Delay in Payment of Wages

• Capacity Building Issues

• Poor Quality & Productivity of Assets Created under

MGNREGA:

• Social Inclusion of the Marginalized & Vulnerable Groups

• Transparency & Accountability Issues

• Grievance Redressal Mechanism

• Information, Education & Communication (IEC)

• Convergence & Quality Management

Way Ahead

• Strengthening Decentralised Planning and Preparation of

Realistic Labour Projections

• Facilitating Accurate and Timely Capture of Work Demand

• Participation of Marginalized & Vulnerable Groups

• Organizing Workers to Articulate Voice & Demand

• Interventions for Vulnerable Groups

• Electronic Fund Management System (e-FMS)

• Payment of Wages at Doorstep: Business Correspondents

• Encourage 100% Electronic Muster Roll (e-MR)

• Convergence and Collaboration with other Ministries/Depts.

• Transparency and Accountability

THANKS