Poverty alleviation and the significance of MGNREGA- An appraisal.
Poverty is an unacceptable human condition that should not persist for a long time. In order to develop a country, the first and foremost task is to eliminate poverty and reduce social imbalances. Long term and sustainable economic growth and right programmes and policies are keys to fighting poverty. Reduction of poverty can help growth and enable the poor to participate in the overall economic activities. Not only economic growth may improve the condition poverty, all along development such as quality of life and participation in decision making, need to be focused.
Poverty is a complex multidimensional problem with origins in both the national and international domain. Poverty in India is mainly a rural problem. It is also strongly associated with religion, culture and geographical locations and is highest among scheduled castes and tribes in rural areas. While poverty has declined overall in the last decade, among these groups it has decreased to a much lesser degree. Large number of poorest people lives in semi-arid tropical region. In those areas shortage of water and recurrent droughts impede the agricultural activities. It is entrenched in parts of the populous northern states of Madhya Pradesh, Uttar Pradesh and Rajasthan and extends the eastern states of Assam, Orissa and West Bengal. There is a high incidence of poverty in flood-prone areas, such as those extending from eastern Uttar Pradesh to the Assam plains and especially in northern Bihar. In forest areas, where many tribal people live, the loss of available resources is a major cause of poverty. Coastal fishing communities are one of the poorest communities. Living conditions among fishing communities are deteriorating as a result of environmental degradation, stock depletion and water pollution.
Magnitude of Rural Unemployment in India
Unemployment brings poverty and hardships, it intensifies pressures on women and children ad generally undermines the stability of the households. It is an undeniable fact that unemployment is found in its naked form in rural India. In India the main responsible factors for rural unemployment is lack of capital or can be said improper utilization of capital, the poor use or misuse of natural resources and inadequate employment opportunities.
The Indian economy is divided into organized and unorganized sectors. The unorganized sector in this country is quite large. Most of mining, manufacturing, construction, trade, transport and communications, social and personal services fall in the unorganized sector. Organized sector employment in 1999-2000 was 28.11 million that is about 7.08 percent of the total employment of about 397 million. Interestingly, despite economic reforms employment in the organized sector has been declining in percentage terms. In strict sense, employment in the organized sector was 24.01 million in 1994 and further to 28.11 million in 1999-2000. This cannot be considered as a satisfactory development, because kept declining since 1983. The organized sector had accounted for 7.93 percent of the employment in 1983. Thereafter its share in total employment steadily declined to 7.3 percent in 1994 further to 7.08 percent in 1999-2000.
In the second half of the 1980s on an average 700 million man-days of employment was generated and 890 million man days employment generated in the first half of the 1990s, the real wage rate (at 1980-81 prices) also increased from Rs. 13 per man day to Rs. 15 per man day during the same period. These are the average of all employment programmes and in the addition to the wages paid in kind. Employment generation programmes do not permanently allow the poor to cross the poverty line without continuing the support of these programmes. But, these programmes can have a tremendous impact on reducing the severity of poverty, as its beneficiaries are the poorest of the poor. In fact, in years of natural calamity such as drought, employment generation programmes have successfully prevented rise in the severity of poverty. There is no doubt that a significant portion of the poverty reduction since the 1980s has been effected through direct income generation programmes. However, there is a good deal of argument about the number of persons crossing the poverty line entirely as a result of the anti-poverty programmes, at the root of which is an obscure and complex issue of how to calculate the income generation from the operation of these programmes alone.
Rural Development and Poverty Alleviation in India
Rural development is a socio-economic concept, it mainly deals with the poor inhabitants of rural and interior village areas and they should be highlighted and given the opportunity to enjoy the benefits of development through improved education, health, nutrition and good environment. This is the basic conception of rural development as the social infrastructures could provide the catalyst that would transform the rural areas.
Rural India which represents a huge population is characterized by low income levels, not even adequate to ensure the minimum quality of the life compatible with physical well being. In the post independence period, during 1960s, it was realized that the benefits of rapid growth were not ultimately reaching the target groups and as a result the impact of overall economic growth of the country widened the gap between the poor and the rich. Mainly due to this factor the planning and strategy of rural development was changed.
The decline in rural poverty is attributable both to the growth factor and to the special employment programmes launched by the Government in order to generate more incomes in the rural areas. Hence, in its more limited interpretation, rural development has been confined to a direct attack on poverty through special employment programmes, area development programs and land reforms. (OK)
Rural development in India has witnessed several changes over the years in its emphasis, approaches, strategies and programmes. It has assumed a new dimension and perspectives as a consequence. Rural development can be richer and more meaningful only through the participation of clienteles of development. Just as implementation is the touchstone for planning, people's participation is the centre-piece in rural development. People's participation is one of the foremost pre-requisites of development process both from procedural and philosophical perspectives. For the development planners and administrators it is important to solicit the participation of different groups of rural people, to make the plans participatory.
Various poverty alleviation and employment generation programmes such as Rural Works Programme, Integrated Rural Development Programme, National Rural Employment Programe, Pilot Intensive Rural Employment Programme, Crash Scheme for Rural Employment, Rural Landless Employment Guarantee Programme, Jawarhar Rozgar Yojana, Sampoorna Grameen Rozgar Yojana and many other were implemented to enable people to earn extra income than agriculture.
None of these programmes comprehensively covered the whole country, though in certain parts of the country some of these programmes operated simultaneously for the same target groups. The problems in this areas is that although the programme is meant specifically for the small and marginal farmers, it has catered mostly to the needs of the middle and large farmers as they have easy access to government financial institutions. The major limitation of these programmes was that they were reduced to mere subsidy giving programs, lacking any planned approach to enable the rural poor achieve a higher level of income.
These well intended employment generation schemes have failed primarily due to lack of sufficient resource allocation apart from corruption in the implementation. The basic problem is that, national policies and programmes during the last half century have not helped poor and downtrodden section to emerge from the perennial poverty gap. The income generated programmes does not recognize the importance of increased flow of social inputs through family welfare, nutrition, social security and minimum needs in alleviating conditions of poverty on a long term basis. Further, the policies and schemes have done little for disabled, sick and socially handicapped individuals who cannot participate in normal economic activities. These policies often ignore the consequences of the earning activities of the poor in terms occupational health hazards and adverse ecological consequences.
India’s Poverty and the Significance of MGNREGS
According to the estimates by Planning Commission of India, the proportion of the people living below poverty line remained more than 50 percent till the mid of 1970 without any significant change. As per the 55th Round of NSS, nearly 260 million Indians (193 million in rural and 67 million in urban) remained below poverty line in 1999 – 2000. India’s current official poverty rates are based on its Planning Commission’s data derived from Tendulkar Methodology. It defines poverty not in terms of annual income, but in terms of consumption or expenditure of per individual over a certain period for a basket of essential goods. Further, this methodology fixes different poverty lines for rural and urban areas. Since 2007, India sets its official threshold at Rs. 26 a day in rural areas and about Rs. 32 per day in urban areas. Though these numbers are lower than the world Bank’s $1.25 per day income based definition. As per United Nation’s Millennium Development Goal (MDG) Programme 270 million or 21.9% people out of 1.2 billion of Indians lived below poverty line of $ 1.25 in 2011-12. This number is expected to reduce to 20.3% or 268 million people by 2020.
According to the latest report of the Planning Commission, the number of people living below the poverty line has shrunk to 21.9 percent in 2011-12 from 37.2 percent in 2004-05 because of increase in per capita consumption. The latest numbers on poverty levels are dramatic, they show that the numbers of people below poverty line (as mentioned by the Tendulkar Committee) has shrunk from 37 percent of the population to 22 percent, in the seven years to 2011-12. This is an unprecedented diminish in poverty levels, some 40 percent of those who were poor in 2004-2005 were no longer poor seven years later.
India was ranked 63rd position in the Global Hunger Index in 2013. However, the country has achieved progress against hunger, as India moved up eight places from last year on the Global Hunger Index to rank 55th out of 76 nations. The World Bank estimates that India is one of the highest ranking countries in the world for the number of children suffering from malnutrition. The prevalence of underweight children in India is among the highest in the world and is nearly double that of Sub-Saharan Africa with dire consequences for mobility, mortality, productivity and economic growth. The As per the Global Hunger Index Report 2015, India ranked 20th amongst the leading countries with serious hunger situations. Among South Asian nations, it ranks third behind only Afghanistan and Pakistan with a GHI score of 29.0.
According to United Nation's Millennium Development Goal (MDG) programme 270 million or 21.9% people out of 1.2 billion of Indians lived below poverty line of $1.25 in 2011-2012. In the recently published Human Development Report 2015, focused on the deprivation in the following three elements of human life- longevity, knowledge and a decent standard of living, it was unveiled that India has been placed at 130th position in the 2015 Human Development Index (HDI) among the 188 countries.
India is one of the fastest growing economies, it is also the 12th largest economy in the world. India’s Tenth Five Year Plan has been adopted to complement and meet the UN Millennium Development Goal 2015 targets. The most significant in this plan are the reduction of poverty to only 20 percent, increased employment generation, universal primary education and raising the level of nutrition and universal availability of drinking water. Towards faster and more inclusive growth is the central theme of the Eleventh Five Year plan that was approved by the National Development Council. Rs. 36.44 trillion earmarked for poverty reduction, plan seeks to lower poverty rate by 10%, generate 70 million new jobs and reduce unemployment to less than 5%. The government intends to reduce poverty by 10 per cent during the 12th Five-Year Plan.
The Mahatma Gandhi National Rural Employment Guarantee Act-2005
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 was a part of the commitments made by the United Progressive Alliance(UPA) Government of its Common Minimum Programme and cane in to effect in February 2006 primarily in 200 districts. It was a commendable effort and has attracted national and international attention. It has manifolds objectives. On the one hand it is a social protection measure and implemented on the experience of previous public schemes, especially the Employment Guarantee Scheme (EGS) in Maharastra. On the other hand, through providing guarantee employment in rural areas, it also seeks to improve lobour market outcomes. This Act has dual purpose, it creates employment as well as sustainable assets in rural areas.
India’s Mahatma Gandhi National Rural Employment Guarantee Scheme, which began in 2006 is the largest public workfare scheme in the world. In the 2010-11 fiscal year, the MGNREGS employed 55 million households who put in 2.5 billion work days on 5.1 million projects, financed by a budget of Rs. 394 billion. The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 that created the MGNREGS grants each rural household a legal right to employment of up to 100days per year in public works projects at a minimum wage rate fixed by the concerned state. This employment guarantee programme is primarily intended to enhance the livelihood securities of the people in rural areas by supplementing wage employment opportunities to the unskilled labour force.
The significant features of MGNREGA are 1. guaranteed employment, 2. Kind of right-based employment, 3. Panchayat Raj Institutions are entrusted with the powers of making scheme active in the rural areas, 4. in case creation of employment is not possible the rural people are entitled to get unemployment allowance, 5. Unlike other employment scheme contractors are prohibited to interfere in scheme, 6, another feature is worksite facilities are provided, 7. All the payment of wages are made through Banks or Post Offices, 8. Provision of social audit relating to all expenditure is there, 9. the works undertaken with the purpose of conservation of natural resources and asset creation, 10. Sustainable development of an agricultural economy. (OK)
Mahatma Gandhi National Rural Employment guarantee Act has a five-tier structure of implementation starting from Gram Panchayat at the bottom to the Central Government at the top. Gram Panchayat is the nodal agency at the bottom level that has the authority to select, design and implement the works. Selection of works, execution, monitoring and supervision are done by the Gram Sabha(Village Council). Gram Panchayat has the responsibility to register households, issue job cards, receive applications for employment, provide employment and monitor the works under this scheme.
Specific goals of the Scheme
1. Creation of durable assets and strengthening the livelihood resource base of the rural poor.
2. Creation of social safety net for the vulnerable groups by providing a fall-back employment source, when other employment alternatives are inadequate.
3. Playing the key role for sustainable development of an agricultural economy.
4. Empowering rural poor through the processes of a rights-based law.
Type of Work
Creation of durable assets and strengthening the livelihood resource based of the rural poor people shall be an important objective of the scheme. Following are the permissible kinds of works:
1. Water conservation and water harvesting.
2. Drought proofing(including forestation and tree plantation)
3. Irrigation of canals. Provision of irrigation facility to land owned by households belonging to the SC and ST land beneficiaries land reforms or that of the beneficiaries under the Indira Awas Yojana.
4. Renovation of traditional water bodies including desilting of tanks.
5. Flood control and protection works including drainage in water logged areas.
6. Rural connectivity to provide all weather access.
7. Any other work which may be notified by the Ventral government in consultation with the State Government.
8. Land development.
New works have been added to the existing list of permissible works under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 with a focus to strengthen co-operation between Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and rural livelihoods, particularly in agriculture and land related activities. Besides ensuring durable quality assets, the expansion of NREGS works is likely to improve the socio-economic conditions of marginalized sections of the society, for example, SC, ST. small and marginal farmers, Indira Awas Yojana beneficiaries, indigenous community etc. as many of the new works are now permitted on the land or homestead of specified individual beneficiaries.
In this context, it is worth mentioning here that, the Ministry of Rural Development (MoRD), Ministry of Water Resources (MoWR), Ministry of Agriculture (MoAg) and Ministry of Environment and Forests (MoEF) have taken initiative and evolved guidelines for convergence of Mahatma Gandhi National RuralEmployment Guarantee Scheme (MGNREGS) with the programmes of the other partner Ministries. Creation of durable and quality assets for community as well as for the individual and livelihood security to the rural people are critical issues in rural development. Involvement of community and other stakeholders including officials and members of Panchayats who implement the programme in planning process should be the focus of initiatives of the government.
Convergence through works may be effected in some of the following ways:
- Gap filling through MGNREGS for similar work under the schemes of the department with which convergence is being considered;
- Strengthening of different forms of capital;
- Area Approach;
- Value addition to MGNREGA works;
- Technical support for ensuring quality in planning, selection and execution of MGNREGA works;
- Strengthening of democratic processes
Performance at a Glance of Mahatma Gandhi National Rural Employment Guarantee Act,
|Total No. of Districts
|Total No. of Blocks
|Total No. of Gram Panchayats
|Total No. of Job Cards issued (In Cr.)
|Total No. of Workers (In Cr.)
|Total No. of Active Workers (In Cr.)
Source-http://www.nrega.nic.in/netnrega/home.aspx (Last visited on 12/05/2017)
|Total Expenditure (Crore)
|Expenditure on Wages (Crore)
|Average Wage rate per day per person (Rs)
Source-http://www.nrega.nic.in/netnrega/home.aspx (Last visited on 12/05/2017)
As per the Report of Ministry of Rural Development, Government of India, under the MGNREG Act, during 2015-16 in average more than 48 days employment was provided and during 2016-17 in average 46 days of employment is provided to per household, during the period of 2015-16 total number of households completed 100 days of wage employment is 48,47,975 and during 2016-17 it is 39,73,148 and the total households worked in the period of 2015-16 was 4.8134 crore and during the period of 2016-17 it is 5.1167 crore.
It may thus be inferred that NREGA is just a welfare initiative. It is a development effort that can take the Indian economy to a new trajectory. It has three distinct goals- protective, preventive and prospective. It protects the rural poor from vulnerabilities by providing them demand employment. It prevents risks associated with agricultural investment and forced migration of the rural poor. It brings prospects and good working spirit in rural economy via increased consumption demand. All these pertain to suggest that NREGA can act as a growth engine by expanding rural resource base and integrating the rural economy with the rest.
In the rural areas the major economic activities are irregular and intermittent mainly due to the seasonal fluctuations. This leads to periodic withdrawal of labour force, especially on the part of marginal labours, often women, who shift back and forth between what is reported as domestic and gainful work. The poor economic status of rural people have forced them to use their children for some work. All these facts articulate for protection and sympathy from the Government to safeguard the rural population in our country
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, this law provides the government an opportunity reverse the prolonged neglect of productive rural infrastructure. The focus on poverty has been sharpened and strengthened by our government by restricting and revamping income and the levels of living of the poorest of the poor by introducing MGNREG Act. The reduction of poverty is been given priority in this Act and its, main goal is to remove poverty and create fuller employment. The most important factor which influences the status of a poor is employment. Rural unemployment as a condition under which the worker would be willing to work longer hours or more intensively far a higher income but could have no opportunity of doing so due to the absence of opportunities for working.
The basic economic notion of self-targeting employment guarantee programmes is that the households that are most likely to seek MGNREGS employment are those otherwise unemployed or whose self-employment or any other livelihood options would earn less than the programme’s minimum wage, they are considered as poor. The demand-oriented nature of the MGNREGS is one of its many features as this self-selection is expected to generate a progressive poor participation profile.
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 enacted by the Government of India, is perhaps the most ambitious anti-poverty programmes launched anywhere in the world. The negative findings of the implementation of NREGA have been broadly reported in recent times in the mainstream media. Lack of transparency, leakage of funds, use of obsolete technologies, lack of coordination among agencies, non-participation of the target groups in planning and execution, delay in making payment of wages, lack of qualified personnel in adequate numbers and top-down approaches have been identified as some of the major drawback in the proper implementation of the scheme.
The strategy which can be adopted for rural development as well as poverty alleviation in India the developmental works should be undertaken in the areas of irrigation, road making, rural housing, rural water supply, rural electrification and rural telecommunication connectivity. Specific targets need to be achieved within a certain time frame so that there is accountability in the progress of these initiatives. It is worth mentioning here that Ministry of Rural Development is also promised to fulfill the three goals of Bharat Nirman by achieving the targets of rural connectivity, rural housing and rural water supply within the prescribed time frame.
In some of the states, the National Rural Employment Guarantee Scheme has been recognized as Public Utility Services so as to bring the schemes under the purview of permanent Lok Adalat mechanism. It is a commendable effort in implementation of this scheme. It helps the poor to resolve their disputes in respect of matters relating to NREG scheme. Accordingly the disputes pertaining to NREG scheme are being resolved by the Permanent Lok Adalat for public utility services wherever established under Chapter VI-A of Legal Services Authorities Act. In respect of places where Permanent Lok Adalat for Public Utility Services are yet to be established, the disputes pertaining to NREG Act are being resolved by the Lok Adalat Benches constituted under Section 19 of Legal Services Authorities Act, 1987. Involvement of legal services authorities in resolving disputes arose under NREG scheme is having great impact on the quality of work and in reduction of corruption in the implementation agency.
Improvement and progress in the quality of life greatly depends on good governance, which requires multipronged approach. The development planning for of rural people largely remains in priority. Decentralized development planning involving Panchayat Raj institutions and the Gram Sabha can improve the way for participatory governance while addressing the sustainability and poverty alleviation issues. If the institutions like Panchayats, Gram Sabhas and other local bodies constituted in rural areas play active and commendable role then only the benefits of ambitious rural poverty alleviation programmes will be proved beneficial for needy people of the rural areas.
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* Pratim Sarkar, Assistant Professor, Haldia Law College, West Bengal