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Chapter-I

INTRODUCTION: OBJECTIVES, NEED FOR THE STUDY, HYPOTHESES AND METHODOLOGY

Indian economy is growing at rapid pace alongside of globalisation but rural India

is lagging behind many fronts – poverty, unemployment, illiteracy, ill-health, lack of

sanitation and safe drinking water, and so on. The objective of ‘Growth with Social

Justice’ is yet to be realised. Even after 60 years of Independence, more than one fourth

of rural population is found to be below poverty line. There are about 2209.24 lakh

persons constituting about 28.7 per cent of total rural population of India under poverty

(Planning Commission 2007).1 The unemployment rate of males in the labour force of

rural India is 85 person-days per thousand person-days and 81 person-days per

thousand days in respect of females2. The growth of unemployment, stagnation and

slow growth of agricultural productivity, distressed farmers committing suicides in

various parts of the country, increase of distress migration from rural to urban areas are

some of the hindering factors of growth. Such situation is not acceptable in a welfare

state like India. An attempt has been made to moderate the consequences of economic

reforms which has increased income and regional inequalities in the reform phase3.

Further, development economists have often cautioned that unless poverty is

eradicated, growth potential of an economy cannot be harnessed justifiably. It was also

realised that the agriculture sector alone cannot contribute much to solve the problem

of rural poverty and unemployment on a sustained basis.

1 Planning Commission (2008), “Eleventh Five Year Plan” (2007-12), Volume-III, Agriculture, Rural Development, Industry, Services and Physical Infrastructure, Chapter IV , Planning Commission, Government of India, Oxford University Press, New Delhi, p. 80. 2 NSSO (2009), “Employment and Unemployment Situation in India” (2007-08),Part-1, NSSO 64th Round Report No.515, National Sample Survey Organisation, Ministry of Statistics and Programme Implementation, Government of India, New Delhi, July 2007to June 2008. 3Ahulwalia, M.S (2000), “Economic Performance of states in Post-Reforms Period”, Economic and Political Weekly,

Vol.XXXV, No.9, 2000, pp 1637-48.

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There is a constitutional context as well that the Article 41 of the Indian

Constitution provides a non-justifiable ‘right to work’ under the Directive Principles of

State Policy and proclaims: “The State shall, within the limits of its economic capacity

and development, make effective provision for securing the right to work in case of

unemployment”.

In the above noted perspective, Government of India has initiated number of

wage employment and self-employment programmes to alleviate poverty,

unemployment and underemployment. Many of those programmes have their own

limitations as indicated in various evaluation reports (Singh K 2008)4. The reason may be

that most of these programmes have been implemented by local contractors who have

emerged as major agents of exploitation of rural poor, especially women.

“The best way of undertaking necessary public investment is by enshrining it as a

Constitutional Right. This employment programme cannot be allowed to remain

dependent on the moody munificence of a vacillating welfare state. It has to be seen as

a national imperative and as an inalienable right to be exercised by the people as and

when they require it”5.

“…we have to ensure inclusive and equitable growth, we need to knit and integrate our rural areas…. We cannot allow India to be divided into two distinct zones.” Dr. Manmohan Singh, Prime Minister, India6

1.1 BACKDROP TO MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE

ACT, 2005

Keeping this in view, the policy architect of ‘Inclusive Growth’ strategy of India

has enacted the ‘National Rural Employment Guarantee Act’, an unprecedented one in

the domain history of parliamentary system of Democracy in 2005. National Rural

Employment Guarantee Act (NREGA), 2005 was re-christened as Mahatma Gandhi

National Rural Employment Guarantee Act (MGNREGA) on 2nd October 2009. It

4 Singh, K (2008) , Rural Development Principles, Policies and Management, Sage Publication, New Delhi, 2008,

Chapter 10, pp 181-200. 5 Shah M (2005), ‘ Employment guarantee –MPs lead the way’, The Hindu, 10 August 6 66th Republic Day speech delivered by the Hon’ble Prime Minister, New Delhi, 2006.

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bestowed all the wage-seeking families of rural India with an opportunity to sell their

100 days of labour to the State at minimum wage. Apart from work guarantee at

minimum wage, the unique feature of the programme includes a ban on contractors, as

also a restriction on the use of labour displacing machines.

The MGNREGA ranks first among the most powerful initiatives ever undertaken

for transformation of rural livelihood in India. The MGNREGA provides basis for

permanent social security system and even act as an instrument for planned and

equitable rural development (Roy and Dev 2005)7. It also focuses on raising the

productivity of agriculture by creating durable assets. The MGNREGA is an initiative

comparable to the green revolution and it is also a complex one (Mathur 2007)8. To

ensure rights and entitlements of workers under MGNREGA, an exclusive National Rural

Employment Guarantee Fund has been set up for implementation of the programme. To

meet the requirements of the Act, the plan has been modified as a Mahatma Gandhi

National Rural Employment Guarantee Scheme (MGNREGS). The Act has systematic

approaches for identification and execution of works and payment of wages. It also has

the provision for transparency and accountability of implementing agencies. The direct

outcome of this provision is conduct of social audits by the Gram Sabhas (GSs) which

have been mandated not only by Right to Information (RTI) Act but also the MGNREGS

itself. The Panchayati Raj Institutions (PRIs) have been authorized for overall

implementation and monitoring of the MGNREGS in their jurisdiction. The Act and

guidelines gave a significant role to rural community to play in planning and monitoring

of the schemes, rather a unique feature of the Act. The works that are being taken up

under this Act can rejuvenate the natural resource base and address the causes of

chronic poverty.

7 Roy, A and N Dey (2005), “Guaranteeing action for employment”, The Hindu, August 15, 2005. 8 Mathur, L (2007), “Employment Guarantee: Progress So Far”, Economic and Political Weekly, Vol. 42, No.52, December 20, 2007, pp 17-20.

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1.2 RATIONALE TO TAKE UP THE RESEARCH STUDY ON ‘’AN IMPACT ASSESSMENT OF

MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME: A

STUDY OF ANDHRA PRADESH

The MGNREGA is the first ever law known in the history to guarantee wage

employment at an unprecedented scale. It is needless to say that the success of

programme largely depends on the implementation process. In addition to this, its

success depends on the awareness of workers and their active participation in the

process of implementation and monitoring. The radical provisions of NREGA are

signaling for inauguration of new strategic chapter of poverty eradication. The financial

allocations for schemes can vary from year to year. If the necessity for it declines over

time, as it should if implemented properly in the right direction, the allocations can be

reduced (Shah M 2009)9. The budgetary outlay enhanced from Rs.12,000 crore to

Rs.41,000 crore over five years. There is a concomitant disincentive for not providing

employment as the states then bear the double indemnity of unemployment and the

cost of unemployment allowance (MoRD 2008).10 The number of employed households

gradually amplified from 2.11 crore during 2006-07 to 5.51 crore in 2010-11 at national

level. The growth in the number of works executed under MGNREGA is significant

(national website)11. The framework for MGNREGA clearly indicated that the whole

MGNREGS governance process is a participatory one.

In about in five years of implementation of MGNREGA several noteworthy trends

have been evident from the increase in employment opportunities compared with

earlier wage employment programmes, increase in minimum wages, stemming of

distress migration, and implementation of large number of works related to soil and

water conservation, resulting in increased productivity in many states. The Planning

Commission’s evaluation report also indicated that marginal and low-income groups

9 Shah, M (2009), “Multiplier Accelerator Synergy in NREGA”, The Hindu, April 30, 2009. 10 MoRD (2008b), “The National Rural Employment Guarantee Act 2005, Operational Guidelines 2008,” Ministry of Rural Development, Government of India, New Delhi, p-2. 11 www.nrega.nic.in

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(before the Act from 33% and 22% respectively) have moved to higher income group (to

44% and 26.3% after the Act)12.

Of the total budgetary outlay, Andhra Pradesh alone spent about Rs.16000 crore

during last five years and more than 122 crore person- days of employment have been

provided to rural workforce. The official websites claim that the greatest achievement

is increase in daily the minimum wage paid to worker from Rs.80 to Rs.100. The state

government says that it has opted for only labour intensive works and it is successfully

kept away the contractors and machines in execution of works. Due to its successful

implementation MGNREGS, it could curtail the migration from rural to urban areas.

While reviewing literature, it has been found that some authors indicated that there is

no difference between MGNREGS and other earlier wage employment programmes and

others affirmed that many poor have been uplifted from Below Poverty Line (BPL) status

to Above Poverty Line (APL) status after MGNREGS implementation. Ramachandrudu

and Apparao (2011)13 in their study indicated that about 92 per cent of workers have

stopped migrating to urban areas due to availability of work in their villages in Andhra

Pradesh. The success in Andhra Pradesh is mainly due to the adoption of special

initiatives under MGNREGS-AP14. Some of these initiatives are:

Development and deployment of Rashtra Grameena Abhivruddhi Samacharam

(RAGAS) software

Operationalisation of electronic Fund Management System (eFMS)

Worker friendly Rural Standard Schedule of Rates (RSSRs)

Declaration of five (5) other line departments as Implementing agencies

Formation of Labour Groups or Shrama Sakthi Sanghalu (SSS)

Farmer Centric mode of planning

12 Planning Commission (2008), “All India Report on Evaluation of NREGA: A survey of twenty districts”, Institute of

Applied Manpower Research, Planning Commission, Government of India, New Delhi, 2008, p 16. 13 Ramachandrudu, G and Ch Appa Rao (2011), “A study on the impact of Mahatma Gandhi National Rural Employment Guarantee Scheme on Rural Livelihoods in Vizianagaram district”, Dept. of Economics, Andhra University, Visakhapatnam, Government of Andhra Pradesh, January, p 137. 14 Various Government Orders and Circulars issued by the Dept. of Rural Development, Government of Andhra Pradesh.

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Issue of wage slips in local language with all details

Society for Social Audit, Accountability and Transparency (SSAAT) formed by

eminent persons as Board Directors

During the last five years of its implementation, many studies have been

conducted by various organisations as well as by individual scholars focusing upon

implementation issues with specific reference to employment generation. At this

juncture, it is important to understand that to what extent the MGNREGS has made its

impact (after five years of implementation) on lives of the rural poor with reference to

changing household income, and expenditure pattern, usefulness of assets created

under MGNREGS and inclusiveness of the rural poor in overall development process.

Besides these, this research study also examines the impact of MGNREGS employment

on migration pattern of the rural community.

This research study also verifies whether MGNREGS works could revitalize the

stagnant agriculture sector in the state by execution of works that enhance the natural

resource base. It is imperative to study and document the effectiveness of some of the

initiatives viz., role of RAGAS, eFMS, staffing pattern and their capabilities, efficacy of

social audits and Flying Squads etc., at this stage. Further, how the entitlements of

workers have been protected by ensuring minimum wage, worksite facilities etc., need

to be validated. All findings will be useful for better implementation of MGNREGS in the

state.

1.3 OBJECTIVES OF THE RESEARCH STUDY

To critically examine the implementation process of MGNREGS-AP as a rights

based participatory development intervention

To assess the institutional strengths and weaknesses at different levels of

implementation including transparency and monitoring mechanism as well as

special initiatives for strengthening of programme implementation

To examine the impact of MGNREGS interventions and its outcomes on

- Household incomes and consumption (food and non food items)

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- Inclusiveness of poverty classes

- Development of Natural Resources (including agriculture)

- Reduction in rural–urban distress migration

- Access to credit, land and labour markets with improved bargaining

capacity

- Human Resources (education and health) development of workers.

1.4 HYPOTHESES

The benefits from MGNREGS (wage earnings) are positively related with

awareness scores.

The benefits from MGNREGS (wage earnings) are positively related with

participation (in the process of the scheme) level.

Availability of local employment opportunities reduced the rural-urban (push)

migration.

Transparency and accountability measures of MGNREGS empower the (poor)

workers.

1.5 STUDY AREA

The research study mainly focuses on three MGNREGS Phase-I districts in Andhra

Pradesh where different degrees of performance have been noticed. The study has

covered 9 villages in nine mandals of these three districts.

1.6 SAMPLING DESIGN

The study adopted Multi stage - stratified - random sampling design. In the First

stage, three districts were singled out from the 13 phase-I districts based on their

performance. The base year for performance assessment is 2009-10. District wise

consolidated data on various parameters downloaded from the website

www.nrega.ap.gov.in for the year 2009-10. For each selected indicator, performance

score was given based on the weightage as indicated below:

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Average days of employment provided to each participating household – 25 per

cent weightage.

Average days of employment provided to Scheduled Caste (SC) and Scheduled

Tribe (ST) households – 15 per cent weightage.

Percentage of works completed out of total works taken up for execution – 10 per

cent weightage.

Percentage of participating households those completed 100 days of employment –

10 per cent weightage.

Percentage of job card holding household participation in MGNREGS work – 20 per

cent weightage.

Percentage of MGNREGS workers who received timely wages – 20 per cent weightage.

Table 1.1: Distribution of 13 phase-I districts according to their performance

Sl. No

Category Name of the districts

1 High Performance Vizianagaram ( 83.4 % -1), Adilabad (78.9% -2), Chittoor (77.4% -3), and Ranga Reddy (75.1%- 4)

2 Average performance

Nizamabad (73.8% -5), Kadapa (72.3% - 6), Karimnagar (72.1%- 7), Medak (70.2% -8) and Khammam (68.9% -9)

3 Low performance Anantapur (67.8% - 10), Nalgonda (66.3% -11), Mahabubnagar (60.3% -12) and Warangal (59.3% -13)

Note: Figures in parentheses are the overall scores and ranks of the districts

Thus, all 13 phase-I districts were given indicator wise scores and then based on

overall score, ranking was given to each district. Later all 13 districts were grouped into

three categories viz., High Performing Districts, Average Performing Districts and Low

Performing Districts (Table 1.1). While selecting the districts, care has been taken that

three selected districts viz., Vizianagaram, Nizamabad and Anantapur represent the

three different regions of Andhra Pradesh viz., Coastal Andhra, Rayalaseema and

Telangana.

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Table 1.2: Distribution of selected mandals according to performance

Sl. No

Name of the district

Name of the Mandal

Performance category

Performance score (%)

1 Anantapur

Kalyanadurgam High 62.94( 62.94% - 2)

Yadiki Average 49.66 (49.66% -22)

Gooty Low 45.55 (45.55% -46)

2 Nizamabad

Kammarapalle High 81.68 (81.68% -1)

Armoor Average 56.52 (56.52% -16)

Ranjel Low 39.18 (39.18% -30)

3 Vizianagaram

Gantyada High 66.95 (64.95% -2)

Kurupam Average 46.66 (46.66% -17)

Mentada Low 39.33 (39.33% -29) Figures in parentheses are the overall scores and ranks of the selected mandals

In the Second Stage, mandals were selected based on their performance.

Performance scores were given as in the case of districts and were ranked and grouped

into High, Average and Low performing mandals. One mandal from each category was

selected randomly for the purpose of study. Thus, in all, 9 mandals were selected for

this study. The details of selected mandals are presented in Table 1.2.

In the Third Stage, Gram Panchayats (GPs) were selected. As the number GPs in

the selected mandals are many, one GP from each mandal was randomly selected for the

purpose of study. Thus, in all, 9 GPs were taken from three sample districts viz.,

Utakallu, Chapiri, Rayalacheruvu (Anantapur), Rampur, Tadbilloli, Choutapalle

(Nizamabad), P.Levidi, Regubilli and Pedachamalapalli (Vizianagaram).

In the Fourth stage, the selection of households was made. In each selected

village, the households were selected on the basis of their participation in MGNREGS

work. The households that have participated for about 3 to 5 years were selected to

assess the impact of MGNREGA. The list of participating households was downloaded

from the website and then the households which have participated for more than 2

years were selected randomly. While selecting these households, care has been taken to

cover all habitations of selected GP. Further, if there is more than one worker in the

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sample household, then s/he has been eliminated such that each sample worker

represents one household from whom the information has been elicited.

1.7 METHODOLOGY

The study mainly focuses on impact of MGNREGS on livelihood of rural

households, status migration and agriculture and access to the credit and other services

by the sample households, institutional capacities for implementation and monitoring of

the programmes in the three sample districts of Andhra Pradesh. The study made use of

secondary as well as primary data. The details are presented in the data analysis plan.

1.7.1 Review of secondary data: Initially, many of articles and research studies on

MGNREGA were reviewed to distil the lessons. This review of literature has helped in

getting familiarity with the processes and challenges in implementation of MGNREGA.

Information related to MGNREG Act, guidelines, circulars and office orders were

collected from national and state websites to understand the process of

implementation, institutional structure prescribed, amendments made to the Act and

Scheme.

The secondary data on various aspects viz., physical and financial performance,

information related to works were collected from national website www.nrega.nic.in

(national information) and state website www.nrega.ap.gov.in (state information) and

the performance scores were calculated. Based on their performance, the districts, the

mandals and the GPs were selected for the purpose of the study.

The secondary data and reports related to MGNREGA works were collected from

the state official website to finalise the works / schemes to be inspected to assess their

usefulness to community and individual farmers. After the selection of villages for the

study, the Project Directors were consulted to share the observations from web related

information and finalised the field visits for the purpose of surveys.

The primary data has been collected through

Survey of sample worker households by structured interview schedules

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Focused Group Discussions (FDGs) with the workers and mates

Worksite visits

Semi-structured interviews with officials at the four levels

Review of district records

Review of available reports, articles and studies on the area being studied.

These data tools were developed and tested in Balanagar GP of Balanagar Mandal of

Mahabubnagar district and revised based on the feedback.

1.7.2 Surveys and Data Collection from the primary stakeholders: A structured

interview schedule was developed and canvassed to one of the workers of the selected

households to elicit information related to a particular household.

Details of worker household schedule: The survey schedule consists of questions to

extract the information regarding the socio-economic profile of the sample households

before and after MGNREGS implementation; Awareness of sample respondents about

MGNREGS and their participation in Gram Sabhas (GSs) organised for the purpose of

selection of works and social audits; details of employment sought by that household

and accessed along with income gains; changing pattern of income- expenditure;

Changing pattern of migration in the household, if any; various works in which the

respondents have participated and their perception with regard to quality, durability

and usefulness to community; extent of land brought into cultivation by the sample

households due to creation of assets and increased cost of cultivation; improved access

to credit from formal financial institutions; and impact on savings etc. Further, for

working out delays in wage payment a track sheet has been utilised to trace the time

taken for payment of wages after closing of muster roll.

1.7.3 Focused Group Discussions: In addition to household survey schedule, information

was gathered from the PRI representatives, worker groups about the process of

selection and execution of works, effectiveness of innovative approaches, major

changes in implementation, usefulness of assets created under the Scheme and their

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perception on MGNREGS. This helped in the assessment of the effectiveness of

implementation of MGNREGS as rights based approach and the strengths and

weaknesses of institutional arrangements.

1.7.4 Worksite visits: Based on the secondary data on works, from each village one or

two works that were executed in a financial year were selected. Thus in each GP 5-6

works and in total about 55 works were selected randomly and were inspected to assess

the status of existence, completion, usefulness and impact on household-centric

agriculture. The information has been collected systematically and analysed.

1.7.5 Discussions with the Director, MGNREGS-AP and other staff were carried to have

better understanding of institutional arrangements made and process of monitoring of

the programme. To assess the impact of transparency and accountability mechanism

adopted in the state, information regarding the RAGAS software was elicited through

discussions with MGNREGS staff and with Tata Consultancy Services (TCS) personnel.

These discussions also helped to elicit information on functioning of Flying Squad, QCC,

Rural Development Call Centre, formation of SSS and so on.

1.7.6 Discussion with the Director, SSAAT was held to get greater insights into the

process of social audits and the impact in curtailing leakages and misappropriation of

funds. The data on to the findings of social audits, actions taken by the state

government against the erring officials were collected from Social Audit Directorate to

assess the performance of SSAAT. The field observation on social audit and perceptions

of the stakeholders were used to assess the overall impact of social audit on the

performance of MGNREGS.

1.7.7 Structured discussions with the officials of DWMA and Line Departments and PRI

members were carried out to assess adequacy of the institutional arrangements made

for implementation of the Scheme, effectiveness of eFMS and eMMS etc. Based on

discussions and secondary data, the effectiveness of these innovations was ascertained.

During these discussions, the perceptions, experiences of implementers as well as

challenges in implementation were also captured.

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1.8 DATA ANALYSIS PLAN

To examine the specific objectives constructed for the study and also to test the

hypotheses, the following methodology has been adopted.

Since the programme performance depends on socio-economic conditions of the

regions, three different study regions are selected to capture the effect of levels of

development on the performance as well as the outcomes and impact of the scheme.

The three districts viz., Anantapur, Nizamabad and Vizianagaram broadly represents

three regions with different levels of irrigation sources and also different socio-cultural

environments. For instance, Vizianagaram is a rainfed tribal area while Anantapur is a

desert prone area with predominance of Other Backward Caste (OBC) and Other Caste

(OC) groups. On the other hand Nizamabad is an irrigated tribal zone.

To examine the effectiveness of implementation process of MGNREGS as rights

based intervention, the levels of awareness of the sample households in the above

environments were assessed. Number indicators of awareness in regard to rights and

Entitlements under MGNREGS were used and information was collected to workout

awareness scores. However, data were elicited on participation of sample households in

the planning (identification of works), pre- implementation process (registration for job

cards, submission of application for work), management of works including monitoring

(as members of Vigilance and Monitoring Committee) and evaluation (participation in

Social Audits). The scores on various indicators were used to capture the quality of

implementation process and promotion of people’s participation in the programme

planning and management. These results would help to assess the effectiveness of

implementation from the rights perspective and to examine the community

participation in development programmes like MGNREGS.

The strengths and weaknesses of MGNREGS institutional apparatus at various

levels of implementation were captured in two ways. The existing structure was

compared with proposed institutional structure as per the guidelines of the state. The

administrative expenditure was also taken into consideration as an indicator for

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assessing capacity of staff to plan and implement this demand-driven programme in a

participatory way. The implementing agencies and their ability, efficiency and the

capacity development initiatives for equipping themselves with requisite skills and

knowledge were also taken into account while assessing the strengths and weaknesses

of institutional systems.

The efficiency and effectiveness of various innovative measures for

strengthening programme effectiveness were assessed based on the reactions and

perceptions of stakeholders. The utility of Information Technology (IT) enabled

Monitoring Information System (MIS) developed by the state for tracking expenditure,

works and workers were examined. Further, the access to MIS by various stakeholders

and also use of such data in Social Audit Gram Sabhas were analysed to gauge the

extent of transparency built into the system. How MIS system helps the management in

reducing the delays in wage payment was examined by using a wage payment track

sheet. This particular tool was used to quantify the average delay in wage payment and

also the delays occurring in various stages of wage payment process.

The discussions held at various levels (with the functionaries of SSAAT at state

level, Project Director (PD), DWMA at district level, Programme Officers (POs) at mandal

level and workers and other stakeholders at GP level) to document the developments in

the design and utility of Social Audit (SA) mechanisms. The achievements of SA

mechanism were analysed for judging the effectiveness of social audit. The people’s

reactions in terms of improvement in the programme performance on account of SA

were also taken into account while analysing the strengths and weakness of SSAAT.

The FGDs with different stakeholders were organised in the sample GPs to

obtain the people’s assessment of the efficacy of institutional arrangements. The role of

Self-Help Groups (SHGs) in mobilising the worker community and in facilitating their

participation was also reviewed.

As part of impact analysis, the outcomes and effects of MGNREGS on various

parameters were examined. The number of days of wage employment (levels and

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trends), wage earnings from MGNREGS and share of MGNREGS in total household

incomes were examined to capture the outcomes of the scheme. The profiles of

participating households were developed to find out the share of different social and

occupational groups; these indicators were used to assess the extent of inclusiveness of

marginalised groups. The share of MGNREGS employment of these socially and

economically deprived groups was also taken into account to examine the access of

these groups to development projects like MGNREGS to find out the biases of delivery

system in-terms of providing greater access to employment and wage earnings. Using

the household income with and without MGNREGS, the contribution of MGNREGS to

the household economic status was analysed through Changes in Household Income

Matrix (CHIM)15. The transition of sample households from different categories

(Destitute, Very Very Poor, Very Poor, Poor and Non-Poor) to other categories was

examined based on household per-capita income prior to MGNREGA (2005-06) and

after introduction of MGNREGS (2009-10). The household per-capita income measured

at 2005-06 prices and the chances of the crossing the poverty line for various income

category households with the support of interventions like MGNREGS were worked out.

The exercises in various districts would provide insights into the development process

and response of various social groups to the development opportunities besides

assessing the effect of programme (incidence and intensity) on poverty.

Since most of the MGNREGS workers were poor, the impact of MGNREGS on

levels of living in-terms of consumption expenditure was also analysed. The households

reporting increased expenditure on various items and quantum of expenditure on food

and non-food items were collected. These data were used to assess the contribution of

scheme to Human Resource Development (HRD) as well as food security.

The MGNREGS permits specified activities to be taken up for strengthening

natural resource base of the region and providing better rural connectivity. The impact

on agriculture due to development of natural resources through MGNREGS works was

15 This analytical tool was developed by Dr. Rangacharyulu, S.V, Former Director, NIRD, Hyderabad.

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studied. The changes in the land use, cropping pattern, crop intensity, and productivity

of crops were taken into account while ascertaining the impact of the community as

well as individual works on agriculture with special reference to small and marginal

holdings.

Since distress migration is prevalent in the most of rainfed areas the contribution

of MGNREGS in reduction of rural-urban migration was reviewed with the help of

structured questionnaire and FGDs. The incidence and intensity of distress migration

was estimated adopting pre- and post- evaluation design.

Further, the progress made under financial inclusion through MGNREGS in the

study area was analysed with the help of simple parameters and also an attempt was

made to assess the benefits of Financial Inclusion to the poverty groups.

Hundred days of guaranteed employment at minimum wage was expected to

improve the livelihood security and one would expect changes in functioning of credit,

land and labour markets in view of the enhanced income levels of the workers. The

study examined whether the sample households could access formal and informal

financial institutions in a better way in terms of accessing more loans, liberalised terms

and conditions of lending etc. Percentage of landless workers and also small and

marginal farmers who have taken land on lease on account of their participation in

MGNREGS was worked out to measure the impact of MGNREGS on land market.

Since, MGNREGS is essentially an intervention in labour market with gender

sensitivity and at minimum notified wages. A number of indicators were used to capture

various changes taking place in labour markets after the introduction of MGNREGS. A

Fact sheet was developed to determine major outcomes of the programme on various

socio-economic conditions of sample households and labour markets. A fact sheet was

developed based on major outcomes of the programme on various socio-economic

conditions of sample households and labour markets.

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1.8.1 Hypothesis testing

Hypothesis 1: The benefits (wage earnings) from MGNREGS are positively associated with awareness

The above hypothesis has been tested using simple regression coefficients. The

regression coefficients were worked out for awareness and benefits gained from

MGNREGS and significance was tested at 95 per cent of confidence.

Hypothesis 2: The benefits from MGNREGS (wage earnings) are positively associated

to the participation (in the process of the scheme) level

The above hypothesis was tested using a liner regression model is used with

participation score as explanatory variable. The regression coefficients were worked

out for participation and benefits gained from MGNREGS and significance was tested at

95 per cent of confidence.

Hypothesis 3: Availability of local employment opportunities reduced the rural-urban

(push) migration

Information was collected on number of households migrating and duration of

their migration before and after MGNREGS. Simple percentages of migrating households

as well as duration of migration were used to estimate the reduction in migration. The

percentage of reduction in migration was verified with the availability of employment

under MGNREGS.

Hypothesis 4: Transparency and accountability measures of MGNREGS empower the

(poor) workers.

The effectiveness of transparency and accountability initiatives towards

empowerment of community was tested by collecting views of various stakeholders and

secondary data; and also by analysing strengths and weaknesses of each initiative.

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Fig 1.1: ANALYTICAL FRAMEWORK FOR IMPACT ASSESSMENT OF MGNREGS

Legend: LIs: Local Institutions; CBOs: Community Based Organisations; NGOs: Non-Governmental Organisations; IT: Information Technology; FIs: Financial

Institutions; CB: Capacity Building; PRIs: Panchayat Raj Institutions; SEP: Socio Economic Profile; GR mechanisms: Grievance Redressal Mechanisms

Reduced Fallows

Increased

productivity of

land, water and

forest resources

Well connected

rural India

Economic

Reduction in poverty

Improved consumption

level

Procurement household

articles & productive

assets

Investment in production

Access to land and credit

Improved agricultural

productivity

Food Security

Adoption and

Mitigation of

climate change

Rural infrastructure

development

Transparent &

Democratic local

governance

Inclusion of poor in

decision making

process

Critical space for

innovations

Social

Reduction in distress

migration

Reduction in Social &

Economic disparities

Improved bargaining

capacity of poor

Emergence of Organised

labour and development

of social capital

Empowered community

Participation of

poor in process

Capable

administration

Strengthened

PRIs

Suitable plans

Augmentation

of resources

Uninterrupted

fund flow

Additional wage

income

Minimum and

equal wages

Productive &

useful assets

Information

to workers

CB of

personnel

Well

developed

systems

Role of

Implementing

agencies and

capacities

Role CBOs/NGOs

Mode of

Information

dissemination

Availability

Funds

Auditing systems

Role of FIs

Role of IT

Monitoring &

GR Mechanisms

SEP of the

workers

Inputs Process Output Outcomes Effects Impacts

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1.9 ANALYTICAL FRAMEWORK

Having discussed various issues and variables that play a vital role in

implementation of MGNREGS and its spin-off effects, along with the implementation

and facilitating issues, the analytical framework of the study is shown in figure-1.

MGNREGA is rights based Act which aims to strengthen the livelihood base in rural areas

on sustainable basis

Legal frame of the Act provides adequate budgetary support for its

implementation. It is the responsibility of a state to implement the Act in its true spirit.

The Figure-I succinctly summarises the basic things that a state should take care to

ensure the provisions of the Act and thereby reach the goals. The first and foremost of

these is the establishment of proper institutional system(s) with competent technical

non-technical personnel to support the implementation of scheme. Subsequently, it

should provide proper guidelines and fix the roles and responsibilities to each

implementing agency. Further, a well defined information dissemination system, proper

Information Education Communication (IEC) tools and capacity building of all

stakeholders need to be carried well in advance as MGNREG is time bound process. Use

of IT reduces the interference of human beings and saves time and money in the entire

process of programme implementation which needs to be promoted by the state. To

ensure timely payment of wages through savings bank accounts, a strong network of

Financial Institutions should be roped into the process. Well defined monitoring and

auditing systems should be ensured to curtail the leakages and lapses of programme

funds.

The rural workforce with low socio-economic profile should be well informed

and acquainted with process to demand their rights and entitlements. The capacities of

PRI is a major challenges which need to built for preparation appropriate labour budget,

proper conduct of Gram Sabhas (GS) for the sake of identification of works that are

useful and beneficial to community. Each GP should act as a mini-secretariat, with a

strong contingent of trained staff to perform the tasks. The capacities of administration

should be built in such a way to protect and enforce the Act effectively. For the entire

20

process, six per cent fund allocated towards administrative cost can be utilized. The

requisite budget support shall be provided both by the central and state government in

the ratio of 90:10.

The immediate outcomes of above inputs are strong institutional setup with

professional staff and capable Panchayats with the realistic labour budget, proper shelf

of works (works with technical and administrative sanction) and well-informed worker

community. Due to creation of productive assets i.e. water conservation; drought

proofing and land development works, the productivity of natural resources will be

optimized over a period of time. To achieve these results, linear and vertical

coordination between implementing agencies and Panchayats is essential. The shelf of

works should be adequate to meet the demand for work. Sufficient funds without any

interruption should be available with implementing agencies.

Once the implementation structures are well framed and institutionalized, the

state should draw the attention to monitor the programme. Use of IT will enable the

state and district level implementing agencies to monitor the programme effectively on

regular basis. The heightened sense of public vigilance will enhance the democratic

accountability. The monitoring and auditing of the programme by local public through

Vigilance and Monitoring Committees (VMCs), Social Audits will minimize the frauds and

leakages of funds. In addition to monitoring, proper grievance redressal system at all

levels ensures effective implementation of the Act. However, many of the instructions

may not be carried out well on ground and hence meticulous implementation can be

done through Government Orders (GOs), Orders and Circulars from time to time based

on the requirements.

The timely generation of employment on a demand driven basis and payment of

wages within stipulated time should receive the priority to ensure the rights of the

workers. The additional wage income from additional employment may reduce the

poverty to some extent over a period of time. The extra wage earnings would be useful

for procurement of food grains, household articles, farm assets and other productive

assets. The approved list of works under MGNREGS might facilitate to convert fallow

21

lands into cultivable lands. One can observe the increased productivity of land, water

and forest if MGNREGA is implemented successfully. The far-off villages will be

connected with major villages and towns in order to facilitate flow of goods and services

and strengthen the rural-urban linkages. Most of the small and marginal farmers will

have incentives to invest on land which will increase the production of food grains and

reduction in distress. The improved quality of land would improve their bargaining

capacity. To this extent, the MGNREGS beneficiaries may approach the FIs to access

loans or credit to invest on land and allied activities. The workers’ capacity to negotiate

for higher wages due to assured employment will have impact on market wages in due

course of time. This process may help the poor to become empowered.

The above outcomes lead to the people’s empowerment and rural

reconstruction. The very success of MGNREGA in terms of creation of productive assets

and revitalization of agriculture would reduce the demand for MGNREGS employment.

The additional wage incomes so generated cause further rise in demand, which in turn

bring a stimulus to production and employment and this cycle goes on. The poor will

have food security due to continuous availability of employment at higher wage rates.

Natural resource base will be stabilized over a period of time. Governance reforms will

take place at local level and all that would make local people involve in the decision

making process so that innovative ideas will emerge. In any case for the success of

MGNREGS, the bureaucratic and political commitment is essential.

1.10 CHAPTERISATION

The dissertation is presented into eight chapters. The first chapter introduces in

brief the factors responsible for emergence of MGNREGA 2005. The need for the

research study along with objectives and hypotheses and research methodology

adopted to study the objectives, data analysis plan, framework adopted for impact

analysis are discussed in this chapter. Various research studies on different aspects of

MGNREGA have been reviewed and presented in Chapter II. The development goals of

India besides poverty and unemployment status in India and Andhra Pradesh (study

22

state), performance of various wage employment programmes, and rationale for

MGNREGA are discussed in Chapter III.

Chapter IV reviews the Performance of MGNREGS at macro level. The profile of

Andhra Pradesh and sample districts, performance of MGNREGS at state and national

level were analysed and presented. In addition to these, arrangements made by the

state for effective implementation, review, monitoring and grievance redressal

mechanisms such as development and deployment of RAGAS software, eFMS, and

functioning of SSAAT, are discussed. In Chapter V, the process adopted for fixation of

Schedule of Rates (SoRs); various strategies adopted in the planning process since

inception; various types of schemes or works executed in the state of Andhra Pradesh

along with their existence; and durability and usefulness of assets created are studied

and presented. Chapter VI elaborates the socio-economic profiles of sample workers or

worker households before and after MGNREGS implementation. Their level of

awareness and realisation of rights and entitlements under MGNREGS are examined

from primary data and results of analysis are presented. The impact of MGNREGS on

poverty and changes in income-expenditure pattern of sample households are also

analysed and included in this chapter. The impact of MGNREGS on agriculture,

household migration and education of children and literacy skills of workers are

appraised in Chapter VII.

To sum up, the developmental scenario of rural India and Constitutional

obligation prompted the Indian Parliament to undertake the public investment as a

Constitutional right and passed the National Rural Employment Guarantee Act in 2005.

Increased employment opportunities, increased minimum wages and arrest of distress

migration are certain trends that emerged within five years of MGNREGA

implementation. This research study critically examines the process of implementation,

institutional arrangements made and impact of the scheme on household incomes and

changing consumption pattern, development of natural resources through MGNREGS

works, changing pattern in rural–urban migration, status of credit worthiness of

23

participating households and human resource development due to increased incomes

and resources.

Following the multi-stage stratified random sampling design; nine GPs were

selected from nine mandals of three 1st phase MGNREGS districts and primary data

collected from 315 sample households. By using conventional and non-conventional

methods, primary data has been collected from these households and impact of the

scheme on rural poor was accessed by using both qualitative and quantitative

techniques. The programme impact was visualised by developing a framework of impact

of MGNREGA, which provided the direction to complete the study comprehensively.

*****