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IMPACT OF THE RIGHT TOWORK PROGRAMME
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Right to Work is an unenforceable right
Staggering financial implications
A brief timeline :
1970, Employment Guarantee Act,Govt. of Maharashtra
1978, IRDP
2001, SGRY
2005,MGNREGA
1
2
3
4
INTRODUCTION
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Providing wage employment opportunities andboost rural incomeCreating sustainable rural livelihoods through
regeneration of the natural resource base i.e.augmenting productivity and supporting creation ofdurable assets Strengthening rural governance through
decentralisation and processes of transparency andaccountabilityReduce population pressure in urban areas throughmigration
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Ministryof Rural
Development nodal
ministry
Implementingagencies line dept. & state
agencies
Intermediate & district panchayats
Main agency: Gram Panchayat
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GoI : 100% wage cost for unskilled labour75% of material cost
State Govt. : 25% of material cost100% of unemployment allowance
Programme officer & DistrictProgramme coordinator
Fundsreleasedto bank
& PO A/C
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This Spiral and the demand stimulating process iscalled the Multiplier effect. The value of the Multiplierdepends on the marginal propensity to consume of
benefitting from this scheme. The mpc is our extraspending out of the additional rupee we earn.
Higher the mpc, greater will be the stimulus todemand. One advantage of the NREGA scheme is thatit is handing out money to the rural workers who havethe highest mpc. People who are on the margins ofexistence are more likely to spend than save most ofwhat they earn.
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Rising incomes also improve capacity utilization and happier expectations act as incentives for moreinvestment.This positive impact of growing economy on private fixed investment is known as the Accelerator
Principle in macro economic theory.
Thus along with public investment it would also lead to a surge in private investment and gives a chance tothese workers to return to fulltime farmingThere are examples of such behavior by the farmers in the Tribal
belt of Central India. Te construction of dams on the common land helped recharge the wells of the poorfarmers who worked as laborers. The additional income and public investment incentivized them to make
private fixed investment.
Millions of small and marginal farmers are in fact owners of small pieces of agricultural land who are forced towork under NREGA because the productivity of their land is not enough to make their ends meet.Theadditional income which these worker get under NREGA scheme, can be used by them to increase the
productivity of their land by increasing their investment in goods such as better farming technology, seeds,pesticides, storage.
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Benefits andsuccess
55-62%
employmentfor SC/ST
households
Opening bank
and postoffice
accounts
Creation ofsustainable
assets
Income &livelihoodsecurity
Agriculturalproductivity
Womenempowerment
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Household income - 1,064 ruralhouseholds across Medak district ofAndhra Pradesh, around 12 percent ofthe households indicated that theirhousehold income had increased asmore members of the same householdwere being able to work
Monthly per capita
expenditure(MPCE) 2500 householdssurveyed in Andhra Pradesh.Participation in MGNREGA had asignificant and positive impact onconsumption expenditure, intake ofenergy and protein and asset
accumulation
Net benefits from the Scheme also takeinto account, availability of alternateemployment opportunities(AEO) andopportunity cost of time as important
parameters
1. Income and Livelihood Security
Fact : Rs 1,10,700 crore (66 % of the totalexpenditure of around Rs 1,66,000 crore)as worker wages from FY 2006 up to FY
201112
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Wages of female casual workers increased by 8%Wages of male casual workers increased by 1%
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National participation rate of 47 per cent, evidence suggests that women areparticipating in the Scheme more actively than in other works, surpassing
the minimum requirement of 33%
Has reduced traditional gender wage discrimination, particularly in thepublic works sector- Rs90.9 per day for men, and for women it was Rs 87 perday. The wage difference was larger for labour in other public works; Rs 98.3
per day for men and Rs 86.1 per day for women
Economic Independence
2. Gender and SocialEmpowerment
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Green line represents the 33% women participation mandated by the Act
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Return on Investment for MGNREGA assets more than 100% Has faced criticism on the quality and sustainability of the assets created
under it
To assess quality, durability and utility
RoI/cost recovery :Assessed 143 bestperforming MGNREGA
water related assets andfound that RoI estimatesare positive in the case of amajority of assets. Out of143 assets,117 assets had aRoI of over 100 per cent in
the first year
Beneficiary perception-based surveys : Out of allthe MGNREGA assetsbeing used, 83 per cent inRajasthan, 80 per cent inMadhya Pradesh and 67per cent in AndhraPradesh, wereconsidered to be of good
or very good quality
Quality and soundnessof technical design: InMadhya Pradesh, in an
evaluation of 100 dugwells, across fivedistricts, irrigationstructures were foundto have a low failurerate of 5 per cent
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Misconception : Agriculture labour shortage causedentirely by MGNREGA.Fact : 70 per cent of the works in the Scheme havebeen generated during the agriculture lean season
Also, impact on labor market varies from place toplaceFour distinct situations of MGNREGAs (demand,supply and market wages) interaction with the labourmarket
Insignificant ImpactMisfitSignificantPotentially significant
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Led to an increase in bargaining powers ofthe laborers.
Seasonal scheduling of MNREGA Activities non agricultural peak seasons
Reduce distress migration as compared tomigration taken up for economic growth andother reasons
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Income records for villages Gambhirpur,Abhapur & BandhanaRegression analysis run to test the impact of
yearly NREGA income and yearly secondaryincome to total yearly income (dependentvariable)
Results of regression analysisy = 4339.889 + 1.415 1 + 0.686 2
R Square Adjusted R Square
0.88 0.86
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NREGA wage income increases the totalyearly income by Rs. 1.415
Secondary wage income increases the totalyearly income by Rs. 0.686R square value of 0.88 means that NREGAand secondary jobs alone contribute 88% ofyearly income earned by sample population
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Low awareness about
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Awareness
Low awareness about Unemployment allowance Work on demand Grievance redressal mechanism
Planning
Infrequent GSsLow participation in GSs for selection and prioritization of workWork selection not done according to set priorities or demand of the GSWork proportion undertaken by GP less than 50% of total cost of scheme in the district
DemandFor Work
AndUnemploy
ment
TheReasons for higher rationing:Larger proportion of existing demandLow institutional capacity to administer schemeLow awareness and empowerment levelsWeak PRIs
xtTimely AndFull
PaymentOf Wages
Wage payments often less than notified wageDelay in payments past 15 day limit huge disincentive
Continued cash payments due to poor bank and post office coverage (mandatory touse the same for wage transfer apart from cash)
LeakagesAnd
Misappropriations
Muster rolls filling and maintenance discrepanciesLarge leakages in Odisha, Jharkhand, ChhattisgarhNo irregularities in AP, HP, less in RajasthanUse of contractors and machinery which is prohibitedPayments to fictitious/ghost workers
Transparency And
Accountability
Proactive disclosure and social audits performed irregularly Karnataka, MP, RajasthanAP innovative steps for institutionalizing accountability tools into the governance systemIneffective grievance redressal
Accuracy Of
MIS
Concerns regarding accuracy of Management Information System (MIS) and Monthly
Progress Report Data
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Systems workingin the field
Delivery ofentitlements
Good officers incharge
High politicalcommitment
Andhra Pradesh Good quality lower level field staff
Use of mandalsInstitutionalized social audit processthrough autonomous state unit
Good Management InformationSystem (MIS) designed by TCS
Rajasthan Considerable experience of draughtrelief programmes
Pioneered concept and use of RTI andsocial audit through Mazdoor KisanShakti Sangathan (MKSS)
Leading state of work provided;womens employment; number offamilies completing 100 days
2nd generation problems -maintaining pipeline of suitable works;
work quality by enhancingconvergence with other departments
Best managed NREGA programmes
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Low politicalcommitment to theprogramme
Weaker systemsSignificant leakages upto
one-third to half of thestipulated wages
Orissa Leakages Attributedto state Government.No dedicated POs butgive additional chargeto BDOs
Ahead of most statesin conducting monthly
reporting MIS
Jharkand Poor no system ofelected panchayats
Beneficiary committeesthat tend to get hijackedby contractors
Regular staff reluctant to
hand over responsibilitiesto newly hired workers
SOR yet to be finalized
UP Employment picking upafter introducingminimum Rs.100 wage
Women participationremains low- 14%
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Improvethe
ecological
balance
Strengthen the positivesynergy between
MGNREGA and agriculture and alliedrural livelihoods
Respond to the demands of the States for greaterlocation-specific lexibilityin permissible works
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Recommendations
Effectiveplanning - StrictTime schedule
Ensuring theDemand-based
Character Greater role forcivil societyorganizations
Better social audits Transparency andaccountability
Limitations onadministrative
expensesEqual
Opportunity forvulnerable groups
StrengtheningMIS
Reducingdelays in wage
payments
Deployment ofHuman
resources
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