The Planning Commission has recently put out the results of an evaluation conducted by it on the National Rural Employment Guarantee Scheme (NREGS), after a survey of 20 districts. This is the most comprehensive official evaluation so far, and it makes interesting reading, not just in terms of the performance of the scheme, but also for some larger conclusions that we can draw.
Under this programme, 44.94 million people registered for employment in 2008-09, against 33.89 million in 2007-08. The scheme provides only one job per household at present, and if we take the size of the household as at least four, then nearly 180 million people depended on this scheme for their wage employment last year. If we also note that this is primarily for unskilled wage labourers and not yet for people with land, we can visualize the extent of poverty and distress in the rural areas, even in a normal year. This year’s drought is likely to increase the numbers by at least 25%. This is a rural programme and does not address urban poverty. It is quite a sad commentary on the levels of total poverty in the country. The report also indicates that this search for employment is a clear distress signal:
“Contrary to the general perception of better wages upon migration, 70% of the beneficiaries revealed that the migration is only for just wages and not for any better wages. This implies that there is a distress migration for just minimum wages to eke out the livelihood and for survival rather than for better wages. Notable among the responses is that 82% and 67% of the households interviewed in the eastern and northern regions, respectively, expressed that the out-migration is in search of work and meagre wages rather than for better earnings, which can be viewed as a distress migration. They preferred to stay in their native village if there is enough wage employment available locally.”
That this scheme is serving an important need of providing wages and livelihoods where none were available earlier is now clear and evident. There are, of course, other real benefits. “Due to the income generation through this scheme, the numbers of beneficiaries at the low-earning level are reduced to nearly half in size resulting this on the rise of households with marginally higher income. It was found that more than half of the beneficiaries are agricultural and unskilled workers. There is also (a) shift in the beneficiaries’ expenditure pattern on food and non-food items. The survey revealed that the number of families spending less on food has come down drastically whereas there is a rise of families who are spending more on food and non-food items.”
The beneficiaries have work to do, earn wages and more food to eat (the current pressure on food prices is an indirect consequence). The real question is whether the approach to the mitigation of distress is indeed the most efficient and effective one, as there appear to be serious problems of implementation.
The statistics reveal that only about 10.62% of the total 33.89 million registered rural households in 2007-08 were provided 100 days of employment. The national average of the number of working days per household under NREGS was only 48 in the last fiscal year—less than 50% of what was targeted. Eighty per cent of the households said they did not get the work within the stipulated 15 days time of demand for work in writing, nor were they paid any unemployment allowance. It was found that only in 42% of households could women share the one-third of the allocated person-days (wage days).
Several concerns arise. While recognizing the need and usefulness of the scheme, it is clear that much more needs to be done in ensuring that the benefits reach all the beneficiaries in full measure. This year’s allocation is Rs39,100 crore, and if only 10.62% is fully utilized, it is a colossal waste of resources. The attempts at improvement seem to be only in improving monitoring, reporting evaluation, more policing; little has been done to address concerns on whether the administrative set-up is indeed the most appropriate for this purpose. To my knowledge, the same structure that was implementing very different schemes in the 1980s is being used now, and the results then were as poor as they are now. The issue is not monitoring, but the administrative structure itself, at the district and village levels.
Second, more importantly, there is a contradiction between creation of permanent assets and use of unskilled labour alone—a contradiction in the rural development ministry that has persisted over two decades and which no one is prepared to address. Either the scheme is a dole, in which case cash can be given away directly, or it should improve livelihoods in the long term, which requires better planning, and better selection of projects. The attempt in this Budget towards “convergence” of rural schemes is an attempt to bypass this problem by using these funds for all the existing programmes—this is purely a budgetary solution, not a livelihood solution.
The ministries need to think afresh, not repeat the mistakes of the 1980s.
S. Narayan is a former finance secretary and economic adviser to the prime minister. We welcome your comments at firstname.lastname@example.org