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Keep up the tempo

National Rural Employment Guarantee Act is alive and well but requires careful nurturing. Raghbendra Jha, Raghav Gaiha & Shylashri Shankar examine...

india Updated: May 21, 2008 22:45 IST

Following the Comptroller and Auditor General of India’s (CAG) audit of the National Rural Employment Guarantee Act (NREGA), critics have tried to give it a burial. The CAG report said there were leakages with 3.2 per cent of registered households succeeding in securing 100 days of employment in a year. Further, there was marked unevenness in its implementation.

In UP, large segments of the rural population were ignorant of the scheme. In contrast, Rajasthan was among the top performers — the average employment per participating household was 77 days of work; Tripura performed well too, as the average number of days of employment per rural household was 87 days. Somewhat surprisingly, Kerala was at the bottom. In fact, only one of the southern and western states (Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra and Tamil Nadu) — Karnataka — generated more than 10 days of employment per rural household in 2006–07, while the eastern and northern states performed better.

In the furore caused by the audit, some encouraging features of NREGA have been given short shrift: first, a high share of female employment (about 40 per cent nationally, rising to 81 per cent in Tamil Nadu, and a low of 12 per cent in Himachal Pradesh); and second, limited but unmistakable evidence of greater economic security, higher farm wages, lower migration, and building of infrastructure. However, no general conclusions can be drawn about the accuracy of targeting and prompt disbursal of wages.

Two surveys of NREGA in Rajasthan and Andhra Pradesh (AP) in 2007 lead to a more sanguine assessment of its targeting and duration of participation. Although the analysis is based on data collected from three villages in Udaipur district in Rajasthan, and three in Chittoor district in AP, the samples of households (340 in Rajasthan and 602 in AP) are not small. So the findings cannot be dismissed as unrepresentative.

In terms of pro-poor targeting by the scheme, AP performed better than Rajasthan (which is contrary to the CAG report). One-third of our sample participated in the job scheme in Rajasthan as compared with over half of the households in AP. Of these participants, 90 per cent belonged to the ‘Others’ category in Rajasthan and only 10 per cent belonged to the SC/STs categories. In AP, in contrast, about a third were SCs and 13 per cent were STs — a finding that indicates greater accuracy of targeting.

Second, the better targeting of NREGA in AP is reflected in the fact that 75 per cent of participants were agricultural labourers, and a fifth were self-employed in agriculture, and none belonged to the ‘other labour’ category. Compare these figures with Rajasthan where 46 per cent of participants were self-employed in agriculture and 40 per cent were employed as ‘other labour’. Moreover, the shares of landless or nearly landless (ie owning less than 0.75 hectare) were high in both states (about 76 per cent in AP, and about 58 per cent in Rajasthan).

Third, contrary to the findings of CAG and others, the duration of participation was high in both states, and, more important, among the disadvantaged groups. About 60 per cent of the participating households in Rajasthan worked for over 50 days (20 per cent worked for over 90 days), as against 42 per cent in AP (14 per cent for over 90 days). Among the landless (owning less than 0.1 hectare) in Rajasthan, more than three-quarters worked for over 50 days, while in AP the corresponding share was lower but, nevertheless, high (about 43 per cent). This is in striking contrast to the finding that none from the highest land-owning group (owning more than 2.5 hectares) in either state worked for more than 90 days (and the average number of days worked in the 50-90 days range was 53 days in AP). So the apprehension about the capture of NREGA by the landed elites is exaggerated, if not mistaken altogether.

Finally, in both Rajasthan and AP, controlling for various household characteristics, the greater the likelihood of participation in NREGA, the longer was the duration of participation. So, given the greater likelihood of participation of traditionally disadvantaged groups such as the SC and ST or the landless or nearly landless, our analysis confirms that they were also likely to participate for longer spells. In conclusion, NREGA is alive and well but requires careful nurturing.


Raghbendra Jha is Professor of Economics, Australian National University; Raghav Gaiha is Professor of Public Policy, Faculty of Management Studies, Delhi University; and Shylashri Shankar is Fellow, Centre for Policy Research.