Chapter II

REVIEW OF LITERATURE
A review of past research helps in identifying the conceptual and methodological issues relevant to the study. This would enable the researcher to collect information and subject them to sound reasoning and meaningful interpretation. A brief review of the earlier research work related to the present study is presented in this chapter. Keeping in view of the objectives of the study, the reviews are presented under the following headings. 2.1 Impact of Rural Employment Guarantee scheme in enhancing the livelihood security of people in rural areas 2.2 Impact of Rural Employment Guarantee scheme on Eco-restoration and regeneration of natural resource base for sustainable rural livelihood. 2.3 Impact of Rural Employment Guarantee scheme on creation of durable community social and economic assets and infrastructure development in rural areas. 2.4 Problems in implementation of the Rural Employment Guarantee scheme

2.1 IMPACT OF RURAL EMPLOYMENT GUARANTEE SCHEMES IN ENHANCING THE LIVELIHOOD SECURITY OF PEOPLE IN RURAL AREAS Rangarajan and Dholakia (2003) stated that the most important determinant of consumption is a function of income C = f(Y). The relationship between consumption and income is termed as consumption function or the propensity to consume. The marginal propensity to consume (MPC) measures the change in consumption (C) due to change in income (Y). The MPC can be defined as C/Y, it is the slope of consumption curve. MPC is positive but that is always less than one. As income increases, consumption increases but less than the increase in income. This is a proposition of major importance in the model of income determination.

In a study conducted by Reddy (1995) on impact of Jawahar Rozgar Yojana (JRY) in Ranga Reddy district of Andhra Pradesh, it was reported that after the introduction of JRY programme, out of 71 families, one each of the family members was given additional employment in the off season. Further, the study also inferred that after exposure to JRY, majority (96 per cent) of the beneficiaries had their income level between 3001and above and the remaining (4 per cent) in the category of Rs. 2001-

3000. While before JRY, the income level of majority (60 per cent) of the beneficiaries was between 1001-2000 category followed by the category of 2001-3000, 3001

and above and less than 1000 with 28, 10 and 2 per cent, respectively. Samuel (2000) indicated that before the introduction of Integrated Rural Development Programme (IRDP), majority (64.44 per cent) of the beneficiaries had medium income followed by low (20.56 per cent) and high (15 per cent) income generation. After the introduction of the IRDP, 68.33 per cent of the beneficiaries reported medium income followed 18.89 per cent with high income and only 12.78 per cent reported low income. Ahiladevi et al. (2001) found that majority of the IRDP beneficiaries reported increased in the income as the direct impact of IRDP. Arulprakash (2004) found that around one third of the beneficiaries of SGSY in Thiruvallur district of Tamil Nadu had incremental income in the range of 3000, whereas 27.50 per cent had generated net income in the range of 2000, 15.83 per cent of the beneficiaries were able to earn upto 2001 to 1001 to

1000. About 5.83 per

cent and 2.50 per cent of them had incremental income of 4001 to 5000 and Rs 5001 to Rs 6000 respectively. After getting assistance from SGSY, 72 per cent of the beneficiaries were fully employed and 34 beneficiaries (28 per cent) changed from being wage earner to self employed. The study also revealed that, nearly half of the beneficiaries were able to get 101 to 200 man days of employment, 15.83 per cent and 9.16 per cent of them got the benefit of 201 to 300 man days and more than 300 man days of employment opportunities. Samuelson and Nordhaus (2004) stated that the value of multiplier will be equal to; 1/(1-C/Y) or 1/1-MPC when the MPC is high, the value of the multiplier is also high.

Dogra (2005) revealed that during the eighth five year plan (1992-1997) 5,120 million man days of employment were generated under various rural wage employment programmes including JRY and EAS. Chakraborty Pinaki (2007) noted that enrollment for MGNREGS far exceeded the number of BPL households in most states. In Bihar and Jharkhand only 50 and 80 per cent of the BPL households obtained MGNREGS enrollment. The MGNREGS enrollment as a percentage of the number of applicants was low in Maharashtra, followed by Karnataka, Bihar, and Jharkhand. He also noted that, for Andhra Pradesh and Gujarat the supply of employment had met the demand, for most other states, enrollment fell far short of the demand. Dreze and Oldiges (2007) observed that Rajasthan performed best among all the states in 2006-07 as it generated 77 person-days of MGNREGS employment per rural household, where as Tripura generated 87 person-days and only one of the Southern or Western states (Karnataka) generated more than 10 person-days. Srivastava et al. (2007) conducted a study in 11 districts of Madhya Pradesh with a sample size of 2,208 rural households. They found that in spite of government employment generation schemes, 86 per cent of earners in the paid employment category are agricultural labourers with a small average annual income of 5,046, whereas other occupations yielded more than double this income. Further, 85 per cent of the self employed earners among the poor are small cultivators with an average annual income of 7,290. Besides, the percentage of households taking loans during the preceding year of the study was 23 per cent. They have also found that the implementation of the National Rural Employment Guarantee Act may prove to be an effective intervention in reducing poverty in rural areas of the state. Mathur (2007) revealed that per district person days of employment and households provided employment were comparatively high in Madhya Pradesh (1.6 lakh households and 68 days), Orissa (0.7 lakh households, 57 days), Chattisgarh (1.7 lakh households, 54 days) and Rajastan (2 lakh households, 83 days). In West Bengal and Tamil Nadu, although 3 lakh and 1.2 lakh households respectively worked under NREGA, they could do so only for 14 and 26 days respectively.

Ambasta et al. (2008) reported that there are 6.42 crore Rural Labour Households (RLH) in the country. Out of this, 80 per cent of them offer themselves for employment and the number of RLH for whom the 100 days job guarantee was extended was 5.14 crore. Khera (2008) that in 2007-08, many Sangaathan members were able to work for full 100 days employment on the MGNREGS (the upper limit under the Act) and in Pati the average number of days of employment was 85 days compared with just 23 days in Rajpur. Mehrotra (2008) noted that the number of person-days of work provided per household (by those households who demanded work) was 43 days, on an average in India as a whole, in 2006-07 and in 2007-08, only 42 person-days were generated in 330 districts. Shah and Mehta (2008) reported that some of the problem of supply side management, observed during most of the employment generation/guarantee programmes, including Maharashtra Employment Guarantee Scheme (MEGS), seemed to loom large in the early phase of MGNREGS. Ministry of Rural Development (2008) reported the impact of NREGA has increased employment opportunities, enhanced wage earnings, promoted equity through 33 per cent reservation for women in NREGA works, financial inclusion through opening of Post Office and bank accounts for payment of wages, abatement of distress migration. Gladson (2008) reported that the constructive impact of NREGA had been undeniable: a rise in rural daily wage rates, reduced migration and positive social effects. On the other side it also contributed to the rising of farm input costs, withdrawal of labour from the farm sector and therefore impacted agricultural operations and food prices. He also reported that the farmers from Jaipur district said it was a novel experience to coax, rather than command, labourers to work in their fields. They are full of nakhras. They all want to sit on tractors!" said farmer Ram Karan. In that sense, NREGA had been socially empowering for lower castes. Jacob (2008) studied the impact of MGNREGA on rural-urban migration in Villupuram district of Tamil Nadu. After the implementation of the scheme, the income of a worker had increased from 9000 to 12000-13000 a year. The income of the

families was more predictable and stable after the implementation of the Act. Previously

the incomes resembled a spiky pattern and not regular spurts and even dip really low, so the families have to migrate to find work to get food, borrowed money from the contractors. After the implementation of MGNREGA, regular inflow of income per family was guaranteed under the Act as long as the families were ready to work as unskilled labour for 100 days in a year. Khera and Nayak (2009) conducted a survey in Madhya Pradesh and Rajastan and found that in Pati block, the average number of days of employment during the 12 months preceding the survey was as high as 85 days, compared with just 23 days in Rajpur block. The corresponding average for the two districts surveyed in Rajastan was 71 days. Siddhartha and Anish (2008) reported that Ministry of Rural Development (MRD) came out with calculations which suggested an average of 44 days of employment per household in India, with 10 per cent of households getting 100 days of employment. Whereas CAG report suggested that each registered household received 18 days of employment on average, and only 3.2 per cent of registered households worked for the full 100 days. So CAG and MRD arrived at two different numbers because of the fact that CAG took registered households as the reference group, while the MRDs calculations focus on households employed under NREGA. The registered household (CAG) approach does not capture the demand driven aspect of the Act. Vijayanand and Jithendran (2008) in their study implementation of NREGAExperience of Kerala reported that MGNREGS had suddenly increased the purchasing power of the poor and there was visible local economic development and the scheme laid foundation of livelihood security through hundred days wage employment. Gundeti and Kumar (2009) studied the impact of MGNREGA in Karimnagar district of Andhra Pradesh. Out of 670 MGNREGA workers, 39 per cent were from the age group of 30 to 40 years, 35 per cent were between 20 to 30 age group and the rest of them were in the age group of 40 to 50 years. The workers participated under MGNREGA were agricultural labourers, small farmers, daily wage earners and bidi rollers which accounted for 66, 11, 10 and 13 per cent respectively. The income level of workers was increased substantially and daily wage income was increased by two fold.

A study by Kohli (2009) indicated that the MGNREGA helped the beneficiaries to avoid hunger or improve their diet (69 per cent), avoid migration (59 per cent), send children to school (38 per cent), cope with illnesses (50 per cent), repay debts (32 per cent) and avoid hazardous work (35 per cent). The MGNREGA provided an unique opportunity for women belonging to rural India to earn their own income. The women respondents to the extent of 33 per cent had no earnings except their MGNREGA wages in the three months. MGNREGA reduced the exploitation of labour through increase in wage rate to . 85 per day. The labourers preferred working under MGNREGA rather than working in private land owners because the working conditions were better in terms of working hours and productivity norms. Karemulla et al., (2009) found that the earnings from NREGS wages in Andhra Pradesh accounted for 32 per cent of the households income for those families who worked in the scheme as labourers. 2.3 per cent of the total households employed and 2.3 per cent of employment generated in India under NREGS was from Karnataka state. The share of employment for women was 45.4 per cent. 4.8 per cent of households completed 100days of employment and on an average 38 days of employment was provided to each household in Karnataka. The study also found that during the past 3 years ending March 2009, about 4.5 crore rural labourers have obtained employment under the NREG scheme with about 14 per cent of them getting 100 days of employment during 2008-09 in India. Andhra Pradesh is one of the leading states in implementation of the scheme with 2,36,021 (11.2 per cent) works completed in the country by 2009, with cumulative expenditure of Rs 2,964 crore. In terms of employment generated under the scheme, Andhra Pradesh stood second with 20.8 per cent of the total employment in the country next to Rajastan (33.9 per cent). The share of households obtaining the guaranteed 100 days of employment was highest in Andhra Pradesh (23.1 per cent). On an average, 38 days of employment was provided to the employed persons in the NREGS across the country during 2006-2009. Among the states, Rajastan had provided the maximum employment of 58 days to each of the households. Maulick (2009) recorded some positive features of NREGA a high share of female employment, increase in economic security, higher farm wages, lower migration and building of infrastructure.

Ramesh and Kumar (2009) in their study on MGNREGP in Karimnagar district of Andhra Pradesh indicated that, in addition to the average monthly income of 2100, the MGNREGP workers earned monthly income of 1000 (66 per cent) after working

under the Act followed by 1125 (11 per cent) and 1500 (10 per cent). Further due to increased income of the MGNREGS beneficiaries, expenditure level had increased marginally by 10 per cent but monthly savings of the workers was not improved substantially since; their major part of the income earned was often being used for the payment of old debts. Sankari and Murgan (2009) in their study on the impact of MGNREGA in Thothukudi district of Tamil Nadu indicated that Out of 80 respondents, 35 respondents (43 per cent) had income between had income between 15000 to 30000 and 11 respondents (13 per cent)

45000 to 60000 after joining MGNREGA as compare to the 28 15,000 to 30,000 and 7 45000 to 60000 before

respondents (35 per cent) belongs to income group between respondents (8.75 per cent) between the income group of joining the MGNREGA.

Kareemulla et al. (2010) studied the impact of MGNREGA in Anantapur district of Andhra Pradesh. Among the beneficiaries, the farmers and landless labourers were 62 and 38 per cent respectively. MGNREGA has reduced the migration in the sample villages from 55 per cent to only 13 per cent. Similarly, the annual income earned as a consequence of migration has decreased from 8135 to 1414 per family. The earning

from MGNREGA wages accounted for 32 per cent of the household income for those families who worked in the scheme as labourer. The works undertaken were found useful to the extent of 76 per cent. The implementation of MGNREGA has affected the labour supply and wage rates for agricultural operations. During peak season there is an increase in wage rate to the tune of 38 per cent per annum, while it was 34 per cent during slack season. Sharma (2009) studied the potential and challenges of MGNREGA. According to the data compiled by the Ministry of rural development, in states like Uttar Pradesh, Haryana, Rajasthan and Orissa, there has been a significant rise in daily wage rates given to agricultural labourers, following the introduction of MGNREGA. The average daily manual wage rate has risen from 65 two years back to 85 at present. The states are forced to revise the prescribed daily wage rate as there has been acute shortage of labour in taking up agricultural activities especially during sowing and harvesting

period. He also concluded that employment and wage rates had gone up leading to significant dent in poverty in rural areas. Minimum wages for agricultural labourers had increased after the implementation of NREGA in Maharashtra from Uttar Pradesh from 58 to to 100, in Bihar from 68 to 58 to 47 to 72, in

81, in West Bengal from 64

75, in Madhya Pradesh from

85. At the national level, the average wage 65 in 2006-07 to 84 in 2008-09. Increase in

paid under NREGA has increased from

wage rate and number of work days in rural areas has increased the income of rural households (Kurukshetra, 2009). Indian Centre for Research in Rural and Industrial Development, (CRRID) (2009) Under the Professional Institutional Networking (PIN), in an appraisal of impact assessment study, revealed that about 59 per cent of the total workers reported considerable increase in their income due to NREGA. In fact more than 82 per cent of the workers from district Sirsa reported considerable increase in their income. Only about 16 per cent of the workers reported no increase in their income. Regarding expenditure on food, more than 77 per cent of workers had reported that their expenditure on food items had increased. In fact 97.50 per cent of workers of district Sirsa reported increased expenditure on food items. More than 65 percent of the workers said that their expenditure on non-food items had also increased. It had also been reported that children of nearly 62 percent of the workers were attending school. This is highest in district Sirmaur as children of more than 76 per cent of workers were attending the school. Ramesh and Kumar (2009) conducted a study in Karimnagar district of Andhra Pradesh by selecting 500 women beneficiaries to examine impact of the MGNREGA on women empowerment and found that the scheme had provided a stage for women to come forward and assert themselves. Roy (2009) studied the impact of MGNREGA on rural poor people in the 4 districts of Tripura and found that the poor people were happy to work in the MGNREGA. The agony of income uncertainty of the tribal people had withered and both tribal and non-tribal rural poor people get regular and assured flow of income commensurate with the labour and time involved. It had emboldened the confidence of rural-unskilled labourers and women and most particularly the aged women and widows who could hardly go out of village for searching a work and had it.

Venkatesan (2009) study in Nagalur panchayath area of Tamil Nadu revealed that Shantikuppa Swamy, was getting 1000 per month, before the implementation of 1885 per month. MGNREGA but after the implementation of MGNREGA she got

The people of Nagalur Panchayath were depending on coffee estates for daily wages. Implementation of MGNREGA brought alternate avenues of employment and increased the wage rate by 10-20 per day for estate workers who used to get 90 in the pre MGNREGA period. The beneficiary mentioned above would have waited for seasonal work in coffee estates or travelled downhill to the neighboring textile towns for a job, but because of MGNREGA the migration was avoided. Vinayak (2009) attempted to estimate the impact of participation in MGNREGA on the children of participating households in Andhra Pradesh, looking specifically at anthropometric scores as indicators of health outcomes, and the incidence of child labour. He found that there was a positive correlation between program participation and health outcomes, which did not remain robust across specifications. On the other hand he found that program registration reduces the probability of a boy entering child labour by 13.4 per cent and that for girls by 8.19 per cent. He found that the targeting efficiency of the program was largely effective and it seemed to offer a viable security net for households with variable employment opportunities. It also seemed to have an important effect on children, further strengthening the programs significance. Argade (2010) found that before introduction of MGNREGS, 71.11 per cent of MGNREGS beneficiaries had belonged to medium ( category and 17.78 per cent belonged to high (> income. Argade (2010) found that majority (55.56 per cent) of the MGNREGS beneficiaries had medium employment generation followed by high (23.33 per cent) and low (21.11per cent) employment generation before the introduction of MGNREGS. After introduction, majority (70.00 per cent) of the beneficiaries reported high employment generation and rest (30.00 per cent) medium employment generation. No one was found under the category of low employment generation. Banarjee and Saha (2010) studied the impact of NREGA in Chattisgarh and concluded that person days of employment per household was in the range of 39 per cent to 55 per cent. It was found that, with the implementation of NREGA, farmers had additional income to invest in agriculture. This was resulted in an increase in crop yield 13140 19320) income 13140) income category. After

introduction, it was found that 95.56 per cent of beneficiaries ha belonged to high

in the study regions of Chhattisgarh. The increase in paddy yield was in the range of 50 to 55 per cent. In the study region of Chhattisgarh the net household income increased in the range of 16 to 23 per cent in 2008-09. Kamboj et al. (2010) studied the impact of MGNREGA on agriculture sector in Mahendergarh and Sirsa districts of Haryana. The activities carried out under MGNREGA had increased the employment by 41 man days (30.40 per cent) per beneficiary household per annum. The percentage increase in employment was highest for agricultural and landless labourer followed by other rural labourer, marginal farmers and small farmers. The overall average net family income of selected beneficiaries increased by 5614 (30.43 per cent) per annum. It was also observed that MGNREGA has led to a shortage of labour for agriculture farm work resulting in increased agriculture wage rate. This has adversely affected land lords and they started opposing the scheme in some places. Jeyashree et al. (2010) made an economic analysis of MGNREGA in Tamil Nadu and showed that the average annual income of the beneficiaries before and after the implementation of the programme was 16173 and 21067 per household

respectively. Similarly, the income earned for agricultural and non-agricultural activities were 5165 and 4624 per household. Pankaj and Tankha (2010) studied the empowerment effects of the NREGS on women workers in North India and concluded that woman workers earnings from NREGS was in the range of 8 per cent to 21 per cent of total annual income of the household, majority of women workers were found to collect and retain their wages. Significantly, it was found that 55.6 per cent of sample women retained up to 25 per cent of their wages. The proportion of women who controlled up to 25 per cent of their NREGS wages for personal use was in the range of 50 per cent to 69 per cent. Twenty nine percent of women surrendered their earnings. Banerjee and Saha (2010) stated that the UPA-I government's flagship programme under the National Rural Employment Guarantee Act (NREGA) was aimed at countering some of the developmental woes of the Indian states in the backward regions. The Maoists were active in some of the most backward areas and the government had been accusing them for stalling development. Hence, the current solution, as operationalized by the Government, was to flush out the anti-development lists by force and then proceed with development. They examined these issues through a case study of the NREGA in Jharkhand, Chhattisgarh, and Orissa. The districts chosen

were from the first 200 where the NREGA had been implemented from 2006 onwards and were also under the influence of the Maoists. They suggested that the levels of rural distress could be tackled and that the proper working of the NREGA seemed to be a small but necessary step in that direction. Mishra et al. (2010) examined the varied impacts of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and described the programme as a development delivery institution for the tribal communities vis-a-vis other social groups across the Indian states. Using the framework of new institutional economics they found a number of state-specific, socio-economic institutional factors which were responsible for these variations and therefore suggested institutional reforms and convergence of the development initiatives of the Ministry of Tribal Affairs with the NREGS in order to realize the optimal potential of the scheme, and, in particular, to ensure greater livelihood opportunities for these marginalised groups and their entitlement to productive resources with greater socio-economic and political empowerment. Roy and Singh (2010) conducted a study in two districts, Burdwan and Dakshin Dinajpur of West Bengal with 200 beneficiaries as respondents to assess the impact of MGNREGA on the empowerment of the beneficiaries. Significant positive changes were found by them in the level of aspiration, self confidence and self reliance of the respondents after commencement of the scheme. They found hundred per cent respondents in low empowerment category before MGNREGA but 75.5 per cent of the respondents under low empowerment category and 24.5 per cent under medium empowerment category after working under MGNREGA. So they observed a positive impact of the programme on the empowerment of its beneficiaries in the study area. Ashwani et al., (2011) observed that the major problems by the respondents were low wage rate (78 per cent respondents), delay in payment, delay in provision of work after registration, fake registrations, and unavailability of material at working place. Awasthi et al., (2011) indicated that MGNREGA has increased persons-days employment, created productive assets, strengthened infrastructure, slowdown distress migration and empowered the women folk. Wage and farming have been reported to be main source of income by 97 per cent of the sample beneficiaries. The incremental

income ( 2639) has not only enhanced the expenditure capacity of households but has also promoted their savings (Rs.39). Channaveera et al., (2011) in their study has tried to capture the effect of MGNREGA by selecting two sets of villages in the Gulbarga district of Karnataka, one village has used 75 per cent of allocated funds and the other used less than 25 per cent of allocated funds under MGNREGA. The total cost of cultivation in fully-implemented MGNREGA villages has been found higher by 22.91 per cent and 16.37 per cent in red gram and Rabi Jowar, respectively. The wage rates (both male and female) in fullyimplemented villages were considerably higher than partially implemented MGNREGA villages. Harish et al., (2011) in his study in central dry zone of Karnataka found that the increase in income was to the tune of 9.04 per cent due to additional employment generated from MGNERGS. In the total income, contribution of agriculture was the highest (63 per cent), followed by non-agricultural income (29 per cent). MGNREGS contributed eight per cent of their total income. He also reported that the number of days worked in a year with the implementation of MGNREGS programme had significantly increased to 201 days, reflecting 16 per cent increase in employment. Kumar (2011) concluded that MGNREGA was yielding better results compared to earlier poverty eradication programs. So far it created 90.51 man days of work. Eighty to ninety percent of rural households were economically benefited. Out of this 29.4 per cent were SCs and 24.1 per cent were STs. Nearly 50 per cent of women were benefited by this act in the country. Pradeep Hadke (2011) reported that under MGNREGS in 2007-2008, about 3.39 crore households were provided employment and 143.5 crore person day employment was generated in 330 districts. In 2008-09 (up to July), 253 crore household were provided employment and 85.3 crore persondays were generated. The scheme has enhanced wage earnings, leading to strengthening the of livelihood resource base of the rural poor in India. The programme has depicted high work participation of marginalized groups like SC/ST (57 per cent) in 2007-2008. Sarkar et al., (2011) noticed that the combined effect of additional employment generated by MGNREGS and the increased rate of wage in both MGNREGS and

agricultural labour had made significant changes in the annual per capita income of beneficiaries, which got increased by 10 per cent. Sivasakthi devi et al., (2011) found that the participating households had highest proportion of income from MGNREGS (35 per cent), followed by agricultural wages (30 per cent), livestock farming (27 per cent) and other sources (8 per cent). On the other hand, the non-participating households had highest proportion from livestock (40 per cent), followed by agricultural wages (38 per cent) and other sources (22 per cent). It has also found that one per cent increase in wage rate would increase labour supply by 1.92 per cent among MGNREGS participants and 2.36 per cent among MGNREGS non-participants in Tamil Nadu. They also revealed that as income increases, household welfare improved through increase in consumption expenditure which led to the food and nutritional security of the people. Sontakki and Ahire (2011) made an analysis on the impact of MGNREGA on Indian agriculture and reported that the labour crunch is likely to fuel demand for expensive mechanical sowing devices, such as translators, among capital-intensive farmers of Punjab and Haryana. According to an estimate, the productivity was expected to drop by 15 to 20 per cent during kharif 2008 in prominent rice growing belts of the country owing to labour scarcity due to the implementation of MGNREGA. Srikantha Murthy and Indumati (2011) studied the impact of MGNREGA wage on the economic scarcity of labour. By using macro level data they concluded that, MGNREGA created the economic scarcity of labour and increased the non-farm wages. Usha Rani et al., (2011) in their study in Haryana has revealed that despite being a source of employment, MGNREGA has not been able to check the migration from the developed region because of higher market wage rates at destinations. The farmers who have small land and livestock resources are more inclined to work in MGNREGA and their participation is also more. Thus, MGNREGA was providing livelihood security to the resource-poor rural people. In the agriculturally backward area, the share of MGNREGA jobs in total employment was 24.6 per cent, while it was 13.7 per cent in the developed area. Vanitha and Srikantha Murthy (2011) revealed that, the average annual wage income earned by the women participants from MGNREGS works was from agricultural work it was 7609 and by the men participants was 5167 while 6050 and

14506 from MGNREGS works and agriculture respectively. Although, there was a

slight difference in the average annual wage income earned from MGNREGS by women and men participants, the difference was not statistically significant. They also reported that the irrigated area the average annual wage income earned from MGNREGS is more for SC/ST participants than others, the difference was not statistically significant. The irrigated area and per capita person days of employment were the two influencing variables of total annual income. During the study the Commission endeavours to look into the reasons for this phenomenal rise in agricultural wage rates and arrives at certain crucial findings. At all India level the magnitude of labour force covered under the MNREGA has gone up from 6.21 per cent during 2007-08 to 9.78 per cent during 2009-10. Even though in terms of coverage the Scheme has not made any considerable headway, this has at least revolutionized expectations of higher wage in rural India. In the agriculturally prominent states, where the Scheme has contributed a lot in terms of its coverage, may be experiencing relatively higher pressure on both availability of farm labour and the level of farm wage. Probable reasons for rise in wages are extended ambit of MNREGA and increasing migrants for construction activities in urban areas. (CACP, 2012-13). The Hindu (2012) published that MNREGA has created a silent revolution. With 100 days of employment and 132 guaranteed a day, the bargaining power of labourers has shot up. Thus the daily wage for male workers has skyrocketed to 250 a day and for female workers 150, virtually double that they have been getting in the early 2000. A study by Department of Rural Development, 2012 indicated It can be observed that the increase in the farm wage rates (after the scheme implementation) is higher in Mahabubnagar ( 73 for male wage rates). It is the small and marginalised farmers who are being more detrimentally impacted due to an increase in the labour component of the input costs. The agriculture sector has been impacted by input costs increasing by approximately 25- 35per cent in each of the surveyed Districts. Data showed that the labour cost component for farmers, increased by almost 26 per cent over last 2-3 years. An overview of reviews has been concluded that NREGA has raised the income of participant households at all India level. In addition there had been an indirect increase in income through improved returns on agriculture or increased employment in the local economy through NREGA assets. The areas where NREGA had been implemented on a large scale had also seen a decline in the distress and migration of workers.

2.2 IMPACT OF RURAL EMPLOYMENT GUARANTEE SCHEME ON FOR SUSTAINABLE RURAL LIVELIHOOD

ECO-

RESTORATION AND REGENERATION OF NATURAL RESOURCE BASE

Ministry of Rural Development (GOI, 2010) observed that the productive effects of MGNREGS in rural areas included improvement in ground water, improved agricultural productivity, cropping intensity and livelihood diversification. There was significant increase in production stimulated by MGNREGS on holdings of small and marginal farmers in rural areas. Pradeep (2011) reported that enhancement of agricultural productivity through water harvesting, check dams, ground water recharging, improving moisture content, check in soil erosion, micro irrigation, etc. Center for Science and Environment (2008) reported that from an environmental standpoint, rural employment programmes can play a key role in improving the rural natural resource base and increasing overall rural production. Environmental regeneration demands heavy labour inputs whether it is reforestation, construction of water harvesting structures or soil conservation. Preliminary findings MoRD (2012) indicated that MGNREGA works have led to a rise in ground water improvement in soil quality, strengthening livelihood and water security. In Rajasthan also observed that on an average, an anicut built under MGNREGA was irrigating an area of 26 hectares (ha) and enhancing ground water recharge for 3-25 wells leading to a rise in water levels between 10-40 feet. Three villages out of the 20 studied, recorded a significant rise of 30 per cent ,53 per cent and 77 per cent in ground water. Rise in ground water also led to an increase in the area irrigated. Ministry of Rural Development (2012) revealed that MGNREGA works have led to a rise in ground water, improvement in soil quality and reduction in vulnerability of production system to climate variability. However, the extent and kind of impact of MGNREGA works on the environment depend on the scale of the activities undertaken, the technical design, the quality of assets created and ownership and use of physical structures constructed. A study found that due to check dams created under the Mahatma Gandhi NREGA, the percolation potential of the villages studied improved by 1,00028,000 cubic meters a year. Construction of percolation tanks also improved recharge in the watersheds considered.

2.3 IMPACT OF RURAL EMPLOYMENT GUARANTEE SCHEME ON CREATION OF DURABLE COMMUNITY SOCIAL AND ECONOMIC ASSETS AND INFRASTRUCTURE DEVELOPMENT IN RURAL AREAS An important gain of NREGA at the village level has been the construction of a number of common and private productive assets. These assets have opened up opportunities for the diversification of agriculture. Though the number of NREGA assets increasing continuously in the economy, according to some researchers, there is a need to pay attention to ownership, use and maintenance of assets. Based on the premise, a preliminary study of literature which has been conducted in an attempt to know the impact of NREGA on creation of durable of rural people was carried out. Rangarajan and Dholakia (2003) the government expenditure and private investment have similar roles. Government expenditure will lead to a multiple increase in income as an increase in investment as does. The government expenditure multiplier will be the same as the investment income multiplier and will be equal to 1/1-MPC and the influence of Government expenditure (G) an income (Y) is identical to that of I on Y. Samuelson and Nordhaus 2004. reported that rise in income following an increase in Investment (I) induces an increase in consumption spending also. The ultimate increase in income is composed of original increase in investment and the induced increase in consumption brought about by it Investment spending is a high powered spending. The word multiplier is used for the numerical coefficient showing the size of the increase in output /income resulting from each unit increase in investment. Multiplier is the number by which the change in investment must be multiplied in order to determine the resulting change in total output/income. Hirway et al., (2006) studied that if the NREGS is undertaken on a scale and implemented well, it can reduce poverty at the bottom as well as empower the poor in the short run. The multiplier analysis has demonstrated the positive impact of NREGS on incomes, production and employment in Nana Kotda. For example the increase in terms of increased output is more than double than the increase in the expenditure because of increased income of labour households. Datar (2007) found that the gram panchayats have been given major powers to plan and execute the works needed for village development, which include watershed

activities for conservation of water as well as construction of roads and several other activities, which included more than 40 percent of skilled work. The labour to skill component ratio of 60:40 is not applied to each proposal but has to be taken into account covering all the works in the district. Centre for Science and Environment (2008) analysed that the works initiated under NREGA in the region shows that only 22 per cent pertain to water conservation; around 24 per cent of the works are for renovating water bodies and 18 per cent relate to drought proofing. Around 30 per cent of the projects are meant for construction of roads. Out of the Rs 100 crore spent under NREGA, construction alone. Karemulla et al., (2009) found that land development (34 per cent) followed by water conservation (30 per cent) were the two major interventions done under the NREGS in Andhra Pradesh. During the past 3 years, 22,375 works were completed in the Anantapur district contributing to natural resources development in farmers land. The total expenditure on this account was of 16,455 lakh. Among different types of 40 crore has gone on road

work completed under the scheme, water conservation accounted for the highest share (56 per cent) followed by land development (29 per cent), irrigation facilities (4 per cent), renovation of traditional water bodies (3 per cent), drought proofing and plantation (3 per cent), rural connectivity (3 per cent) and micro and minor irrigation works (1 per cent). Kohli (2009) studied that the workers as well as the survey team felt that most of community assets created under NREGA would help to address the basic needs of the rural people. Manoj (2010) concluded that in Tanjival grampanchayat of Wayanad district 31 lakh working days were provided for 57,924 workers during 2009-2010. Various projects such as digging elephant trenches to protect the people from wild animals and property of villages living adjacent to the forest areas and work in 369 km of fire lines, especially during summer were implemented in association with the forest department. Saxena (2009) reported that the impact of NREGA had increased social capital through collective planning and implementation among the stakeholders, increased physical capital through creating durable assets and improving land productivity, facilitating of ecological synergies through afforestation, drought proofing, flood

control and watershed activities, mitigate effect on climate change of NREGA works, enhanced economic opportunities through income opportunities, savings and investments, strengthened democratic processes, facilitating sustainable development through creating durable assets, rural connectivity, productivity enhancement and capacity development. India Today, 2013, Feb 14. Reported that Chidambaram as well as Pawar have asserted that MGNREGA operations have had an adverse effect on the availability of labour for agricultural operations. Their argument found that it was more profitable to enroll themselves under the MGNREGA instead of working on agricultural land, thereby harming agricultural productivity. They also believe that not all the work done under the MGNREGA leads to the creation of productive infrastructure and therefore, there is a huge opportunity cost if the labour is deployed for such works instead of agricultural production 2.4 PROBLEMS AND CONSTRAINTS IN IMPLEMENTATION OF THE SCHEME There is a huge hue and cry against NREGA on the ground of corruptions in its implementation. It is argued that NREGA breeds corruptions in its implementation. It is also argued that direct programs of infrastructure development and natural resource management will give much better results in terms of creating employment for people in the mainstream economy and for raising their levels of living. Based on the premise, a preliminary study of literature which has been conducted in an attempt to know the impact of NREGA on livelihood security of rural people was carried out. Jain (1989) studied the impact of MGNREGA on employment and income of the beneficiaries in selected areas of Reva district of Madhya Pradesh found that most of the MGNREGA beneficiaries reported the problems as inadequate staff, lack of accountability, inadequate employment generation, less coverage of programme, lack of productive works, lack of technological and inefficient management of work, more involvement and miss behaviour of contractors and incomplete works. Bhatia & Dneze (2006) revealed that, there is little difference between NREGA and earlier employment programmes such as NFFWP and SGRY. The basic purpose of providing employment on demand, at the statutory minimum wage, is nowhere near being achieved. However there were irregularities such as delays in wage payments, non-payment of minimum wages and inadequate worksite facilities in the earlier employment programmes. But, NREGA was providing vital employment opportunities to the rural poor and helping to revive the local economy.

Savale (2006) conducted a study in Nasik district of Maharashtra wherein he has compared the EGS and SGRY programmes. He found that EGS was very vulnerable to corruption, and long delays in the payment of wages to workers were common. SGRY projects had shorter delays in the payment of wages usually up to a month. EGS better met the needs of poor rural people for manual wage work and especially for work at times when no other employment is available. More widespread use of illegal heavy machinery, especially JCB and relatively high number of outside workers were detected in SGRY than EGS projects. SGRY workers were found more likely to be employed by big contractors and women workers were less likely to find work in SGRY whereas EGS had a relatively good record of women participation because it was easier for women to find work near home. Chathukulam and Gireesan (2007) in their study on impact assessment of MGNREGS in Kerala observed that paucity of technical staff, delays in wage payment in MGNREGS as major constraints. Datar (2007) says that the reasons for low demand for employment guarantee scheme in Maharashtra was that the wages were unrealistic and not paid on time. She had concluded in her study that the officers accept that for the last few years the Employment Guarantee scheme in Maharashtra was run by contractors, who used to get orders by paying bribes to line departments, which did not want to prepare estimates and supervise works. The poor had become weary of the scheme because of lack of regularity and assurance of wages. At the same time, unemployment allowances were not granted to any labourer who was not provided work. Seasonal migration was on the rise as a result of the situation. Das and Pradhan (2007) reported that contractors were involved in MGNREGS and they had taken all the wage earners job cards and it was reported from Talandangadang of Koraput District in Orissa. Jaffer (2007) studied the problems of MGNREGA in Gulbarga district of Karnataka and reported that lack of knowledge on MGNREGA among the target people, ignorance of Gram Pradhan and Gram Vikas Adhikari regarding provisions of the Scheme and demand of money to prepare job cards. Use of machineries (tractors) instead of engaging the people, lack of facilities for women to carry their children to working place, etc., were the major problems.

Ambasta et al., (2008) analyzed that the programme was constrained by lack of personnel, inappropriate rates, bureaucracy and lack of a genuine social audit process. They suggested that for work to be productivity-enhancing and for effective social accountability, major reforms need to be introduced in NREGA implementation. These include: (1) deployment of full-time professionals (2) building up a massive cadre of fully trained "barefoot professionals" at the Gram Panchayat level; (3) continuous monitoring and evaluation at every stage of the programme to ensure quality; (4) greater use of information technology to infuse more transparency, accountability and speed at all stages; (5) revision of the wage rates (6) mandating civil society organizations to support Panchayat Raj Institutions in NREGA planning, implementation and social audit. They also reported problems like lack of professionals, under-staffing, administrative delays, lack of peoples planning, poor quality of work undertaken, inappropriate wage rates and poor social audit process. Gladson (2008) highlighted the implications of MGNREGS on agriculture sector. Though MGNREGS provided employment, it enabled a labour shortage for agriculture. As a result of labour shortage, cost of labourers escalated constraining agriculture production. Khera (2008) observed extremely low wages, deficiencies in work measurement at the worksite, coupled with lack of co-ordination among MGNREGS staff undertaking measurement as major constraints in implementation. Mudra Institute of Communications (2008) conducted a study to find out the sustainable livelihood models under NREGA in 3 districts (Birbhum, Purulia and North 24 Parganas) of West Bengal. They found one problem which was rampant across all the villages was the lack of adequate communication which led to lack of awareness about NREGA norms and regulations among various stakeholders. There was a lack of communication from the District level to the Panchayat level and from the Panchayat to the villagers. Panchayat workers, who were the implementer of this scheme, were not aware of the scheme in its true spirit. Narayanan (2008) elaborated the difficult predicament of young mothers in Villuppuram district (Tamil Nadu, India) who worked under the National Rural Employment Guarantee Act (NREGA), revealed that it played a positive role in their lives. It was pointed out that the provision of effective childcare facilities at NREGA worksites was an important issue that calls for creative thinking and action.

Vanaik and Siddhartha (2008) found that the payment of wages through bank accounts for work carried out under the National Rural Employment Guarantee Act in India had been suggested, and implemented in a few districts, as a way to prevent embezzlement of funds. Drawing on a field visit to Mayurbhanj district, Orissa, they found that this process was not free from its own problems. The system of maintaining bank accounts and the instruments of transfer etc were still imperfect. Vijayanand and Jithendran (2008) on MGNREGS reported that the programme clashed with agricultural season during implementation of the programme works. Vinayak (2009) reported that in his study in Jharkhand where employment was offered under NREGS, there were delays in wage payments. Against the legal stipulation of payment within 15 days, funds for payment of wages were often released only 40 to 50 days after works had been completed. According to Dhawan (2009) the current design of MGNREGA has left needy women out of its purview, an International Labour Organization (ILO) report says, Many unmarried and widowed women live in families and cannot claim to form a separate household. But their need for work can be particularly urgent. It has been pointed out that the current design of MGNREGA has left out some needy women out of its preview, women beneficiaries worked for less than 30 per cent of the mandated 100 day scheme. This was well below the national average of 40.60 per cent working days for women. Jammu and Kashmir is in the bottom with women working for barley 4.5 per cent of working days. Traditionally, the workforce included older, married women but now single and unmarried women are joining the workforce, while some are delaying marriage, which shows that the family is desperately in need of the money. According to Banarjee (2009) implementation of MGNREGS in Andaman and Nicobar islands was constrained by delay in issuance of job cards, lower peoples participation in the scheme, absence of NGOs and civil society in the scheme, ineffective social audit, lack of unemployment allowance, delay in initiation work by Panchayats, poor performance of monitoring and vigilance committee (MVC) and involvement of contractors in MGNREGS works. Karemulla et al., (2009) reported that the implementation of NREGS had affected labour supply and wage rates for agricultural operations. In Anantapur district, the increase in wages was to the tune of 38 per cent per annum in peak season while it was 34 per cent during slack season. This indicates rationalization of rural wage rates,

but it pinches the farmers as it cuts down their profit margin and does not commensurate with the hike in the price of their produce. Khera (2009) said that, the Right to Food (RTF) act would have to build on four major types of interventions: nutrition schemes for children, the PDS, social assistance for vulnerable groups and other interventions and these interventions in rural areas are best seen as complementary to the NREGA. Kohli (2009) indicated that the major problems in implementation of the MGNREGA were definition of a household, denial of registration, delay in distribution of job cards, unsolicited fees being charged for work application forms, non-issuance of receipts, absence of worksite facilities, non-availability of muster rolls at the worksites, shortage of staff and delay in appointments, stopping of works, disruption due to imposition of election code of conduct, delay in wage payments, payment of less than the minimum wage. Maulick (2009) recorded some failures related to MGNREGA in Uttar Pradesh such as delay in distribution of job cards, wrong selection of beneficiaries, needy households unreached, lack of professionals, under staffing, administrative delays, lack of peoples planning, poor quality of work undertaken and poor social audit process. Pattanaik (2009) has analyzed the utility and efficiency issues of implementation of MGNREGA in Hosiapur district of Punjab. In the study area only 5.56 per cent of the household had received full 100 days of employment. Paucity of funds, inability to identify the works and lack of awareness among the panchayats were the main responsible factors for the lapse. More than 90 per cent of the beneficiaries of the MGNREGA were belongs to schedule castes and the workforce participation rate of women in MGNREGA was 37.78 per cent. Tripathi (2009) studied that the payment delay was a common complaint in Asti village which is why the half completed kuchcha road being laid under the scheme looks deserted these days. There were also complaints of caste and communal bias in enrollment. However, the ambitious project has made an impact in District such as Barabanki, where activities have been able to mount pressure on the administration to act. Gopal (2009) argued that National Rural Employment Guarantee Act had achieved much less than advertised and they had ignored many important aspects of implementation of NREGA. The social audit process had a long way to go before it can claim to have contributed to transparency, empowerment and good governance.

Adhikari and Kartika (2010) revealed that all the studies conducted in different places revealed that problems like corruption, use of machineries and use of contractors for the completion of work, delayed payment or payment not made are common in any of the employment guarantee programme. Argade (2010) found that the operational problems perceived by peoples representatives during the implementation of MGNREGS were illiteracy of people, absence of village monitoring committee and lack of co-operation and conflicts between groups of people. He further reported that allocation of less number of works through Gram Panchayat and limited work activities to be under taken in MGNREGS, inability to ensure 100 days employment guarantee, diversion of MGNREGS fund for other works by block authorities, lack of trained technical staff at village level and corruption at block and district levels. A study by (Banarjee and Saha, 2010) on NREGA in Chhattisgarh concluded that lack of awareness about various provisions of the Act proved to be a major impediment in its implementation. Further, unawareness about the process involved in job application was rampant. In particular collecting receipts after applying for the job was not known to the villagers at all. Insufficient resource was another cause of impediments to implementation of NREGA Chhabra et al., (2010) in his study reported that untimely payment of wages by gram panchayat and banks and time taken in releasing funds to the gram panchayat were the major problems existing in proper implementation of MGNREGS. In addition to these problems, inadequate staff, difficult procedures adopted for measurement of works, criteria fixed for selection of works and provisions for payment of wages through bank/ post office were also adversely affecting proper implementation of the programme. Raman (2010) noticed that the problem on the worksites is apparent that very few civil society institutions really monitored MGNREGS and there were not enough programme officers. Shah and Mohanty (2010) observed that 18-23 per cent of the households reported that the scheme has resulted in scarcity of labour during peak agricultural season and also administrative delays in starting the work. Continuity and more importantly predictability, seasonality and transparency in payment remained as teething trouble at least during the initial phase of implementation of the scheme.

Pradeep Hadke (2011) reported that some shortfalls in the implementation of MGNREGS which included delay in distribution of job cards, presence of contractors, delay in payments, improper accounting of labour days, etc. Prottoy et al. (2011) reported that most of the beneficiaries (63 per cent) complained the delay in wage payment as the prime constraint, followed by nonavailability of regular work (34 per cent) political disturbance associated with MGNREGS works (26 per cent) and lack of special provision for the old persons (21 per cent). Sontakki and Ahire (2011) studied the impact of MGNREGA on Indian agriculture and reported that the tea gardens in Tripura were facing labour shortage with the expansion of MGNREGA in all four major tea producing districts of Tripura, thus absorbing tea garden workers to the extent of 20-22 per cent. To combat the labour shortage problem, the owner of the tea gardens have introduced plucker machines, however it is affecting quality of tea produced, indirectly hampering the tea production in the state. An overview of reviews has concluded that lack of awareness about various provisions of the Act, caste and communal bias, gender biasness, delay in distribution of job cards, wrong selection of beneficiaries, needy households unreached, lack of professionals, under staffing, administrative delays, lack of peoples planning, poor quality of work undertaken and poor social audit process were the major constraints of MGNREGS.