PUBLIC FINANCE

GROUP ASSIGNMENT-1

“SOCIAL SECURITY SCHEME COMPARISON FOR

TWO STATES”

SUBMITTED TO:
PROF. DHYANI MEHTA

SUBMITTED ON: 18TH MARCH, 2018

SUBMITTED BY:
CHIRAG PUGALIYA (171413)
PUSHKAR MUNDADA (171443)
 CONTENTS
OBJECTIVE OF THE REPORT..................................................................................................................... 3
WHY MNREGA? ....................................................................................................................................... 3
NATIONAL RURAL EMPLOYMENT GUARANTEE ACT 2005 ...................................................................... 3
INTRODUCTION: .................................................................................................................................. 3
AIM:..................................................................................................................................................... 3
FEATURES: ........................................................................................................................................... 3
MAHARASHTRA ....................................................................................................................................... 4
BIHAR ...................................................................................................................................................... 5
COMPARATIVE STUDY:............................................................................................................................ 7
WORKS OUTCOME: ............................................................................................................................. 7
ON THE BASIS OF COMPLETION RATE:.................................................................................. 7
IMPACT: POSITIVE EXTERNALITIES ...................................................................................................... 8
WORK OPPORTUNITIES ....................................................................................................................... 8
CONCLUSION........................................................................................................................................... 9

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Objective of the report
• To understand the social security scheme implementation by two states of India and thus,
conduct a comparative study for analysis.

Why MNREGA?
• We have selected MNREGA scheme for study as it is one of the pioneer scheme of Government
of India since independence.
• Even world bank has recognised it as “stellar example of rural development”
• Recognised world-wide as one of the “largest and one of the most ambitious social project”
adopted by Government for welfare of its public.
• Implementation of electronic fund management system and Direct benefit transfer

National Rural Employment Guarantee Act 2005

Introduction:
• It was proposed by P.V. Narasimha Rao in 2006 but was finally accepted in the parliament in
the year 2008 and commenced implementation in 625 districts of India. Based on this pilot
experience, NREGA’s functioning was scaled up to cover all the districts of India from 1 April
2008.
• Also known as "Mahatma Gandhi National Rural Employment Guarantee Act". It is an act and
a social security measure which was introduced by Indian Government in the year 2005 with
main objective of ensuring ‘right to work’ to citizens of the India who fail to find employment
opportunities.

Aim:
• To enhance livelihood security in rural areas by providing at least 100 days of wage
employment in a financial year to every household whose adult members volunteer to do
unskilled manual work.
• To ensure work opportunities to applicant in the radius of 5 Km around their homes.
• To build-up structures such as tube wells, canals, wells, canals, etc for public welfare.
• To provide the work opportunities to applicant within 15 days of filing the application or else,
provide them allowances such as “unemployment allowance”.

Features:
• Labour intensive projects are implemented to generate maximum employment opportunities.
• Selection is based on the necessity of the additional income for an individual.
• Participatory planning results into involvement of the people from the locality itself as a result
more comprehensive planning could be done and thus, proper implementation also takes place.
• Involvement of Contractors is banned in the scheme and Social audit is conducted.

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MAHARASHTRA
• The state was allocated Rs 1238 crore from the centre as funding for the scheme whereas state
Government allocated Rs 474 crore.
• The funding was not sufficient as a result a loan from state Government was taken.
• Of the total expenditure, 75% was incurred in the form of Wages.

• Recently the state was facing severe drought conditions hence, the focus was mainly on
building the tube wells, irrigation wells, etc. Draught proofing activities such as afforestation,
check dam construction was taken up to collect and save the water.
• The state’s main aim is to dedicate 60% of the resources for agricultural activities and
supportive infrastructure.
• The districts which have the below 60% allocation for agriculture and allied activities such as
Jalgaon, Solapur, Palghar, Akola, Osmanabad, etc. are advised to undertake natural resource
management work to ensure the development of agricultural activities in the region.
• The state is also planning to promote sericulture and horticulture in order to reduce the
dependence of people on agriculture for their daily livelihood.
• Almost 2.45 lakhs of work are pending to be completed. State is take measure to ensure that it
gets completed as soon as possible.
• The state is also implementing asset geo tagging and mapping of the assets that are being built
up under the scheme.
• The state organises “Gram Rojgar Diwas” regularly to ensure a beforehand information about
the demand of work and employment. So that proper planning could be done.

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BIHAR
• The state received Rs 1024 crores from the central Government whereas the state Government
allocated Rs 124 Crore for the implementation of the scheme.
• Of the total expenditure, 67% expenditure was incurred in the form of wages.

• The state undertook mainly following types of work for the natural resource management:
Check dams, irrigation work, renovation work, farm ponds, etc.
• State adopted ‘phone calling’ to ensure the proper functioning of the schemes. Calling was
mainly done by monitoring team followed by meetings as when required.
• Bihar also focused on agriculture and allied activities and aimed at maintaining at least 60%
statutory limit. Currently it was at 44.34%.
• The state has setup up “Bihar Rural Development Society’ for proper functioning of the scheme
within the state. The main role of this body was to ensure proper planning, execution and
monitoring of the MGNREGA. The head of the body was the Development Commissioner of
Bihar. The body has various functional departments such as Finance, Human Resource, IT,
etc.
• Rules and regulations were formulated for the projects to be undertaken. For E.g.: Project
costing up to Rs 5 lakhs would be sanctioned by Gram Panchayat and projects costing above
it would be sanctioned by Program Officer at block level.
• Inspections were done on every second and the fourth Wednesday of the month.
• Special focus had been kept on following areas:
o Social Forestry
o Water Conservation work
o Training of MGNREGA Manpower
o Transparency and accountability
o Monitoring and Evaluation
• A planning exercise known as “Hamara Gaon Hamari Yojana” was incorporated to ensure the
stakeholders of the respective place are involved in the planning of the projects to be
undertaken. As a result, a dynamic and customized approach was used by each and every
operational unit of the scheme.

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• Efforts and Outcome of “Hamara Gaon Hamari Yojana”:
o 71000 persons were trained.
o MIS were used. All the data was digitised to maintain transparency in the system.
o Democracy was strengthened in the respective regions.
o Inclusive growth. People from all the sections of the society got opportunity to work and
grow.

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Comparative study:

Works Outcome:
Sr Work Maharashtra Bihar
No. Completed Area Completed Area
works Benefitted works Benefitted
(in hectares) (in hectares)
1 Water Conservation 15838 152159.8 30 6040.74
2 Watershed Management 167 4320.08 63 221.63
3 Irrigation 285 241.05 2432 985.7
4 Water bodies 1729 3524.21 899 427.71
5 Afforestation 1758 3672.59 4470 1910.07
6 Land Development 2182 2288.05 4336 1129.69
TOTAL 21939 166205.80 15230 10715.5

o Total 21939 projects were undertaken by Maharashtra in the above mentioned six categories
whereas Bihar undertook 15230 projects.
o Maharashtra undertook more works of water conservation, watershed management, water
bodies because it was hit with draught severely. Hence under natural resource management,
water was the key concerned natural resources for them.
o Whereas Bihar took more projects in the category of afforestation and land development.

On the basis of completion rate:

Maharashtra Bihar

o If we compare the two states on the basis of the completion rate of the project works, then Bihar
is way too ahead of Maharashtra.
o Since inception of MGNREGA, Bihar has a higher completion rate i.e. 69% as compared to the
55% completion rate of Maharashtra.

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Impact: Positive externalities

Sr. No. Work type Number of HH Number of HH

benefitted in benefitted in
Maharashtra Bihar
1 Improved productivity of land 683 3371
2 Improving livelihood 10985 79930
3 Development of waste land 0 0
4 Construction of homes 38 36705
5 Promotion of livestock 25605 15367
6 Promotion of fisheries 0 131
7 Total 37311 135504

o If we compare on the basis of positive externalities caused by the project works under
MGNREGA, then Bihar is ahead of Maharashtra.
o Bihar benefitted 1,35,504 households registered under the scheme whereas Maharashtra be
fitted only 37,311 households registered under the scheme.

Work Opportunities

Sr No Particular Maharashtra Bihar

1 Total Person days per HH (in lakhs) 763.52 702.64
2 Average person days per HH (No. of 60 45
days)
3 Average wage per person days (in Rs) 175.43 177
4 HHs provided at least 100 days of 218454 63526
employment (17.09%) (4.10%)

• Both the states are creating approximately equal working opportunities in terms of total person
days per household. However, Maharashtra is slightly better.
• Maharashtra has been successful to provide work to 17.09% households as declared under
the scheme whereas Bihar has been only successful to provide 4.10% households working
opportunities only.
• On an average Bihar paid Rs 177 per person days whereas Maharashtra paid Rs 175.43 per
person days.

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CONCLUSION

• Maharashtra has been more successful than Bihar if we compare on the basis of the complete
fulfilment of the declared promises under the scheme. As Maharashtra provided 17.09% HH
the complete 100 days working opportunity in comparison to the Bihar which provided only
4.10% households complete opportunity.
• However, in terms of social benefits Bihar outpaced Maharashtra. As it created positive impact
on more than 1,35,000 people. On the other hand, Maharashtra created positive impact for only
37,311 people.
• Bihar outpaced Maharashtra in terms of work completion rate. Bihar completed 69% projects
and Maharashtra completed 55% projects since inception.

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