-Live Mint
This week marks the completion of six years of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Six years is not a long period of time for any meaningful evaluation of a programme of such nature. However, even within this short period of time, the programme has attracted considerable attention. One part of this is the criticism of how the programme involved considerable leakages, did not create productive assets and, above all, failed to have any significant multiplier effect on the rural economy. While some of these arguments are valid, they were based on early trends. Recent evidence suggests considerable improvement in the performance of the programme.
By official statistics, 52.5 million households have benefited from MGNREGA in April 2009-March 2010 of the 113.2 million households that have been issued job cards. A total of 2.83 billion person-days of employment were generated in 2009-10. In fact, 51.2% of the total person-days generated were accounted for by extremely underprivileged and socially ostracized households. The percentage of women in the total person-days generated was 49%. These are impressive statistics by any standards. Apart from numerous field studies and micro-studies of the programme, some information from the National Sample Survey Office (NSSO) is also available for 2007-08 as well as 2009-10. According to NSSO, total employment generated by public employment programmes in 2007-08 was 1.02 billion person-days, while the total employment created by public works in 2009-10 was 1.88 billion person-days.
How does it compare with the pre-MGNREGA days? Employment generated by public employment programmes in 2004-05 was 240 million person-days. That is, employment generated increased by 4.2 times in 2007-08 compared with 2004-05. By 2009-10, it had increased by almost seven times.
NSSO surveys also give information on wages received by workers working on public works and private works. Average wages received by MGNREGA workers were Rs.90.93 for male workers and Rs.87.20 for female workers. What is also remarkable is the almost negligible wage differential between male and female workers when compared with the wage differential that existed in public work programmes in 2004-05. However, it is worth pointing out that the wages received by MGNREGA workers are lower than the wages received by workers on other public works or private casual wages.
The fact that MGNREGA has not only managed to reduce the gender wage differential but also created substantial employment for the vulnerable and marginal sections is sufficient proof of its success. This is further magnified when seen in comparison with the overall employment creation in the Indian economy, which has grown at the rate of more than 8% per annum in recent years, but created a paltry one million additional jobs during 2005-2010.
The debate on MGNREGA’s success is, however, settled. One does not have to sift through reams of data to prove this. This is evident from the various pronouncements of the government and its critics—who now blame MGNREGA not only for the leakages and the poor quality of assets created, but for everything else that has happened in the recent past. This includes blaming MGNREGA for the increase in rural incomes and wages, the runaway inflation of last three years and, above all, the shortage of wage labourers in agriculture and construction. Mercifully, so far, MGNREGA has not been blamed for the 2008 recession.
But it is this success which may turn out to be the undoing of MGNREGA. There are demands that MGNREGA be withdrawn altogether, or suspended for some years, or at least for some duration every year. But even more dangerous is the demands for freezing the wages of MGNREGA workers or, at the least, index it to consumer price inflation. This has already been accepted and implemented by the Union government with a notification overriding the state minimum wages, even though the Karnataka high court has held it to be illegal. Not only is this a dangerous step, but is also regressive in its intent as far as the goal of the right to employment is concerned.
Moreover, blaming MGNREGA for runaway inflation, upward pressure on wages and labour shortages is neither based on logic nor on a meaningful interpretation of data. In fact, for MGNREGA to work as a pull factor for private wages, it has to have wages higher than those that prevail in the private sector. This incidentally was not the case in 2009-10.
In fact, in real terms, while private casual wages increased at a rate of more than 4% per annum, they declined in the case of public works. That is, real wages in public work programmes are lower than what they were in 2004-05. Secondly, despite the eightfold increase in public employment, MGNREGA accounts for only 2% of the total person-days of casual workers. These are almost negligible in poorer states of Bihar, Jharkhand and Orissa—the usual originating points of migrant labour.
Given the evidence available from primary surveys and large-scale secondary surveys, the blame game is nothing more than a ploy to kill MGNREGA.
