53 Chapter-III DEVELOPMENT GOALS OF INDIA AND ACHIEVEMENTS Indian economy has emerged in recent years as one of the fastest growing economies in the world. Tenth Plan period (2002-07) attained 7.2 per cent GDP against the targeted 9 per cent and during Eleventh Plan period (2007-2011) the present rate of achievement is 8.2 due to global recession. 17 The main growth drive of India is its large size population in the working age group (42.2%). However, this advantage has not been exploited fully so far due obstacles like malnutrition, lack of employment opportunities, illiteracy and poverty among the rural community. Further, India continues to maintain the 119 th rank out of 169 countries in terms of human development for the third year in a row. 18 It has been ranked as the 12 th largest economy by the World Bank in terms of its Gross Domestic Product (GDP) at $785.47 bn in 2005 19 . The contrast is stark and warrants concerted action on the human development front. The Millennium Development Goals (MDGs) serve as an effective benchmark of the country’s performance on the human dimension front. The Planning Commission aims to develop the plans to achieve the set goals. The Government of India claims that the country is on the right track to meet the MDG targets by 2015. The status development goals of India set by the Planning Commission and as a part of Millennium Development is briefly discussed in this chapter. Further various wage employment programmes that were implemented since independence are reviewed to identify the challenges in implementation of those programmes and need for MGNREGA is discussed in this chapter. 17 ABC live, “India aims at 9.5 per cent GDP growth at in 12 th Five-Year Plan”, April 21, 2011 retrieved from http://abclive.in/national/national/239-india-gdp-12th-five-year-plan.html 18 UNDP, Human Development Report 2010:Real Wealth of Nations: Pathways to Human Development, 2010, Fact sheet retrieved from http://hdr.undp.org/en/media/HDR_2010_EN_Cover.pdf 19 http://mail.theindianamerican.com/america.php?start_from=920&ucat=&archive=&subaction=&id=&
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53
Chapter-III
DEVELOPMENT GOALS OF INDIA AND ACHIEVEMENTS
Indian economy has emerged in recent years as one of the fastest growing
economies in the world. Tenth Plan period (2002-07) attained 7.2 per cent GDP against
the targeted 9 per cent and during Eleventh Plan period (2007-2011) the present rate of
achievement is 8.2 due to global recession.17 The main growth drive of India is its large
size population in the working age group (42.2%). However, this advantage has not
been exploited fully so far due obstacles like malnutrition, lack of employment
opportunities, illiteracy and poverty among the rural community. Further, India
continues to maintain the 119th rank out of 169 countries in terms of human
development for the third year in a row. 18 It has been ranked as the 12th largest
economy by the World Bank in terms of its Gross Domestic Product (GDP) at $785.47 bn
in 200519. The contrast is stark and warrants concerted action on the human
development front. The Millennium Development Goals (MDGs) serve as an effective
benchmark of the country’s performance on the human dimension front. The Planning
Commission aims to develop the plans to achieve the set goals. The Government of
India claims that the country is on the right track to meet the MDG targets by 2015.
The status development goals of India set by the Planning Commission and as a
part of Millennium Development is briefly discussed in this chapter. Further various
wage employment programmes that were implemented since independence are
reviewed to identify the challenges in implementation of those programmes and need
for MGNREGA is discussed in this chapter.
17 ABC live, “India aims at 9.5 per cent GDP growth at in 12th Five-Year Plan”, April 21, 2011 retrieved from http://abclive.in/national/national/239-india-gdp-12th-five-year-plan.html 18 UNDP, Human Development Report 2010:Real Wealth of Nations: Pathways to Human Development, 2010, Fact sheet retrieved from http://hdr.undp.org/en/media/HDR_2010_EN_Cover.pdf 19 http://mail.theindianamerican.com/america.php?start_from=920&ucat=&archive=&subaction=&id=&
54
3.1. GOALS OF DEVELOPMENT PLANNING AND MILLENNIUM DEVELOPMENT
Even before independence, the colonial government had established a Planning
Board that existed between 1944 and 1946. India's leaders adopted the principle of
formal economic planning soon after independence as an effective way to intervene in
the economy to foster growth and to achieve social justice. The Planning Commission
was established in 1950. The Planning Commission is responsible for preparation of
Five-Year Plan documents with set goals and getting approval of National Development
Council (NDC) and the Parliament for its operationalisation. Since independence, the
country witnessed Five Year Plans and Eleventh Five Year Plan is due to end by 2012.
The achievements of these plan periods can be judged in terms of reduction in poverty,
unemployment and underemployment.
3.1.1 Development planning for reduction of poverty, unemployment and
underemployment20
First Five-Year Plan (1951-56): At the time of independence in 1947, agriculture and
allied sectors provided well over 70 per cent of the country's employment and more
than 50 percent of the gross national product. The 1st FYP focused, mainly on the
agrarian sector, including investments on dams and irrigation works, land reclamation,
promotion of animal husbandry and other sectors and revival of rural industries. It laid
more thrust on utilising the available labour force productively to tackle the twin
problems of enhancing the supply of goods and services and rising the living standards
of people.
Second Five-Year plan (1956-61): The promotion of non-agricultural activities was
conceived as one of the measures for reduction in underemployment in the primary
sector. It is also to be noted that the first two FYPs laid sufficient emphasis on public
works programmes to create employment opportunities during the lean agriculture
seasons while creating and strengthening the capital stock in rural areas. Despite these
20 Extracts of various Five-Year Plan Documents, retrieved from http://www.planningcommission.nic.in/plans/fiveys/welcome.html and http://indiaonline.in/Profile/Economy/PlanningCommission/Five-Year-Plans.aspx
To achieve the ‘eradication of extreme poverty and hunger’ (Goal-1) in India, the
proportion of people below poverty line must be reduced from nearly 27.5 percent in
2004-05 to about 18.75 by 2015.
Goal-7 aims at ensuring environmental sustainability. As per assessment made in
2003, total land area covered under different forests was 20.64 per cent due to
Government's persistent efforts to preserve the natural resources. The reserved and
protected forests together accounted for 19 per cent of the total land area to maintain
biological diversity. The proportion of population without sustainable access to safe
drinking water and sanitation is to be halved by 2015 and India is on track to achieve
this target. Hence, it is important to know the status of poverty and unemployment
during different plan period at national and state level.
3.2 STATUS OF POVERTY AND UNEMPLOYMENT IN INDIA AND ANDHRA PRADESH
Poverty in India is not merely an economic phenomenon but a social one as well.
The recent body of literature highlights the multidimensionality of poverty and the
heterogeneity of the poor. It also highlights the need to go beyond income poverty by
using indices of human development and overall welfare. While defining poverty, it
needs to take into account other aspects of life, employment, wages, assets, health,
education and other basic needs, which are essential for a quality of life.
3.2.1: Poverty status in India and Andhra Pradesh
Table 3.2.1: Number of Persons Below Poverty Line in India (1973-2004) (In millions)
S.No Years Andhra Pradesh* All India
Rural Urban Combined Rural Urban Combined
1 1973-74 176.21 (48.41)
49.48 (50.61)
225.69 (48.86)
2612.9 (56.4)
600.5 (49.0)
32134 (54.9)
2 1983-84 114.34 (27.31)
50.24 (37.49)
50.24 (29.75)
2519.6 (45.76)
709.4 (42.27)
3228.9 (44.93)
3 1993-94 79.49 (16.64)
74.47 (37.63)
153.97 (22.30)
2440.3 (37.26)
763.4 (32.56)
320.37 (36.02)
4 2004-2005 64.70 (11.2)
61.40 (28.0)
126.10 (15.8)
2209.2 (28.3)
807.9 (25.7)
3017.2 (27.5)
Source: * Human Development Report (2007), Andhra Pradesh, Table No.4.5, pp 40 ** Planning Commission, Eleventh Five-Year Plan Volume III, Table 4.2 Reports,
Figures in parentheses are in percentages
59
For the study purpose, the data pertinent to Rural India and Rural Andhra
Pradesh is considered. The incidence of poverty is measured by the head count ratio
(hcr). From the Table 3.2.1 it is clear that during the 11 years period ending with 2004-
05 rural poverty declined at the rate of 0.8 per cent per annum. Overall, the number of
the poor in rural areas in the country as a whole declined from 2613 million in 1973-74
to 2209 millions in 2004-05 i.e. by just 40.4 million people over a 31 year period. That
means the rate of decline in the number of the poor was 1.3 million per year. There was
deceleration in poverty decline in early 90s. Andhra Pradesh shows that there was a
remarkable reduction in rural poverty which reduced from 48.4 per cent during 73-74 to
11.2 per cent in 2004-05. On the other hand, urban poverty declined from 37 per cent
to 28 per cent during the same period. As in the rest of the country, poverty in the state
significantly dropped from over 30 percent in 1990 to 21.8 per cent in 2004. The World
Bank's (2005)23 estimates show that 80 per cent of India's population lives below the
international poverty line of $2 a day. According to Suresh Tendulker Committee,24
report about 37.2 per cent (40.71 crore) people live below poverty line in India.
About half of the poor are chronic poor in rural and urban India (1999-00). The
poverty and chronic poverty estimates are 28.7 and 13.6 per cent respectively in rural
India. In Andhra Pradesh, these ratios are 11.2 and 4.8 respectively. Nearly 19 per cent
of agricultural labourers, 13.6 per cent non-agricultural labourers and 9.3 per cent of
cultivators are
chronic poor at
national level
where as in Andhra
Pradesh 5.5 per
cent of agriculture
labourers, 7.5 per
23 Retrieved from http://en.wikipedia.org/wki/Poverty-in-India 24 GoI (2009), “Report of the expert group to review the methodology for estimation of poverty”, Planning Commission, Government of India, November.
60
cent of non-agriculture labourers and 2.1 per cent of cultivators are chronic poor. This
suggests that economic instruments may not be sufficient for eradicating poverty and
their efficacy tends to reduce with poverty reduction in the states with high incidence of
poverty among social groups (Radhakrishna et al. 2007)25.
Table 3.2.2: Social group wise and occupation wise distribution of poor (2004-05)
Occupation
Rural India (in %) Rural Andhra Pradesh (in %)
ST SC Others All ST SC OBC Others All
Self-Employed in non-Agriculture
5.3 14.1 17.1 14.4 4.6 10.7 12.9 13.0 10.2
Agricultural Labour
40.9 50.6 30.4 37.6 44.3 55.4 39.9 42.9 45.9
Other Labour 13.1 15.4 10.3 12.1 9.3 12.2 9.9 9.2 10.3
Self-Employed in Agriculture
38.0 16.5 36.6 31.4 32.8 13.0 26.2 24.5 23.8
Others 2.7 3.5 5.6 4.5 8.9 8.7 11.1 10.4 9.8
All 100.0 100.1 100.00 100.0 100.0 100.0 100.0 100.0 100.0
Source: NSSO, Unit level data, 2004-05.
Occupation wise, poverty levels were higher among agriculture labourers and
self-employed in agriculture who constituted about 3/4th of total poor in rural India.
The Table 3.2.2 clearly indicates that agriculture labourers are much more deprived in
Andhra Pradesh than in other states. More than 1/3rd and about half of the agriculture
labour households constituted the rural poor at national and state level respectively.
The share of self-employed in agriculture among the rural poor is 32 per cent national
level but it is 24 per cent in A.P. The poverty among other labourers and among all social
groups is higher in Andhra Pradesh than at national level which indicates the possibility
of participation of these labourers in MGNREGS due to higher wage rates.
25 Radhakrishna, R, K Hanumantha Rao, C Ravi, and B Sambi Reddy (2007), “Estimation and Determinants
of Chronic Poverty India: An Alternative Approach”, Indira Gandhi Institute of Development Research, Mumbai, Working Paper (WP) October.
61
Table 3.2.3: Percentage of population Below Poverty Line by Social Group (Rural) -2004-05
(%)
1993-94 2004-05
State SC ST OBC SC ST OBC
Andhra Pradesh 26.0 25.6 NA 15.4 30.5 9.5
All –India 48.1 51.9 NA 36.8 47.3 26.7 Source: Planning Commission, Eleventh Five-Year Plan Documents, Volume III, Table 4.4, 2008b
Among all social groups, SCs, STs and Other Backward Castes accounted for 80
per cent of the rural poor in 2004-05, considerably more than their share in the rural
population (Table 3.2.3). The Sachar Committee Report (GoI 2006) provides poverty
ratios across socio-religious categories. In their estimates for A.P one can see the
differential levels of poverty for different groups. The incidence of poverty fell
considerably among SCs (from 26% to 15%) from 93-94 to 2004-04 whereas the
incidence of poverty increased among the STs as per A.P. HRD Report 2007. At national
level, the incidence of poverty among STs had fallen from 51.94 per cent in 1993-94 to
47.3 per cent in 2004-05. The proportion of ST population among the rural population
living in poverty has been increasing fast. The increase was mainly because of
comparatively slower reduction in the incidence of poverty among scheduled tribes
((Planning Commission, 2008a)26.
Table 3.2.4: Poverty Lines of A.P and India – Rural (Rs. Per Capita Per Month)
State 1973-74 1983-84 1993-94 1999-2000 2004-05
Andhra Pradesh
41.7 72.7 163.02 262.94 292.95
All-India 49.63 89.5 205.84 327.56 356.30 Source: Various NSSO reports.
Note: Official poverty lines for 1999-2000 were updated for each state using commodity-wise
CPIAL for rural areas and CPIIW for urban areas following the Expert Group Method (1993).
26 Planning Commission (2008b), “Eleventh Five Year Plan (2007-12), Volume III, Agriculture, Rural development, Industry, Services and Physical Infrastructure”, Planning Commission, Government of India, New Delhi, Oxford University Press, pp. 79-103.
62
These poverty lines are estimated using the original state-specific poverty lines
identified by the Expert Group and updating them to 2004-05 prices using the Consumer
Price Index of Agricultural Labourers (CPIAL). The poverty line for Andhra Pradesh was
Rs.163 during 93-94 and it enhanced to Rs.292.95 during 2004-05 against the national
poverty line of Rs.356. This is mainly due to higher subsidies on food grains in the state
(Table 3.2.4).
3.2.2 Unemployment Scenario in India and Andhra Pradesh
Table 3.2.5: Distribution rural population and its growth rate (Millions)
India 82.61 100.555 21.72 108.35 7.75 119.53 10.32 44.70 165.23 25.63 Source: Rao K H (2000), “Changes in the structure of employment in rural areas”, NIRD, pp. 36 and 41. Source: * from NSSO 61st Round
But the number of rural households increased significantly with a decadal
growth rate of around 25 per cent both at state and national level (Table 3.2.6). This is
mainly due to fragmentation of households and increased number of nuclear families.
63
The rural workforce was categorised according to nature of employment. A gradual shift
from casual wage employment to salaried employment was visible both at national and
state level. This was mainly to escape unemployment and underemployment situations.
Table 3.2.7: Distribution of rural workforce according to nature of employment (PS+SS) (%)
Nature of Employment
India A.P.
193-94 2004-05 1993-94 2004-05
Self-employed 58.0 60.2 47.5 47.9
Salaried wage 6.4 7.1 5.2 7.2
Casual wage 35.6 32.8 47.3 45.0
Workforce 100.0 100.0 100.0 100.0 Source: 55th and 61st Round NSSO Employment and Unemployment Survey reports
Further, a comparison workforce distribution between India and AP made and
presented in Table 3.2.7 that indicates high work participation rate in A.P. with a
workforce of 40 million workers during 2004-05. Apart from numbers, the quality of
employment is a cause of concern. All those who were working might not be able to
earn reasonable level of income due to lower wage rates, seasonality, job insecurity,
illiteracy, occupational hazards etc. Moreover, disguised unemployment might still be
prevalent in Andhra Pradesh as in India. About 94 per cent of workforce in the state was
in the unorganised sector (GoAP 2008)27. About 39.4 per cent in the state and 32.8 per
cent of workforce at national level are characterised as casual labour and vulnerable to
uncertainties in labour market.
Table 3.2.8: Estimation of unemployment rates in rural areas (CDS basis)
(%)
State 87-88 93-94 04-05 07-08 87- 88 93-94 04-05 07-08
Male Female
A.P 4.9 5.9 10.0 8.3 9.4 7.0 12.2 9.2
India 4.6 5.6 8.0 8.5 6.7 5.6 8.7 8.1 Source: Rural Development Statistics, NIRD of various years
27 GoAP (2008): “Human Development Report 2007: Andhra Pradesh”, Centre for Economic and Social Studies and Government of Andhra Pradesh, Hyderabad, May, p 53.
64
The labour force will increase by 520 lakhs during the 11th plan period based on
the growth of working age population. So, India has to provide employment to around
1000 lakhs people who mostly live most of them in rural areas28. According to the
Planning Commission assessment, India cannot provide full employment but may to
generate employment to 650 lakhs people to bring down the unemployment rate (CSE
2006).29Table 3.2.8 indicates the (estimated) higher unemployment rates in the state
than at national level for the last four decades. This higher rate of unemployment in
CDS measure indicates prevalence of high seasonal unemployment. Further,
unemployment rate among female is higher than that of male. This is important to note
that the unemployment rate increased during last decade both in Andhra Pradesh as
well as in India. The unemployment rate for males in the labour force of rural India is 85
person days per thousand person days and 81 person days per thousand days in respect
of females (NSSO).30
Table 3.2.9: Average number of days of employment per rural worker: Sex-wise
S.No State 2004-05
Males Females
1. Andhra Pradesh
213 200
2 All India 212 191 Source: 61st Round NSSO Report No 515, Employment and Unemployment situation in India,
July 2004-June 2005
Table 3.2.9 indicates that the employment days for male were marginally higher
compared to female at the state level. The days of employment for both male and
female were less than the required both at state and national level. Hundred days
employment under MGNREGS provides additional 25-30 days of employment to each
adult member of household with 3-4 workers. The decline in unemployment rates
during 2007-08 was mainly due to implementation of MGNREGS in the state.
28 GoI (2008), “Eleventh Five Year Plan Document (2007-12), Inclusive Growth”, Planning Commission, Government of India, Volume 1, Chapter IV, p 75. 29 CSE (2006), “National Rural Employment Guarantee Act: Opportunities and Challenges” Centre for Science and Environment, New Delhi, p.5. 30 NSSO (2008) “64th Round NSSO” Report No 515, Employment and Unemployment situation in India, National Sample Survey Organisation, Government of India, July 2007-June 2008.
65
Table 3.2.10: Average wage earning of casual labour in rural areas (Rs./day)
S.No State /UT 2004-05 2007-08
Male Female Male Female
1. Andhra Pradesh
56.21 33.33 81.69 55.02
2. All India 59.29 37.97 75.30 51.17 Source: NSSO, Report No. 522, Employment and Unemployment Situation in India,
62nd Round, July 2005–June 2006.
Though the average daily wage earning increased, the decline in the growth rate
of real wages is a cause for concern. Growing rural wages in real terms is one of the key
determinants of poverty reduction in India. It is a major challenge to provide livelihood
security to the vast number of workers with low productivity and low wages in country.
To summarise that out of 302 million poor, 75 per cent are in rural areas. The
high incidence of poverty is directly related to prevalence of under and unemployment
on large scale. The rural workforce continues to suffer due to excessive seasonality of
employment, lack of wage employment opportunities and low wage rates. Migration of
labour, discrimination between wages paid to men and women, distressed child labour
etc. are therefore, common features of rural areas. To eradicate the problems of rural
unemployment and underemployment a multi-pronged strategy is required. The
strategy and policy of direct attack on poverty by way of target approach for the rural
poor came into being in the Fourth Five Year Plan. Towards this end many wage
employment programmes were being implemented in the rural areas. Status of these
wage employment programmes is presented in section 3.3.
3.3 PERFORMANCE OF VARIOUS WAGE EMPLOYMENT PROGRAMMES IN INDIA
During first two FYP periods the government has gave much emphasis to reduce
the unemployment in the primary sector. The Rural Works Programme (RWP) paid
more attention during third FYP to capital accumulation and generation of employment
as well as raising the supply of wage goods. It was expected that RWP would provide
increased employment opportunities and in the process create productive assets to
66
strengthen the rural economy. It had been proposed to provide employment for an
annual average of 100 days to about 1 lakh persons in the first year and to about 2.5
million persons by the end of the Third Plan Period31.
The Government of India in April 1971 initiated the Crash Scheme for Rural
Employment (CSRE) to alleviate the prevailing conditions of unemployment
underemployment in rural areas. The duration of the scheme was three years. The
Programme Evaluation Organisation’s (PEO) evaluation revealed that the programme
neither generated sizable employment nor provided any guidance for employment
planning. The experience of CSRE indicated the need for more concerted efforts to
tackle the problem of rural unemployment. The Bhagavati Committee on Rural
Unemployment drew attention to this aspect in its report, and recommended the
initiation of the Pilot Intensive Rural Employment Project (PIREP). This was implemented
during 1972 to 1976 in 15 Community Development Blocks situated in various parts of
the country with different economic and ecological conditions. It was an action–cum-
pilot study project on the characteristics of employment in selected areas. Though PIREP
proved to be slightly a better programme as it threw light on certain characteristics of
rural unemployment. The Review Committee pointed out that due to certain
organisational problems, PIREP could not be of much use in evolving a comprehensive
programme for the whole country (Singh, K 2008)32.
Simultaneously, the Food For Work Programme (FFWP) launched in 1976-77,
aims at creation of additional employment in rural areas through utilisation of surplus
food grains available in the buffer stock for payment as wages and thereby to create
durable community assets. FFW was observed to have severe limitations in meeting the
food needs of all the poor in drought prone areas on time, defeating its basic objective.
‘Works’ rather than the food needs of the poor became the focus.
31 NIRD (2010), “Policies and Programmes for Rural Development”, (SRD 503), Chapter 4.1, pp 109-129, Ministry of Rural Development, GoI, Hyderabad. 32 Singh, K (2008), “ Rural Development Policies, Programmes and Management, Sage Publication, New Delhi, Chapter 10, pp. 181-200.
67
The `FFWP' was replaced by National Rural Employment Programme (NREP) in 1981 for
generation of additional gainful employment for the unemployed and underemployed
men and women in the rural areas. The programme was also expected to stabilise the
market wage rates in the rural areas at least to the level of statutory minimum wages.
By spending 25.66 lakh MT food grain along with Rs.3304 crore, about 9432.5 lakh
person-days of employment was generated under this programme. The PEO of Planning
Commission evaluated the programme in 1982 and found that construction of rural
roads accounted for a predominant part of the total value of assets created. It was also
found that the Panchayats had no uniform role in the implementation of NREP in
different states or districts. However, by and large, Panchayat Samities played an
important role in respect of the NREP works in most of the states33.
Rural Landless Employment Guarantee Programme (RLEGP) was launched in
1983 and continued up to 1989, with an aim to improve and expand employment
opportunities for rural landless by providing guarantee of employment to at least one
member of every landless labour household up to 100 days in a year.
During the seventh plan, priority was given to the works that needed to be taken
up in backward areas having a predominant population of unemployed landless labour,
particularly for the SC and ST, and works benefiting women in areas which were low
wage packets. An amount of Rs.2266.3 crore was spent to generate about 353.5 lakh
person-days of employment.
In April 1989, the two on-going employment programmes NREP and RLEGP were
merged into a single employment programme known as the Jawahar Rozgar Yojana
(JRY). The JRY was designed to arrest the seasonality of wage employment and provide a
positive impact on the prevailing wage rates in rural areas. After three years of
implementation of JRY, the strategy was changed for its better implementation by
33 Rao, K H (2000), “Changes in the structure of employment in rural areas”, NIRD, Chapter VIII, pp 170-172
68
providing targeted employment of 90-100 days to unemployed and underemployed
persons.
Employment Assurance Scheme (EAS) was introduced with effect from 2nd
October 1993 in 261 districts in which Revamped Public Distribution System (RPDS) was
in operation. It covered about 1,778 blocks and by 1996 it was extended to all rural
blocks of the country. The primary objective of this scheme was to provide assured 100
days employment of unskilled manual work to the rural poor who are in need of
employment and seeking it. One of the weaknesses observed in the implementation of
the programme was that the provision of employment under the scheme did not focus
on the persons registered for the purpose with the panchayat (PEO 1988)34.
A new programme called Jawahar Gram Samridhi Yojana (JGSY) to develop rural
infrastructure at the village level in a planned manner was initiated. This programme
came into effect from 1st April 1999 and ended by 2002. Since its inception till
November 2002 about 6003.34 lakh persondays of employment was generated by
utilising Rs.5046.26 lakhs35.
Attaining 8 per cent GDP growth per year, reduction of poverty ratio by 5
percentage points by 2007 and providing gainful and high-quality employment at least
to the additional labour force were some of the objectives of Tenth Five-Year plan
(2002-2007). The need was felt that the different programmes for wage-employment in
the rural areas to merge into one comprehensive programme which would take care of
food security, additional wage-employment and village infrastructure at the same time.
With this noble idea, a new Wage-Employment Programme namely the Sampoorna
Grameen Rozgar Yojana (SGRY) was introduced in 2001.
As the SGRY was not sufficient to meet the requirement of additional wage
employment in the most backward districts, it was felt that the additional resources
34 PEO (1988), “Evaluation on Employment Assurance Scheme on the basis of sample from 14 states”, Programme Evaluation Organisation, Planning Commission, GoI, New Delhi 1988 35 Desai, V (2005), Rural Development in India-past, present and future, A challenge in the crisis”, Section 3, Himalaya Publishers House, New Delhi, pp 111-124.
should be channelised into some focus areas like water conservation and drought
proofing which is the principal problem in some states and major cause of backwardness
of certain regions. Some areas are flood–prone and measurers for flood control require
special attention in these areas in a planned manner. The states were finding difficult to
provide state share of funds and therefore a 100 per cent Centrally Sponsored Scheme
(CSS) was proposed so that the investment in backward areas does not suffer because of
lack of resources available with the states. Another new programme called National
Food For Work Programme (NFFWP) was launched in the month of November 2004 in
150 most backward districts of the country. The objective of the programme was
providing additional employment and food–security through creation of economic,
social and community assets in these districts. During 2004-05, Rs.2019.45 crore funds
available for implementation of the programme. However, 28.21 per cent of funds were
only utilised and Rs.785.18 lakh person-days were generated. During 2005-06,
Rs.3604.33 crores funds were available with the states and Rs.1160.83 crores were
spent to generate Rs.1805.19 lakh person-days generated (until December 2005 as
reported by the states). Under the SGRY, about 100 crore person-days of wage-
employment were envisaged to be generated every year and about 264.6 lakh MT of
food grains were utilised during its implementation besides Rs.27756.5 crore were spent
to generate about Rs.28130 lakh person-days of employment36.
Nevertheless, some common problems was observed in successful implementation
of the above wage employment programmes
Little involvement of the local community in selection and implementation due
to top down and central approach
Absence of social monitoring resulted in wastages of resources, leakages, and
corruption
Employment was provided on the basis of availability of funds and willingness of
implementers
Inability to provide minimum livelihood security as there was no guarantee
36 MoRD (2006), “Annual Report”, Ministry of Rural Development, Government of India, New Delhi
70
Delay in wage payment and lack of amenities to workers
Hence, it was felt to have a rights based employment programme for rural workforce.
3.4 RATIONALE FOR MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT
GUARANTEE ACT, 2005
If India’s official poverty line of monthly per capita consumption of Rs.356 in
rural and Rs.593 in urban is taken as benchmark, 300 million Indians are poor. Even
though, the share poor has dropped steadily from 55 per cent in the early seventies to
28 per cent in 2005 what has not changed is the deep rootedness of poverty in rural
areas where three quarters of the poor live (Planning Commission 2008b)37. Persistent
poverty anywhere is said to have created a threat to prosperity of the country. The main
reason for the high poverty in rural areas lies in the fact that India is still largely an
agrarian economy. Of the rural poor, 41 per cent are informal agriculture labourers and
22 per cent are self-employed farmers with tiny landholdings. This also affects urban
poverty as the poorest households in the cities are distress migrants from rural areas
with stagnating farming incomes (Planning Commission 2008a)38. Further agriculture
sector absorbs 52 per cent of labour force but contributes less than one fifth to the
country’s GDP. Labour absorption capacity of agriculture sector slowed down
considerably, form 1.8 per cent annually between 1983 and 1994 to 0.4 per cent
between 1994 and 2005 (Planning Commission 2008a). One main reason for low
productivity of agriculture (per worker) is excess of (underemployed) farming labourers.
As the workforce continues to grow, the earning situation for both landless and land
owning becomes worse. The available land plots (number as well as size) decrease from
generation to generation, the share of land-owning farmers holding less than 1 hectare
of land having risen from 56 per cent in 1982 to 70 per cent today (Planning Commission
2008a). As a consequence, the landowners, in order to supplement their incomes,
37Planning Commission (2008a), “Eleventh Five Year Plan (2007-12), Volume I, Inclusive Growth”, Planning Commission, Government of India, New Delhi, Oxford University Press, 2008, Chapter IV, pp 63-85 38 Planning Commission (2008b), “Eleventh Five Year Plan (2007-12), Volume III, Agriculture, Rural Development, Industry, Services and Physical Infrastructure”, Planning Commission, Government of India, New Delhi, Oxford University Press, 2008, pp 79-103.
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increasingly join the landless in seeking wage labour. People have to resort to
agriculture work because there is no alternative, especially in the form of labour-
intensive, low and semi-skilled manufacturing jobs. Despite unprecedented growth rates
of almost 8-9 per cent in recent years, the manufacturing sector has not generated
enough employment opportunities to absorb the underemployed (surplus) workforce
and its share in total employment has still not reached even to 20 per cent (Ravi and
Engler 2009)39. In this situation, redistribution of economic resource is very essential by
creating employment opportunities to the rural poor. Income employment
opportunities improve the market demand leading to increase economic activities which
in turn enhance the employment opportunities. Policy induced rural work programmes
can be considered as programmatic efforts to generate non-farm employment
opportunities to sustain consumption and income especially during the times of distress.
In the 56th year of the Republic and working of the Constitution, the Parliament
of India passed the National Rural Employment Guarantee Act 2005 towards partial
fulfilment of Constitutional obligation under Article 39 (a) and 41 of the Directive
Principles of State Policy, contained in part IV of the Indian Constitution. NREGA can
thus be construed as a timely intervention for employment generation and thereby
poverty alleviation (Chandranayak et al. 2009)40.
Acts like MGNREGA are very important keeping in view of the types of assets to
be created under it. For example, in India the cultivated acreage is about 156 m ha
(49%) of geographic area. This includes 143 m ha of net sown area and 14 m ha current
fallow. Of the cultivated land, about 53 m ha (35%) is irrigated. The remaining 90 m ha
is rainfed. The forest area is about 68 m ha (22%) and area not available for cultivation
is about 41 m ha which includes urban land. The per capita availability of land declined
39Ravi, S and M. Engler (2009), “Workfare in Low Income Countries: An Effective Way to Fight Poverty? The Case of NREGS in India”, Indian School of Business, Hyderabad, and Centre for Policy Research, Working Paper Series, 16 July. 40 Chandranayak, N, B Behera, Mishra, Paluk (2010), “Appraisal of Processes and Procedures of NREGS in Orissa: A Study of Mayurbhanj and Balasore District”, Indian Institute of Technology, Kharagpur, August.
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from 0.89 ha in 1951 to 0.37 ha in the mid 1990s and is estimated to reduce further to
0.19 has by 2035. As far as agriculture land is concerned, the per capita availability of
land is 0.48 ha. An estimated land of 174 m ha has deteriorated in quality and requires
treatment to restore it to make productive and profitable in use (GTZ 2002)41. One of
the most essential works to be carried under MGNREGA is development of land which
solves the problem in a significant way. In the present scenario of poverty,
unemployment and underemployment and low land use pattern, MGNREGA is much
needed.
To summary of above, all developmental plans focused on agriculture sector for
its increased production because the agriculture is main source of employment in the
country. The reduction in unemployment and poverty mainly in rural India were some of
the primary objectives of five year plans since independence. Further, the set goals of
Millennium Development also focused on reduction of poverty to 18.75 per cent by
2015. India is still lagging behind in the context of human development. Thus poverty
and unemployment are the two major causes in Indian Economy to lag behind.
The low value of labour could be due to the fact that most of the workers are
engaged in unskilled work with low wage rates, mainly in agriculture work. The
Problems of low wage rate, seasonality of agriculture employment, informal nature of
work are some of the causes to the prevalence of large scale unemployment both in
Andhra Pradesh and India. The government took initiatives in the form of wage
employment programmes. Among those programmes, Rural Works Programme (1961),
important in terms of providing employment to rural workforce. Owing to centralised
nature of these programmes, their performance was not up to the expected level and it
was felt that there should be rights based and demand led wage employment
41
GTZ (2002), “Principles and practices of integrated watershed management in India, Indo-German bilateral project: Watershed Management”, Gesellschaft fur Technische Zusammenarabeit (GTZ), New Delhi, pp 1-2.
73
programme would be effective. In brief one can say that MGNREGA is continuation of
earlier wage employment programmes aiming to eradicate poverty and unemployment
by providing legally guaranteed 100 days of employment to each rural household.
Nevertheless, this ‘Rights Based’ intervention is conceptually and quantitatively
different from the earlier ones. Hence, it is essential to estimate the performance
MGNREGA at macro and micro level to estimate its impact.