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Mainstream, Vol XLVII No 12, March 7, 2009

National Rural Employment Guarantee Programme: Issues and Challenges

Saturday 7 March 2009, by Jyoti Bhargava, P K Bhargava

Problems of unemployment and poverty are inter-related and both these problems have continued to be acute in rural India. In order to overcome these problems, there have been a number of employment schemes in the past—the Employment Assurance Scheme (EAS), National Rural Employment Programme (NREP), Jawahar Rojgar Yojana (JRY) and Sampoorna Gramin Rojgar Yojana (SGRY). However, most of them have not yielded the desired results and brought security to people’s lives. Under such a situation, the Government of India launched the National Rural Employment Guarantee Programme (NREGP) on February 2, 2006, after passing the National Rural Employment Guarantee Act (NREGA) in September 2005. A distinguishing of the NREGA is that it provides the legal right of employment and has the potential to generate more employment directly and indirectly as also to transform the rural economy.

The NREGA is designed as a safety net to reduce migration by rural poor households in the lean period by providing them at least a hundred days of guaranteed unskilled manual labour on demand at minimum wages as prescribed by the respective States. The adult member of every household, who resides in the rural areas and is willing to do unskilled manual work, may apply for registration of the household for issuance of job card after registration free of cost to each applicant household. Registration will be made for a period of five years and may be renewed from time to time. Employment must be provided to all applicants within fifteen days of receipt of an application and within a radius of five kms from their place of residence. In case employment cannot be provided within fifteen days of receipt of the application, the applicant shall be entitled to a daily unemployment allowance. The unemployment allowance rate for the first thirty days shall not be less than one-fourth of the wage rate and for the remaining period of the financial year, the unemployment allowance rate shall not be less than one-half of the wage-rate. In the event of delay in the payment of unemployment allowance, the recipient is entitled for compensation. Further, if employment is provided outside five kms, it must be provided within the block with ten per cent extra wage to meet additional transportation and living expenses. It may also be pointed out that priority shall be given to women and in such a way that at least one-third of the beneficiaries shall be women.

The following works have been identified in the Rural Employment Guarantee Scheme:

water conservation and water harvesting;

drought proofing (afforestation and tree plantation);

irrigation canals;

renovation of traditional water bodies;

desilting of tanks;

land development;

flood control and protection works including drainage in waterlogged areas;

rural connectivity to provide all weather access;

The Gram Panchayat shall be responsible for identification of projects in the Gram Panchayat area and prepare a development plan as recommended by the Gram Sabha and Ward Sabha. The Gram Panchayat shall maintain a list of possible works to be taken up as and when demand for the work arises. It shall also be responsible for the execution and supervision of works. There can be other implementing agencies as well.

As referred to earlier, the National Rural Employment Guarantee Programme (NREGP) was launched on February 2, 2006 by the Prime Minister, Dr Manmohan Singh, in Anantapur district, and came into effect on April 1, 2006 in 200 drought-prone and backward districts of the country. The programme was extended to 130 new districts from April 2007. Later in the month of September, the Prime Minister chaired a meeting which decided to cover the remaining 283 districts in the country under the NREGP ambit by April 2008. Allocations by the Union Government for the implementation of the programme increased from Rs 11,500 crores during 2006-07 to Rs 12,000 crores for 2007-08 and more than Rs 15,000 crores are reported to be available for the current financial year. It may be pointed out here that the Central Government provides 90 per cent of the fund and the rest is provided by the States. The top five States in terms of spending till April 2007 are Rajasthan (Rs 770 crores), Andhra Pradesh (Rs 544 crores), Madhya Pradesh (Rs 361 crores), Chhattisgarh (Rs 349 crores) and Jharkhand (Rs 270 crores).

While the NREGP has been in its infant stage, the performance of the scheme in various States has by and large been far from satisfactory. Two sets of surveys, conducted by Jamal Kidwai and Juhi Tyagi conducted in the villages of Jehanabad and Arval districts of Bihar reveal several shortcomings of the NREGP: one survey conducted in September 2007 covered ten villages of the two districts and another six villages were covered in March 2008.1 Most of the people in the villages surveyed in Bihar had no clue as to how the work or worksite in their village was determined, though the Gram Sabha is supposed to decide regarding the works to be undertaken under the NREGS. Bypassing the Gram Sabha in making such decisions is in complete violation of the principles of decentra-lisation and local participation, an aspect that is central to the objectives of the NREGA. In addition, the authors reported that job cards and muster rolls were mismanaged.

None of the muster rolls were reported to be ever updated on the work site and the beneficiaries were made to sign on blank muster rolls on the days they received their payment. The Mukhias were later reported to have matched and filled the same figures into both the muster rolls and the job cards. The authors also pointed out that many of the concerns encountered by them in Bihar are also common to other States as evidenced by various agencies.

The performance of the NREGP across the country has been dismal and a CAG report points to a number of lapses. “The key finding of the CAG report is that the delivery of the NREGP has deteriorated significantly even as the programme has expanded. There are two aspects to this. First, an abysmally small portion of the poor people who have sought jobs under the NREGP have actually received employment. In the period April 2006 to March 2007, 10 per cent of all such applicants received minimum wage jobs. Between April and December 2007, the number of actual beneficiaries has dropped to just 3.3 per cent of total job-seekers registered under the scheme. Second, even within the beneficiaries, only a small minority received the full promised deal. Thus, the CAG’s sample reported that the average employment per person under the scheme was 45 days in April 2006-March 2007, whereas this has dropped to just 38 days during April-December 2007. In addition, the CAG has reported that the NREGP is afflicted with corruption and mis-utilisation of funds, as well as inefficiency and unreliable documentation in most of the districts covered by the study. The worst performance in this regard has come from the poorest States of Bihar, Orissa, Jharkhand and Uttar Pradesh. These are the very States that have the greatest need for a comprehensive rural employment scheme.”2

It is also reported that a meagre 37.50 mandays of work has been provided to the job-seeking household against the legal promise of 100 mandays annually.3 Implementation at the national level has also been dismal. Till the end of February 2007, 1.64 crore households have been provided jobs and only 61.5 crore mandays of work has been generated against 164 crore which should have been generated as per the provisions of the NREGA. While the Act binds the States to provide 100 days of employment to every job-seeking household, the situation in actual practice has been far from satisfactory. Andhra Pradesh, where the NREGA was launched in February 2006, has managed to provide employment of just 28.15 days per family. Bihar and Uttar Pradesh could ensure only 33.51 and 26.55 days of work per household, respectively. The States of Chhattisgarh and Jharkhand have utterly failed in using the job weapon to address poverty. Chhattisgarh could provide 44.76 days of work and Jharkhand 36.41 days since the launch. Rajasthan and Madhya Pradesh have, however, performed better: Rajasthan has emerged as the model State, providing 73.68 mandays of work for every household and Madhya Pradesh has also fared better than many other States by offering 61.61 days of work for every household.

While the weaknesses of the programme have been identified and addressed by a number of observers, steps need to be taken to remove the same and strengthen the programme in view of its usefulness. Amongst the various measures, the Gram Panchayat has to play a key role in identifying the possible works with priority to be attended to and a list on that score should be kept updated so that works may be taken up as and when the demand for the same arises. There should be wide publicity of the programme through various modes of demonstration to acquaint such rural households who are likely to be the potential participants and beneficiaries. This will ensure transparency in the system and at the same time guarantee their participation. It has been rightly pointed out that “the disappointing implementation status of NREGA (18 instead of the 100 days in West Bengal in 2007-08) makes it amply clear once more that for any development programme targeted at the poor to succeed, the reins of the programme must be in their own hands”.4 Further, the present structure of the NREGP is not growth oriented. It is designed to provide succour to the most vulnerable sections by providing employment but it does not help them develop skills that will enable them to compete in the market or develop assets which may give them employment on a sustainable basis. Therefore, a skill-training com-ponent should be incorporated in the programme. Additionally, to accelerate the productivity of the rural economy, sound infrastructure, such as adequate availability of power, communication facilities, roads and so on, should also be developed and strengthened.


1. Info-change News and Features, July 2008.

2. Anupam Goswami, ’Jobs for the Poor’, Business India, February 10, 2008.

3. Reported in The Times of India, March 2, 2007.

4. ’Work for All: An Alternative Path of Development’, Mainstream, November 8, 2008, p. 20.

Dr (Ms) Jyoti Bhargava is a Senior Lecturer in Commerce, National P.G. College, Lucknow. Professor P.K. Bhargava is Emeritus Fellow (UGC) and former Head, Department of Economics, Director, IRD Centre, and Dean, Faculty of Social Sciences, Banaras Hindu University, Varanasi.

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