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Report on impact of MGNREGA on
employment, migration and income
patterns of indigenous tribes of Gujarat
By Shivendra Sharma (M.A Eco), roll. No. 363
Certificate
This is to certify that the project report entitled Report on impact of
MGNREGA on employment, migration and income patterns of
indigenous tribes of Gujarat
Submitted by
Shivendra Sharma
Of M.A Economics, roll number 363
Is the bonafide work carried out by the ward under the supervision
of Dr. Pradeep Apte and Dr. (Mrs.) S.L Matkar is approved for the
fulfilment of the requirements of the University of Pune, Pune for
the Master of Economics.
This project is the original work of the ward and has not been copied
from any report. The references are duly acknowledged and the
same has not been submitted for any other purpose.
Prof. S. L. Matkar,
Head of Department,
Department Of Economics,
Fergusson College, Pune
Abstract
A plethora of well planned schemes and programmes, meant to
generate gainful employment have existed ever since India became
independent 67 years ago. Advanced eradication of unemployment
that has been plaguing the country ever since started as late as
1970s with passing of schemes like the Maharashtra employment Act
passed in 1979 and some minor programmes initiated by the central
government. The employment Act of Maharashtra was revolutionary
because it included ‘right to work’ and gave a legal recognition to the
targeted people. Years passed and the government launched even
more ambitious programmes and schemes like Indira Gandhi Rural
development Programme (IRDP) and National Rural Employment
Programme (NREP) that aimed high on eradicating the chronic
unemployment.
However, related studies and researches showed a total failure of
these programmes. IDRP and NREP that were a union of various
programmes holding similar objectives were failing in showing
results due to poor implementation and loopholes (details which can
be seen further in part I of the project). Most of the statistical studies
pointed to a more-than-expected poor performance.
In view of this, the UPA government passed the MGNREGA in 2005
that was revolutionary in its own sense; that its provisions were such
that implementation had to be better than the previous
programmes. It’s like forcing certain compulsions upon the officials
or they’ll be answerable to law. Though NREGA proved to be much
efficient, its validity upon delivering what it intended had to be
observed from a close angle. This project tries to observe some of
the basic criteria that an employment generating scheme has to
achieve through some simple regression applications.
The project is divided into three parts; part I deals with a history of
employment in India and the steps the government has taken to
eradicate unemployment in India. Part II explains in detail the
provisions of NREGA and how it distinguishes itself from the rest of
the programmes and Acts. Part III includes some econometric
applications that are necessary to observe the real effects the Act
has had on selected random samples.
Introduction
The MGNREGA that stands for Mahatma Gandhi National Rural
Employment Guarantee Act was passed in the year 2005 by the UPA
government. India is a major developing economy that suffers from
chronic unemployment and disguised employment that are
characteristic of any third world developing economy. In such
circumstances, the central and state governments have in the last 40
years passed laws and initiated programmes that were meant to
eradicate unemployment once and for all.
Although these programmes like IRDP and NREP were very ambitious
and well intentioned, studies done by researchers and policy makers
pointed out to a failed system of implementation where objectives
were being totally ignored and instead only personal gains were
being considered. Thus, the vicious nexus of the local village leaders
at panchayat levels and the more powerful officials and politicians
formed that led to widespread corruption, scandals and
implementation loopholes that only led to more failures. The
percolation effect on the targeted populations was found to be
almost zero.
Consequently, these programmes were reviewed by different
committees and policy experts to look into the reason why they
failed and their replacements by more efficient laws. Thus, the
NREGA came into existence in the year 2005 as a direct result of the
heavy criticisms these programmes faced. It was quickly spread to
the whole of India except the state of Jammu & Kashmir and since
then has received a lot of positive feedback, perhaps the only
employment generating law that has received positive views from
the general public, the beneficiaries and researchers. As we shall see
it in detail, the NREGA has well planned provisions that allow
accountability, transparency and a sense of justice to be served to
the poor people. Meant to generate employment, it was also meant
to generate a sense of purpose. However, like every other law is
imperfect, NREGA too might have certain loopholes. As we will see in
part III where some econometric applications have been done to test
the results, NREGA has had success in uplifting the tribal workers,
but only at subsistent levels. Incomes have increased but at levels
that are still debated. Whether the jobs these labourers do in urban
areas are more paying due to higher wages they include or is it
better to be a NREGA beneficiary? Though there is certain thinking
among individuals that NREGA has had success in changing the
migration pattern, our results pointed out to a more or less the same
migration pattern. As far as employment opportunities are
concerned, NREGA definitely delivers higher in that the provisions of
NREGA are humble and take care of the labourer’s financial situation
as also cater to the needs of labourer families.
Objectives of the study
Following are the objectives of the present study:
 To look into the quality of implementation of NREGA in the
selected districts.
 To comment on the income and migration patterns that are the
central theme of this project and how NREGA has affected
these two through simple econometric applications.
 To conclude the study with a comparison of the districts and to
comment whether NREGA differs in terms of implementation.
Sources of data
Following sources of data were referred during formulating the
study:
1. The Indian economy (latest edition) by Dutt & Sundaram.
2. The economic survey, government of India (2011-12).
3. Secondary data provided by the Labour Ministry, government
of India.
4. Secondary data provided by Forest department, government of
Gujarat.
5. Primary data collected through individual initiative.
Hypothesis
Our null hypothesis H0 states that NREGA has had a significant
impact on incomes, migration and employment patterns of the
selected tribal sample of Gujarat.
Alternatively, the hypothesis that NREGA has had no impact on the
above mentioned criteria is to be treated as alternative hypothesis,
H1.
Table of contents
Part I – Indian economy and employment generation ____ 1
Employment in India – an introduction________________________________________ 2
Employment policies prior NREGA ______________________________________________ 5
Employment Guarantee scheme of Maharashtra________________________________________6
National Rural Employment Programme ________________________________________________8
The Rural Landless Employment Guarantee Scheme____________________________________9
The Integrated Rural Development Programme ______________________________________ 10
Jawahar Rozgar Yojana_________________________________________________________________ 13
Concluding Remarks ____________________________________________________________________ 15
Part II - The NREGA and methods for assessing the
impacts __________________________________________________________17
Introduction to NREGA ___________________________________________________________18
Provisions of schedule I _________________________________________________________________ 20
Provisions of schedule II_________________________________________________________________ 21
Differentiating features of NREGA______________________________________________________ 23
Assessing impact of an Act_______________________________________________________24
Methodology for assessing impact______________________________________________________ 26
Gujarat – history, economy and NREGA _______________________________________28
History of Gujarat _______________________________________________________________________ 29
The modern day Gujarat ________________________________________________________________ 30
Economy and NREGA in Gujarat________________________________________________________ 30
Part III – Assessing and comparing the impact____________33
Assessing NREGA in Sabarkantha district ____________________________________34
Assessing impact on incomes ___________________________________________________________ 35
Assessing migration patterns ___________________________________________________________ 45
Assessing impact – Baroda district ____________________________________________48
Assessing impact on incomes ___________________________________________________________ 49
Assessing impact on migration _________________________________________________________ 60
Conclusion ______________________________________________________63
1
Part I
Indian economy and employment
2
Employment in India – an introduction
Employment is necessary for man. It provides the basic livelihood for
survival and living, with the resources that are needed to shelter
from life’s uncertainties. In prehistoric times human beings
employed themselves in hunting and small scale farming and
gathering to stock resources for survival. These resources were then
used by everyone to consume.
Since earliest settlements that were established some 5000 years
ago when Neolithic man carved out stone tools as has been recently
excavated in some ancient districts of Tamil Nadu, what is observed
is agriculture as the main employing force. More advanced
techniques of agriculture cultivation are then witnessed in ancient
settlements of Ropar and Kalibangan- small towns that were part of
the famous Indus valley civilisation. Evidences of extensive rice and
maize cultivation have been found with one barley field still very
much intact at Kalibangan, a small Harappan settlement in Rajasthan.
The Vedic era that followed too was characterised by extensive
agriculture. Early semi-nomadic Vedic people grew wheat and
produced milk products, a legacy still followed in Northern India and
beyond in much of the Central Asian nations. Every major regime
that had its territories on the subcontinent relied on agriculturists for
revenues and taxes. Be it the Mauryas, the Gupta kingdom, Kingdom
of Sakas, the Satavahanas, Mughal Empire or the British, every major
power in India earned revenues only through agricultural produce.
As agricultural produce and revenues in olden times seemed to be
directly linked to employment, in the modern age employment has a
direct link to various macroeconomic indicators that distinguish a
country’s standings- Indicators like per capita income and various
GDP ratios that are so crucial for any economy for its growth
prospects. Any economy that provides gainful employment to its
people is characterised by higher per capita incomes as also higher
GDP ratios. When incomes increase, poverty levels go down and so
3
do other negative indicators like mortality and illiteracy. Employment
also links to socio-economic human development. Better
employment opportunities bring in an industrious, competitive
environment among the people and a cycle of positive growth
initiates that lead to long term development. Highly developed
nations like the U.K, U.S, Sweden, Denmark, Germany and Australia
have very highly evolved employment mechanisms. Such countries
are characterised by highly productive occupations in all the three
sectors. Hence, providing the best possible employment to the
people is a must for any country to look towards growth.
Specifically, employment in India has always been the primary
sector, and it still is. Nearly 65% of the population in modern India is
still working on farms to earn a livelihood. Farmers of various
financial strata could be found, from the richest, affluent farmers
who own acres of land to the most marginalised, poor farmer who
have literally no stake in earning a dignified income.
To make things more clear, referring to government documents
proves to be helpful. Official sources suggest an upward trend in
employment in more productive services; the secondary and tertiary
sectors. But the overwhelming population growth rates have proved
another challenge to Indian planners to first clear the burden of
backlog employment and provide new opportunities to Indian youth.
NSS data shows rise in student population from 20.5 per cent in
1993-94 to24.3 per cent in 2004-05 and further to 26.6 per cent in
2009-10 thus suggesting an increase in demand for productive jobs.
Though employment rates have been modest in recent years, more
still needs to be done to employ the backlog. Further, the economic
survey suggests different rates of employment for Current daily
Status (CDS) when compared with the usual principal subsidiary
status (UPSS) method. For example, for the period 2004-05 to 2009-
10, significantly higher growth rates are observed (1.11 per cent)
than compared with UPSS terms. Similarly, the rates of
4
unemployment increased at a slow pace on UPSS basis and at
relatively higher paces at CDS basis.
Source: Economic survey, 2012-13.
The figure above shows some unemployment rates over periods
1993-94 to 2009-10. Unemployment increased from 6.0 per cent in
1993-94 to 8.2 per cent in 2004-05 but again decreased further to
6.6 per cent in 2009-10. The fall in unemployment despite marginal
increase in employment figures could be due to increasing young
population that opts or better education rather than going in the
labour market. This is reflected by the rise in growth in enrolment of
students in higher education from 49.25 lakh in 1990-91 to 169.75
lakh in 2010-11. More figures suggest a rise in employment in the
organized sector, public and private combined, has increased by 1.0
percent in 2011, as against 1.9 per cent in 2010 as the table below
shows.
1.9 2.2 2.3 2
6
7.3
8.2
6.6
0
2
4
6
8
10
12
1993-94 1999-2000 2004-05 2009-10
Percent
Unemployment over the years
CDS
UPSS
5
Overall employment figures
Sector Employment (in lakhs) as
on 31 march
Percentage change
2010/2009
Percentage change
2011/2010
2009 2010 2011
Public 177.95 178.62 175.48 0.4 -1.8
Private 103.77 106.46 114.52 4.5 5.6
Total 281.72 287.08 289.99 1.9 10
Thus, an overview can be summarised as India experiences upward
and downward trends in employment. What is clearly observable is
an upward trend in employment after 2000-01 as more liberalised
policies are adopted and the observable growth of the tertiary
sector. For a more in depth explanation, we need to dwell more into
brief history of planning in India, specifically towards the approach of
employment generation over the last 6 decades as we see in the next
chapter.
Employment policies prior NREGA
Witnessing poverty and uneducation as linked to underemployment,
the Government of India has been actively passing legislations and
Acts to reduce this chronic obstacle as it has always been a concern
both to the government, the general public and as mentioned
before, poses a major obstacle to the economic development of a
nation. The government started serious poverty and unemployment
eradication programmes after the Bhagwati committee report in
1973. Some initial steps were taken by the government as mention
under:
6
1. The Rural works programme. Under this programme,
constructions of civil works were taken up to temporarily
alleviate unemployment, if not a permanent step by the
government, it might have reduced unemployment figures
while providing shelter for the poor.
2. Marginal farmers and agricultural labourers Programme. Under
this scheme, secondary jobs like dairy, poultry farming fishery,
horticulture operations, etc were provided to those who were
categorised under ‘disguised unemployed’. It meant a shift
from primary, crop cultivation to more yielding farming jobs.
3. Area development scheme. These schemes related to the
development of certain infrastructural facilities. It meant to
provide employment and also to boost infrastructure.
4. Agro-service centres. These were service centres established by
the government to provide guidance and incentives to the
unemployed/under-employed youth who were diploma holders
in mechanical, agriculture and electrical engineering and allied
fields as well as graduates in agriculture machinery, repairing
and hiring facilities, etc.
5. Crash programme for rural employment. This scheme’s primary
objective was to provide works or assets of durable nature, to
be of benefit to the poor strata as also to provide employment
to 100 people in each block for a working season of 10 months.
Various works included irrigation facilities, flood protection, soil
conservation and a-forestation and land reclamation.
Employment guarantee scheme of Maharashtra
The Maharashtra government in 1972-73 introduced its own
employment guarantee scheme (EGS) to give recognition to the
‘right to work’ enshrined in our constitution. It was the first of its
7
kind in the country. It embodied a commitment by the state
government to provide work to a person who comes forward to offer
labour.
Some of its main objectives were:
 Provide productive employment to labourers in approved rural
works which raise productivity of the economy.
 Work undertaken should produce durable assets for the nation.
 Works to be implemented departmentally without any private
contracts. This was intended to check undue/illegal/low wage
payment by the contractors. Instead, 60% of the works
expenditure was done through wages to works while 40% in
the form of materials, food and other supplies.
The scheme was strictly limited to the rural areas and the weaker
sections of rural society who were involved in unskilled labour and
was adhered to benefit the adult population i.e. people above the
age of 18 years.
A review of the scheme reveals its success in the first 10 years when
the expenditure incurred on wage payment and implementation of
various works increased from Rs. 1.89 crores in 1972-73 to Rs. 102.2
crores in 1980-81. However, post 1983, man days declined while
expenditure increased to Rs. 130 crores in 1982-83. As against an
expenditure of Rs. 5.3 per man-day in 1972-73, it increased to Rs.
10.2 per man day in 1982-83.
According to the 8th
plan, “there has been a significant reduction of
unemployment and poverty in the state. Estimates tell a reduction of
unemployment in the state from 7.16% in 1977-78 to 3.17% in 187-
88. Besides, it has resulted in the reduction of poverty from 60.4% in
8
1977-78 to 36.7% in 187-88. The EGS has also resulted in more
women being employed, with nearly 60% of the rural women getting
employment.”
The scheme was a success in most parts of the state with Prof.
Dandekar acknowledging the Act’s approach towards giving
organized employment with government funding and the labourer’s
‘Right to Work’ being recognised by the Act. Notwithstanding such
positivity, it still had loopholes and offered wages at subsistence
levels only. In addition, studies revealed the Act failed to reduce
poverty levels with Maharashtra still scoring higher than the national
average of poverty levels.
National Rural Employment Programme
The NREP was launched on October of 1980. The programme was
implemented with a 50% central funding. An estimated 300-400
million man-days were to be generated each year for the
unemployed and underemployed. Besides, the NREP aimed to create
productive assets like schools and balwadis, rural roads, community
irrigation wells and community centres.
The programme generated some 1,477 man-days as against the
objective of 1500-2000 man-days with a total expenditure of Rs.
2,940 crores, spent in 1985-86 and 1988-89. In other words, the
objective of reaching the targeted man-days was not achieved
despite considerable pumping of funds by the government.
Though well rounded it may seem, the programme suffered from
poor implementation, poor monitoring, non-coordination of
authorities in identifying unemployed/underemployed families,
failure to secure minimum wages and stereo-type construction of
9
famine-era works like kachcha roads, reminiscent of the old pre-
independence days. On the basis conducted by the Indian Institute of
Public Administration, “the employment provided by NREP is for a
very short duration and cannot make a permanent impact. In
addition, the wages offered are lower than the market rates.
Selection of beneficiaries is improper with the poorest of the poor
being left out in the process. Secondly, there is a tendency to go in
for heavy building materials which is contrary to the objectives given
out by NREP. The programme is meant to use local resources for
employment generation and building and not small assets as could
prove to be useful in the long run.”
The Rural Landless Employment Guarantee Scheme
This scheme was launched on the 15th
of August, 1983 with 100%
funding from the central government. Its objectives were to create
productive assets in rural areas and generate gainful employment
and improve the overall quality of rural life.
Resources were allocated to states and Union Territories with certain
criteria decided by the government with 50% weight given to
number of agricultural labourers, marginal farmers and workers and
50% to incidence of poverty. Wages were paid according to the
minimum Wages Act. Part of the wages was to be paid in the form of
subsidized food grains. The programme included many projects of
social forestry, Million Wells scheme and the like. The scheme was
later on merged with the NREP (National Rural Employment
Programme) on the premise that both had similar objectives. Though
not much can be apprised of the programme, the progress during the
7th
plan revealed employment generation of the tune of 1,154 million
man-days.
10
A major criticism of the programme, like the ones before it, was poor
implementation and the failure to significantly reduce poverty levels
in rural areas. The matter lied in improving the efficiency of the
programme rather than indulging in administrative reorganizations
as said by reformists and policy pundits. In this case, the programme
failed due to corruption, non-payment of wages an ineffective
redress system and poor implementation in the most poor areas that
were targeted.
The Integrated Rural Development Programme
The Integrated Rural Development Programme (IRDP) was launched
during the sixth plan (1980-85). It was an admixture of different
employment generating schemes and Programmes, interlinked and
similar in their objectives. These programmes included the Small
Farmers Development Agency (SFDA), Marginal Farmers and
Agricultural Labourers (MFAL), Command Area Development
Programme (CADP), Desert Development Programme (DDP). The
basic fundamental for launching IRDP was to “eliminate the
multiplicity of programmes and to merge them into one identity”
called the Integrated Rural Development Programme.
The philosophy behind IRDP was the failure in some third world
countries to alleviate poverty and unemployment while their
GDP/capita increased. This means that the gap between the haves
and have-nots increased in these countries with the rich becoming
richer and the poor becoming poorer. India, which is no exception,
has seen a polarised development, a flaw pointed out by many
economists during the time when IRDP was launched. The strategy
was to promote self-employment of labourers through creating
productive rural assets so they could cross the poverty line. This was
11
to be done through IRDP. The NREP was to provide wage
employment during sporadic or seasonal unemployment. It also
intended to provide absorptive employment capacities in rural areas
through non-agricultural activities. This also meant creation of
infrastructure, benefitting the economy as a whole.
The programme had massive targets to achieve. Initially, some 5000
blocks over 52 districts were selected, with 600 BPL families. This
meant a figure of 15 million BPL families; with 75 million persons
living below the subsistence levels. For each block, Rs. 35 lakhs were
to be shared between the centre and the states on a 50-50 basis.
Subsidies were to be offered to small farmers (22.5%), marginal
workers (33.3%) and to tribal beneficiaries (50%) on the foremost
principle that the scheme had to reach the poorest families first.
The programme assisted a total of 108 lakh families, 50% being
under the category of SC/ST which was a target achieved. However,
the target of covering 40% women was uncovered at 34%. Suffering
from weaknesses like ineligible selection of beneficiaries, improper
training to unskilled labour and no significant increment in incomes,
the programme worked till April, 1999, after which it was
restructured to Swarnajayanti Gram Swarozgar Yojana (SGSY) which
aimed at self employment of rural poor. Under SGSY, the
government decided to introduce the Family Credit Plan, where
more than one member of the poor household could be given
multiple assets. The idea was to speed up the families’ crossing of
the poverty line. Level of investment increased to Rs.20, 000 to Rs.
25, 000 per family for more assets to family members
A brief critical assessment of IRDP shows the programme did not
percolate its effects on the poor households. There were
12
misclassifications of the 16.5 million beneficiaries as poor. Thirdly, a
very important loophole of IRDP was its non-percolation effect,
mainly due to two reasons
a) Misuse of loans floated by government.
b) Leakage in loans and subsidies thus nullifying the effects.
NABARD in one of its surveys pointed out the unusually high rate of
interest when borrowing the assets provided by IRDP. The
programme provided mostly dairy and agricultural assets like milk
animals, sheep, bullocks and bullock carts, camels and camel carts
for loans given off to beneficiaries. Though the rate of interest was
fixed at 12% for bank loans, the effective rate was 30%-35% due to
existence of transport costs, costs of time, middlemen demanding
minor bribes and out-of-pocket expenses thus nullifying the overall
subsidy amount. Furthermore, the giving away of milk animals was
not a very wise step as food fodder for these animals was not
guaranteed. Their prices also varied according to seasonal variations
in their demand.
Another big critic of IRDP was the improper selection of
beneficiaries. NABARD in one its surveys pointed out that although
IRDP’s main objective is to select and implement on the poorest
families, its inclination in reality has always been towards small and
marginal farmers. In some districts, as much as 30% of the
beneficiary families were small farmers with the poorest unskilled
labourers, farmers and tribes being totally left out. This is because of
the ease by which small farmers have access to credit and the
preference of block officials extending credit to these people.
Another major flaw was widespread corruption in the
implementation process. Sarpanchs and influential members of
13
village communities with collaboration with bureaucrats and officers
used to charge commissions and brokerage to poor villagers for them
to avail subsidies and assets. Lastly, the myth that the programme
was successful in targeting poor families and pushing them above the
poverty line was uncovered by many economists like Nilkanth Rath
who concluded that not more than 18.7% of the targeted families
crossed the poverty lin. In fact, the figure of 18.7% could also be
treated as an over-estimate. The initial figures suggested 47%
families crossing the poverty line of Rs. 3, 500. But these were based
on old prices. If current prices (1979-80) were to be considered, it
was found only 18.7% families crossing the poverty line. Professor
Rath believed that the poor were more interested in incomes rather
petty assets like cows and camels which had no yields. IRDP had no
such long-term provisions for poor families to increase their
productivity and skills. It is unrealistic to believe the borrowing of
loans and credit for small assets could result in increased incomes of
the poor which in turn were assisted by widespread corruption and
malpractices by the implementers.
Jawahar Rozgar Yojana
The Jawahar Rozgar Yojana (JRY) was launched in April, 1989 by the
then Prime Minister Rajiv Gandhi. The NREP and RLEGP were merged
into one entity called the Jawahar Rozgar Yojana. It was similar to
Integrated Rural Development Programme with similar objectives
and implementation procedures. Main objectives were to provide
gainful employment for the rural poor so as to cross the poverty line
and secondary objectives which included forming up of sustained
assets for continuing benefits, subsequently increase the wage levels
and to bring an overall improvement in rural life.
14
The JRY targeted people below the poverty line. Preference was
given to SC/STs and bonded, unskilled labourers. At least 30% of the
employment was to be provided to women. The first stream of JRY
undertook some of the following works:
 Social forestry works on government and community lands,
plantations on road sides and gardens
 Soil and water conservation works.
 Village and its community water wells, canals and assets.
 Community sanitary latrines.
 Construction of rural roads.
 Panchayat ghars, Mahila Mandals, dispensaries, schools and
clinics.
A total of 10.0 lakh wells were constructed with an expenditure of Rs
4, 021 crores by 1996-97. Additional 1 lakh wells were constructed
during 1997-98.
Under the second stream of JRY, the Indira Awaas Yojana (IAY) was
launched as a sub-scheme of JRY. It aimed at providing houses to
bonded labourers and SC/STs free of cost. The government had a
fixed expenditure of Rs. 14, 000 and was enhanced to Rs. 20, 000 per
house in view of the rise in the cost of building materials. A total of
67.5 lakh houses were constructed with a total expenditure of Rs. 11,
324 crores.
Under the third stream of JRY, the Employment Assurance Scheme
(EAS) was launched from 2nd
October, 1993. Special and innovative
projects were launched which aimed at women’s employment,
special programmes through voluntary organizations. Besides, the
15
operation blackboard was undertaken to construct schools in rural
areas.
Concluding remarks
Although the programmes and schemes launched by the government
had been well intended and well planned on paper, on field there
they suffered from poor implementation, corruption, non-
percolation effects, unaware public of such programmes and hot
reap benefits from them, insensitivity of officials towards
deliverance, false statistical studies leading to Faux pas which in turn
worsened implementation, an excessively centralized bureaucratic
system where the officials were least concerned of the performance
of these programmes, and many other reasons. That crores of rupees
have been spent on such programmes, a disappointing truth that
was visible in the last sixty five years of independence that these
programmes have had little to no effects on long term employment
generation. Though they were meant for generating ‘gainful
employment’, only short term, temporary employment was
generated.
India had been suffering from chronic unemployment since the
British days, what was needed was self-sustenance of rural and
remote areas that could provide a long term employment for the
locals and lead to a more long lasting income generation and
livelihood. The programmes failed in this aspect. Further, the assets
created by these schemes can only be judged by their productivity or
the share they contribute towards national income. Much of these
‘assets’ were small or medium entities like tube wells, kaccha roads,
small house for the rural poor, community centres, etc that remain in
16
neglect. Thus, a proper scrutiny only points out to a plethora of failed
programmes.
In the next part, we will observe some of the characteristics of the
National Rural Employment Guarantee Act passed in 2005. How it
differs from the previous programmes and hot it tries to change lives
of the poor that could not be achieved through previous
programmes, will be dealt with in the same part. A brief profile of
the state of Gujarat was necessary to explain for NREGA’s working
differs from state-to-state due to historical, demographic, economic
and various other factors.
In part III, some econometric analysis will be undertaken to look into
the performance details of how NREGA has truly worked and how it
can differ from one district to another leading us to final
comparisons and conclusions for NREGA. Though such research is
not meant to undertake government reporting, some future
measures to improve the efficiency of the Act and how it can stand
distinguished has not been done due to reasons already stated.
17
Part II
The NREGA and methods for assessing its
impact
18
Introduction to NREGA
The National Common Minimum Programme of the UPA government
in 2004 had specifically pledged to provide a National Employment
Guarantee Act that could provide gainful employment to any adult
individual of a family for a legal 100 days of labour on asset creating
public works at a minimum wage. The Mahatma Gandhi National
Rural Employment Guarantee Act (MGNREGA) was subsequently
passed in the year 2005. Extending to the whole of India except
Jammu & Kashmir, it was initially launched in some 200 districts of
phase 1. Some of the main features of NREGA:
 Every household willing to get voluntary employment will get
the right to work for 100 days of guaranteed employment for at
least one adult member. The employment will be in the form of
casual manual labour at statutory minimum wage and the wage
shall be paid within 7 days of work completion.
 Work should be provided with 15 days of demand and within 5
kilometres of residence.
 The state or the central government will hold the responsibility
of securing gainful employment for every adult member of the
household under a scheme for any period beyond the period
guaranteed.
 The state government will fix the wage rates in accordance to
the Minimum Wages Act, 1948. It will be the responsibility of
the state government to specify the different wage rates of
different areas/districts.
 If employment is not provided within the limits/allowance, then
an employment allowance will be given daily which will be 1/3rd
of the exiting wage rate.
19
 In case of hazards encountered or any injury, the government
will give hospitalization charges and a daily allowance of not
less than ½ of the existing wage rate. In case of death of a
worker during work, an ex gratia payment shall be made to his
legal heirs.
 An unemployment allowance to be provided within 15 days if
the worker’s demand of giving employment is not met.
 The district collector will be responsible for the overall working
of the Act in the district.
 The Gram Sabha will be monitoring the work through gram
panchayat by way of social auditing.
 Proper accounts and books of labourers and their wages to be
maintained by every state government. Transparency and
accountability to be maintained by the state governments.
 Wages are to be paid directly to the beneficiaries. This is to
ensure that no middlemen siphon out the funds.
 The Act will be fully amendable by the Central government. All
feedback will be transparent and the government will be open
to all feedback and critic on the grounds that no such activity
will be politically or institutionally targeted.
The NREGA is divided into two schedules. Schedule I deals with
minimum features of the employment scheme while schedule II
deals with minimum entitlements provided to labourers by the Act.
We shall discuss these schedules in brief as they are form an integral
part of the provisions provided by the Act.
20
Provisions of Schedule I (Minimum Features of a Rural
Employment Guarantee Scheme):
This schedule explains the nature of assets, the provisions related to
wage payment and the legal compulsions to the government
regarding payment of wages, maintenance of accounts, preparing
the list of area specific works, periodical inspection of works and
providing any feed back to local officials. Some of the features of
schedule I have been listed in brief:
1.Following works to be the main focus of the scheme:
a. Water conservation and harvesting;
b. Drought proofing including afforestation and tree
plantation;
c. Micro and major irrigation canals;
d. Land development assets;
e. Irrigated land to SC/ST families and families already
under the ambit of Indira Awaas Yojana;
f. Rural connectivity which includes roads and paved
pathways;
2. Creation of durable assets for the rural poor as specified by
the state and central government.
3. There should be a state council to prepare district/taluka
specific works based on the degree of durable assets to be
made there.
4. Wage paid to the labourers should not be less than specified
by the state government, under no circumstances.
5. The wages are to be fixed by each state government in
consultation with the state council for different types of
works every year. Same pertains when wages are according
to the quantity of work done.
21
6. Proper maintenance of the public assets to be a responsibility
of state governments and thus appropriate arrangements
have to be made by the state governments for proper
monitoring of these assets.
7. Cost of projects/works undertaken in addition with the wages
of unskilled and semi-skilled labourers shall not exceed 40%
of the total project costs.
8. No contractors shall be allowed to participate in the project
work under the Act.
9. Adequate provisions for ensuring transparency at all levels of
implementation to exist within the framework. Such
responsibility would be shared both by central and state
governments.
10. The district programme coordinator shall develop an annual
report of the status of the implementation of the scheme in
his district, the works undertaken, wages offered to the
labour according to projects, containing any achievements,
facts and figures of the scheme. This report shall also be
made public on demand at a legal fee as specified in the
scheme.
Provisions of Schedule II (Conditions for Guaranteed Rural
Employment and minimum Entitlements of Labourers)
This schedule contains conditions for the Act to be efficient on
implementation and the entitlements to labourers that form are a
legal compulsion to the state and central governments. Below is a list
of some of the features of schedule II:
1. Any adult member of a household who’s willing to do
voluntary manual work shall submit his/her application to the
22
nearest Gram Panchayat office in the jurisdiction in which
he/she resides.
2. The Gram Panchayat shall register the household after
making enquiry as it deems fit and issue a job card to the
registered.
3. The registered person can request to the number of days of
manual work and every member of the household shall be
entitled to do the manual work wherever applied.
4. Applications for work will be at least for 14 days and there
shall be no time limit as to the number of hours/days for the
applicant to do any work subject to the aggregate
entitlement of the household.
5. As far as possible, the work provided should be in the radius
of 5 kilometres from the village where the beneficiary
resides. In case the work is more than 5 kilometres, it should
be within the block and extra wages of 10% should be paid to
labourers as transportation and miscellaneous costs.
6. The Programme Coordinator of the block shall explain in
writing to the District Programme Coordinator of why
employment has not been provided in some blocks and the
remedial measures undertaken to provide any missing
employment to the labourers. The list of persons provided
with work shall be listed with their addresses and sent to the
Programme Officer.
7. If a person working under the scheme is injured, or is
required hospitalisation, the government shall arrange for
such accommodations as necessary. If encountered with
death, the government shall make an ex gratia payment at
the rate of Rs. 25,000 or any such amount as deem fit by the
23
Central government. The legal heirs of the deceased shall be
paid the amount.
8. Various other facilities like safe drinking water, medical
health boxes, and shades for cover shall be provided at the
work site.
9. The wages shall be paid in the form of cash or direct cash. A
portion of the wages can be paid to labourers on daily basis.
10. No discrimination on the grounds of gender, religion or
caste/creed shall be made while giving out any employment
and the provisions of the Equal Remuneration Act, 1976 will
be complied with.
Differentiating features of NREGA
The differentiating features of NREGA are its main feature that
distinguishes it from older programs released during the 1980s. The
Act was passed by the Union government in 2005 largely due to the
criticisms and failures faced by IRDP and NREP. Though well planned
on paper with well intentions, they failed in showing long term
effects, reasons being many, like scams & poor implementation.
The NREGA has also been well designed, with full legal provisions for
labourers and their families. The main differentiating feature of
NREGA that separates it from the rest is the inclusion of the ‘right to
work’ that seems to be similar to the Employment Scheme of
Maharashtra of the 1970s. The right to work means that the
beneficiary under the Act has the legal right to do any manual work
with its details recorded and open for public scrutiny, get legally paid
that is prescribed by the central government according to the work
undertaken and claim the accorded payment whenever the person
feels it has been siphoned off, has not been paid in due time or any
24
other reason of non-payment. This was a significant step towards
welfare because the ambitious schemes of the 1980s and 70s had no
such legal framework that provided for the labourers to claim their
payment. The result was rampant corruption and siphoning off of
wages.
The idea was that such ‘legal wages’ would be the step towards
increasing the livelihood of the labourers who were exploited or
cheated by officials through siphoning, less payments for
commissions. All such obstacles zeroed out all the well intentions. In
contrast, a beneficiary under NREGA can go to the courts where
officials will have to answer to any of felt their wrong doings.
Further, the wages are directly transferred to beneficiaries’ bank
accounts, thus leading to other positive effects like increase in
savings and number of bank accounts, secure money in labourer’s
hands and banking awareness.
Having looked into the detail provisions of NREGA, we will now
proceed on how an Act’s impact can be assessed.
Assessing impact of an Act
Measuring an Act’s impact can become a difficult task taking into
consideration its entire ambit. A lot of parameters and clichés are to
be taken into account for a proper statistical study to take place. For
example, an Act meant to improve the housing conditions of the
poor will have parameters like the quality of houses they live in,
number of rooms in each house, basic facilities, and availability of
electricity and water that have to be compared with similar
parameters of previous accommodations. If the new houses
provided by the Act show an improvement of living conditions, then
the law could be regarded as a success.
25
But this is only a very arbitrary example. A history of Indian economic
planning shows all our programmes were well planned on paper but
suffered heavily on implementation, feedback, grievance and
miscellaneous aspects. For example, though IRDP and NREP were
ambitious programmes meant to provide ‘gainful’ employment to
the poor every year, statistical studies found employment was
provided on a large scale but with no benefits due to various reasons
already stated above like siphoning off and non-payment of wages,
lack of good legal framework and poor resource allocations. Thus,
the whole intention of the programmes failed, most of the objectives
were not met and the planners were forced to withdraw them
because of their direct relation to increasing deficits on the budget.
To be more specific, to research the impact of an employment
generating Act, one has to scrutinise the following aspects:
 The overall change in the levels of livelihood of the targeted
population.
 Whether it has resulted in changes in incomes, savings, and
expenditures, miscellaneous benefits like new assets, new
lands for cultivation, new housing facilities, and new electrical
appliances like TV sets, radios and computers.
 Whether the Act has resulted in providing long term objectives
like better education, better food products, socio-political
awareness and awareness of rights.
 What kind of employment (long-term or short-term) has the
Act generated on the targeted population? Has it stopped the
long journeys and migrations to other cities that people make
in search of jobs or has it remained the same throughout?
 Employment generation means creation of such assets that
prove fruitful to the economy and to the local population.
26
 A successful Act ultimately results in increased per capita
incomes in the long term.
Methodology for assessing an impact
Various methods could be used to asses and impact. Generally done
through surveys and questionnaires, some specific area is first
selected where a significant targeted population exists. For surveying
NREGA as an example, such blocks of districts should be selected
where significant SC/ST/OBC populations exist as NREGA specially
targets these groups. Then comes the surveying where the surveyor
does a basic research by first formulating certain assumptions of
targeted sample, forms a suitable questionnaire for collecting
information and then conducts the survey through the questionnaire
or any other method the researcher sees fit.
Aspects like living conditions, incomes, primary & secondary
occupations, basic food consumption are some parameters the
surveyor is always interested in while conducting a survey. The
objective of the survey should be to collect suitable information so as
to ascertain any changes made by the Act. Caution has to be
considered while surveying as false information is bound to happen.
Hence, Crosschecking becomes an important part of the study
wherever untrue information exists.
Finally, a comparative study is performed where a selected group of
parameters are compared. Hence for example, if income level of an
individual is to be compared whose been employed under NREP, we
could do that by first stating a general hypothesis pertaining to any
due changes in income levels, comparing those values and
concluding the results. The results have to be unbiased and in such
matters where an Act, law or a government entity is being
27
researched, political neutrality has to be maintained or the
research’s objective is not achieved. The aim of the researcher is to
throw light on the results and not state any criticism.
Taking such views into account, how can one proceed to assess what
NREGA has had on the lives of poor labourers? NREGA is a national
level employment generating Act, meant to provide gainful
employment. Though the Act might seem similar to previous
programmes to a lay man, it differs in aspects that are distinguishing,
so much so that it has resulted in the Act’s idea being mentioned in
several territories outside India. Thus, as NREGA is as big as it seems,
a proper study for national level will require a vast amount of
personnel to bring about a huge research. However, formulating a
local research doesn’t require much of resources to release
comparatively smaller results that could prove helpful not only to
private individuals but sometimes also to government authorities in
providing a feedback. Policies are passed not only as a result of
census scaled research but also due to research provided by private
individuals.
To assess NREGA in our selected districts, it is imperative to first
throw light on the profile of the state of Gujarat. Its history, its
traditions and demography, and economy have to be explained first
for the research to continue. Every region has its own traditions and
history; such factors determine the working of a national Act. Hence,
an employment generating Act will benefit greatly in a region where
significant unemployment exists in contrast to a region where
employment figures indicate good going. In such regions an Act like
NREGA would perhaps become more of a burden due to financial
hogging it requires from the state and central government. Keeping
28
such assumptions to be true, we now proceed to understanding
what Gujarat has to offer in terms of employment generation.
Gujarat – history, economy and NREGA
The Gujarat state is a West Indian province. It was formed on the 1st
of May, 1960 by carving out 17 northern districts of the erstwhile
Bombay state. Located on the Western coast, it has the longest
coastline of 1, 600 kilometres and bounded by the Arabian Sea to the
west and south west and by Pakistan and Rajasthan in the north,
Maharashtra in the South & Madhya Pradesh in the east.
The Capital of Gujarat is the city of Gandhinagar established a brief
time after Gujarat’s independence on the lines of Union Territory
Chandigarh, close to the historical city of Ahmadabad, which also
happens to be the financial capital and the most populous city of
Gujarat (7.20 million). The state has currently 26 districts, 226 taluka,
18,618 villages and 242 towns.
29
History of Gujarat
The state took its name from Gujjars, an ethnic Indo-Aryan people
who ruled the area during the 700’s and 800’s and inhabited till
Afghanistan. Though exact origins remain vague, they might have
been direct descendants of Scythian or the Sakas during the Hun
invasions. There are also ancient structures like Lothal which
belonged to the Harappa civilization. The state was ruled by major
Indian empires and was an active trading hub since Harappan times.
The Scythian tribes who later came to Gujarat were the result of
Mauryan disintegration when the Shungas were unsuccessful in
maintaining political unity. There was also a Greek incursion into
Gujarat led by Demetrius. The greatest extent of Gujarat reached
during the rule of Solankis who were believed to have been direct
descendants of imperial Gujjars. The last Hindu rulers were from the
Solanki clan of Rajputs. Karandev of Vaghela dynasty, the last Rajput
ruler was eventually overthrown by superior forces of Allauddin Khilji
in 1297. Prolonged Muslim rules of 400 years, Muslim invasions of
Mahmud Gazni were major historical incidents. Gujarat remained an
independent province under Muslim sultanates until 1576 when
Akbar took control over the province with a successful expedition.
The province remained under the Mughals till the late 1600s when
there were Maratha incursions under Shivaji. Surat was ransacked by
him. In the later years during declining days of Mughals, Maratha
clans like the Gaekwad rulers took control of the southern territories
of the state and made Baroda their capital, announcing their
independence.
30
Gujarat has always a prosperous province, bringing in lot of revenues
to all the regimes that ruled it. It was the trading hub during Mughals
and also during colonial rule. The cotton of Gujarat was famous the
world over. The Dutch, French, English and Portuguese merchants
had all established trading centres to trade Indian valuables so
prestigious in those times. When the British consolidated supremacy
over other European powers, Gujarat was their major trading port.
Most of the raw materials, merchandise and machines made with
Indian hands were traded from ports in Gujarat. The Calico mills in
Ahmadabad are a testament to the finesse achieved by Indian
artisans in selling clothes that were renowned the world over.
The modern day Gujarat
After India gained independence in 1947, a conference took place in
1948 to merge all the Gujarati speaking areas of Gujarat, Kutch and
Saurashtra into one autonomous province. The term ‘Mahagujarat’
was thus coined to unite the whole of Gujarati speaking areas.
Eventually, on 1st
May 1960, the erstwhile Bombay state was split
into two, Maharashtra and Gujarat. For the first time after the
sultanate, Gujarat became independent.
Ever since, the state has had 16 chief ministers. In 1995, after major
losses to the BJP government, congress stepped down and Keshubhai
Patel came to power. After losing 2 seats in the by-elections in 2001,
Keshubhai resigned and gave way to Narendra Modi who has ever
since been the chief minister.
The economy and NREGA in Gujarat
Gujarat is, like most other states of India, predominantly agricultural
though highly industrialised. The state is ranked the second most
31
economically free state after Tamil Nadu, according to the report by
Cato institute on state economic freedom. Major agricultural
produce of Gujarat includes groundnut, milk and milk products,
sugarcane and cotton. Ahmadabad, Surat, Baroda and Jamnagar are
major industrial cities with Surat as being ranked one of the fastest
growing cities in the world after Chengdu in China. The ship breaking
yard in Alang is the world’s largest. With some staggering indicators
like India’s longest gas line grid (2,200 km), 98.86% of village
connectivity through all weather roads and 98% of highways being
asphalt surfaced, Gujarat is indeed an industrial trading hub. Nearly
100% of Gujarat’s 18,000 villages have 24-hour power connectivity.
The state also records the highest agricultural decadal growth rate of
10.97%. The GSWAN (Gujarat State Wide Area Network) is the
largest ISP in Asia Pacific region and 2nd
largest in the world
connecting 225 taluka through 12, 000 nodes. Noted as the growth
engine of India, the infrastructure of Gujarat is well known to rival
that of Guangdong, the economic engine of china, according to The
Economist.
As for NREGA is concerned, there cannot be a pinpoint conclusion as
to the degree of quality of implementation in the state. However,
some official statistical figures could throw some light on this. For
example, according to NREGA state brief report, the total central
share was Rs. 894.86 Crores in 2010-11, and Rs. 324.29 Crores was
released in 2011-12, a reduction. Likewise, in 2011-12, 570 lakh
person days of employment generation was projected with an
achievement of 311.21 person days. In addition, a total of 38, 16,745
households were issued job cards in 2011-12 against a projected 8,
68,748 households. Of these households that were provided cards,
only 2, 16,796 households got employment. Against the projected 3,
32
02, 71,524 persondays projected, a total of 2, 16, 59,433 persondays
was generated. Considering such staggering achievements however,
only 33, 391 households completed 100 days of guaranteed work,
less than the figure of 41, 442 in the period 2010-11. That is less than
half of the people who got employment and even lesser the number
of people who were issued job cards. This means that certain
amount of wastage of government funds in issuing job cards when
there is no availability of work or rather incomplete work provided.
Gujarat also reports a comparatively lower wage rates compared to
other states. For example, in the year 2010-11, the average NREGA
wage was Rs. 65 as compared to Rs. 100 offered in Haryana, Uttar
Pradesh, Punjab and Rs. 120 in Kerala. It stands on level to states like
Maharashtra and Andhra Pradesh and North Eastern states where
comparatively low wages prevail.
Considering such figures not to be falsifying to the layman, one can
roughly conclude the average implementation of NREGA in the state.
Reasons could be many, though Gujarat has an efficient bureaucracy,
the government is not centrist. It’s a normal phenomenon that
schemes face obstacles when the ruling party in the state differs
from the one in New Delhi.
Concluding part I, we will now proceed to the next session. In part II,
we analyze the impact of NREGA in two tribal districts and test the
Act’s success in bringing about considerable changes. We then
compare the results of the two districts and check which one
performs better. This is to be done to observe any kind of irregularity
in the implementation process in the districts. Lastly, the conclusion
regarding the overall experience of NREGA will be undertaken.
33
Part III
Assessing and comparing NREGA’s impact
34
Assessing NREGA in Sabarkantha district
The northern district of Sabarkantha,
located 73.39° East longitude and 23.03°
North latitude, derives its name from
Sabarmati River that separates the
district from the neighbouring districts.
The district is bordered with Rajasthan
state in the north, Banaskantha and
Mehsana district in the west and
Gandhinagar, Kheda and Panchmahal
district in the south. Himmatnagar is the
district headquarters. Average rainfall
remains low at 500-1000 mm and high
temperatures with maximum being
40.5° C and lowest being 9.09°C. It has a
population of 2,082,531, mostly SC/STs
and OBCs and less density with 282
persons per sq. kilometre. A moderate 67.31% of literacy exists.
The district is heavily dependent on agriculture and Dairy Farming. It
is the highest producer of Cereals, Indian jujube and Pomegranate in
the state. Minerals like bauxite and clay are abundant thus opening
up industries of cement, clay, silica and tiles. Major food crops, oil
seeds, fruits are produced on the district which include wheat,
castor, mango and groundnut, tobacco, mango and pomegranate.
The district consist of some major industries like Sabar Dairy which
supplies milk products in the district, Eureka tiles, Gujarat Ambuja
Exports Ltd., Pathik Agrotech Ltd., etc. Some 8, 000 small scale
industries employing some 34, 200 people are located here. Walls,
35
floor tiles, chemicals, plastic and plastic products, commercial office
and household equipments are some major small scale industries.
The region has rich agriculture and fertile land. Major sections of
society depend on agriculture for livelihood. The district has very
good rail & road infrastructure with 24 railway stations which
connects the state cities and neighbouring state of Rajasthan.
Assessing impact on incomes
Just like we did an analytical
study of Baroda district for the
Taluka of Chhota Udaipur, we
shall observe and analyse the
trends in Sabarkantha district.
The Sabarkantha district is
characterised by tribes that
inhabit large parts of southern Rajasthan and neighbouring districts
in the west. These are mostly Bhil tribes, dominant being Garasias,
Damors, Modias, kolis and Dhodias among others. They are rural,
mostly poor but a lot of them could be found in higher occupations
of government. Some from these tribes get recruited as doctors and
government servants through the state public service commission
and hence distinguish themselves from the southern tribes of
Gujarat in literacy. To analyze some observations, let us look at some
data.
36
Table 1
Yearly incomes (records 1-15)
Table 1 shows yearly incomes of records 1-15 for villages
Gambhirpur, Abhapur and Bandhana. Here, the tribes of Modias and
Garasias exist. We observe a fairly equal wage rates for all records
and also more or less equal incomes earned, unlike in Baroda district
where income disparity exists. The average incomes of this district
are:
0 2,71,440/15 .14,400x Rs 
Record no. NREGA
wage (Rs.)
Yearly
NREGA
income
(Rs.)
Yearly income
without NREGA
(Rs.)
X0
Yearly
Income with
NREGA (Rs.)
X1
1 Rs. 110.00 Rs. 39,600.00 Rs. 43,200.00 Rs. 82,800
2 Rs. 120.00 Rs. 43,200.00 Rs. 72,000.00 Rs. 1,15,200
3 Rs. 115.00 Rs. 41,400.00 Rs. 64,800.00 Rs. 1,06,200
4 Rs. 117.00 Rs. 42,120.00 Rs. 52,200.00 Rs. 94,320
5 Rs. 105.00 Rs. 37,800.00 Rs. 46,800.00 Rs. 84,600
6 Rs. 100.00 Rs. 36,000.00 Rs. 59,400.00 Rs. 95,400
7 Rs. 100.00 Rs. 36,000.00 Rs. 61,200.00 Rs. 97,200
8 Rs. 134.00 Rs. 24,120.00 Rs. 32,400.00 Rs. 56,520
9 Rs. 140.00 Rs. 16,800.00 Rs. 39,600.00 Rs. 56,400
10 Rs. 135.00 Rs. 9,720.00 Rs .23,400.00 Rs. 33,120
11 Rs. 134.00 Rs. 12,864.00 Rs. 54,000.00 Rs. 66,864
12 Rs. 132.00 Rs. 31,680.00 Rs. 36,000.00 Rs. 67,680
13 Rs. 75.00 Rs. 1,125.00 Rs. 39,600.00 Rs. 40,725
14 Rs. 65.00 Rs. 1,300.00 Rs. 36,000.00 Rs. 37,300
15 Rs. 100.00 Rs. 1,000.00 Rs. 50,400.00 Rs. 51,400
Total Rs. 1682.00 Rs.
374,729.00
Rs. 216,000.00 Rs.
885,731.00
37
1 5,71,500/15 59,048x  
This means that there is a notable increase of income of about 4.10
times of yearly income excluding NREGA. Plotting the data, we get
the following curves:
The above figure shows the yearly incomes of the sample excluding
the income earned through NREGA. It is a fairly consistent curve with
incomes ranging from a minimum of Rs. 10, 000 to Rs. 26, 000 thus
pointing out to the poverty levels that exist. All the samples were BPL
families.
When we observe yearly income when NREGA is added, we get the
following curve:
0
5000
10000
15000
20000
25000
30000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
yearlyincome(Rs.)
Record no.
Figure 1
yearly incomes including NREGA
38
What we observe here is increase in incomes, minimum being at the
range of Rs. 22, 000 to a maximum of Rs. 71, 000. Income disparities
do exist between the samples even after NREGA has been added. We
compare the two different incomes through the following curves:
0
10000
20000
30000
40000
50000
60000
70000
80000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Yearly incomes excluding NREGA
0
20000
40000
60000
80000
100000
120000
140000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sum of Yearly income2 (without NREGA)
Sum of Yearly income1 (NREGA+secondary+primary)
39
The above curve shows total yearly incomes of the sample. This
includes NREGA, secondary and income earned by minor agriculture
produce and labour. What do we observe here? Some of the families
earned more, pointing out to the level of disparities that exist. This is
because villagers of one village benefitted greatly from NREGA while
others did not. In analysing 3 villages of the Taluka, 2 of them
benefitted because of regular work being provided and regular
payment of wages. Furthermore, 10 samples of 2 villages were
engaged in farm labour which does not come under NREGA while
one village was solely dependent on a small plantation nursery
where 5 people were surveyed. These villagers of Abhapur village did
not engage in any other work or business.
Though from the above figure one can ascertain major increase in
incomes, we will have to test whether NREGA has had a significant
impact on the incomes of the select sample. For this, we use some
statistical and econometric techniques. We provide data through
statistics while assessing the impact is done through regression
which is an econometric method.
Let us now proceed to assessing the real impact of incomes.
Table 2
Data showing yearly with NREGA and secondary wage income
Record No. Yearly NREGA
income (Rs.)
X1
Yearly secondary
wage income (Rs.)
X2
Total yearly income
(Rs.)
Y (dependent)
1 Rs. 39,600.00 Rs. 43,200.00 Rs.82,800
2 Rs. 43,200.00 Rs. 39,600.00 Rs.1,15,200
3 Rs. 41,400.00 Rs. 64,800.00 Rs.1,06,200
4 Rs. 42,120.00 Rs. 52,200.00 Rs.94,320
5 Rs. 37,800.00 Rs. 46,800.00 Rs.84,600
6 Rs. 36,000.00 Rs. 59,400.00 Rs.95,400
7 Rs. 36,000.00 Rs. 61,200.00 Rs.97,200
40
8 Rs. 24,120.00 Rs. 32,400.00 Rs.56,520
9 Rs. 16,800.00 Rs. 39,600.00 Rs.56,400
10 Rs. 9,720.00 Rs. 23,400.00 Rs.33,120
11 Rs. 12,864.00 Rs. 54,000.00 Rs.66,864
12 Rs. 31,680.00 Rs. 36,000.00 Rs.67,680
13 Rs. 1,125.00 Rs. 43,200.00 Rs.40,725
14 Rs. 1,300.00 Rs. 39,600.00 Rs.37,300
15 Rs. 1,000.00 Rs. 64,800.00 Rs.51,400
Total Rs. 374,729.00 Rs. 700,200.00 Rs. 885,731.00
The above table shows data regarding the total yearly incomes
earned which includes NREGA and secondary or other incomes, total
yearly NREGA income earned and total yearly secondary incomes
earned. To test at what degree the two incomes impact the total
yearly incomes, we will run some regression analysis on the
dependent variable, in this case the total yearly income.
Hypothesis
H0: the total NREGA and secondary income significantly impact the
total yearly income, i.e. 1 2, 0  
H1: the total NREGA and secondary income do not significantly
impact the total yearly income, i.e. 1 2, 0  
41
Calculations
When we run regression for the above known data for total yearly
income on NREGA and secondary income, we get the following
regression line:
The above figure shows relationship between the actual known
incomes of NREGA and secondary incomes with that of the known
yearly income in the form of scatter plot matrix. A scatter plot matrix
explains variables neatly in matrix form. We get these results in
mathematical form:
Yearly income vs. NREGA & secondary income scatter plot
matrix
42
1 2
2
2
1 2
1 2
ˆ 6827.03 1.22 0.77
0.916
0.902
. ( ) 0.14, . ( ) 0.30
( ) 8.30, ( ) 3.736
y
R
R
s e s e
t t
 
 
 
  


 
 
The results show that for any known independent variables 1 and 2
, the wage income increases the total yearly income by Rs. 1.22 while
the secondary wage income increases the total yearly income by Rs.
0.77 only. This means that NREGA is more significant in contributing
to total yearly income than any secondary job. Further, the R2
value
is 0.91 which means that NREGA and secondary jobs alone
contribute to some 93% of total yearly income earned by the sample
population. This means the predominance of daily wage jobs in the
district. The tribal people do not engage much in agriculture and self
sufficiency. The standard errors of both the variables are very small,
0.14 and 0.30 which indicates adherence to BLUE properties.
Most importantly, the t-value for NREGA wage income 1( ) comes out
to be 0.30 which is much less than the critical t-value of 2.160 thus
accepting H0 for the results say that NREGA alone significantly
impacts total yearly income more than secondary jobs which has a t-
value of 0.37.
When the yearly income alone is regressed with NREGA income, we
get the following results:
43
As can be clearly seen, NREGA alone significantly impacts the yearly
incomes of the sample populations. With a R2
value of 0.81, we can
very readily conclude the explanation of yearly incomes by NREGA
income to be 81%.
The results can be summarized in the following mathematical form:
1
2
ˆ 3595 1.45
0.81
y u
R
  

Yearly vs. NREGA income
44
1
2
1
1
ˆ 3595 1.45
0.81
. ( ) .189
( ) 7.685
y u
R
s e
t



  



At 13 degrees of freedom, the t-value comes out to be 7.685 which is
more than the critical t-value of 2.160 thus accepting the hypothesis
and concluding that NREGA does significantly impact the total yearly
income.
We shall now proceed to analyzing the impact secondary wage
income has on the yearly incomes. First, to reproduce the
mathematical curve:
We may summarize the above curve in the following mathematical
equations:
30000 40000 50000 60000
4e+046e+048e+041e+05
Secondary income
Yearlyincome
Yearly vs. Secondary income
45
 
 
2
2
2
2
ˆ 5069 1.48
0.43
3.18
. 0.48
y u
R
t
s e



  



With a R2
value of 0.43, means 43% of the yearly income data is
explained by the secondary wage income. This means that although
secondary wages do contribute to the yearly incomes, it is lesser
than NREGA income which explained 91% of the results. The
standard error is small (0.48) which indicates BLUE properties.
Further, the calculated t-value is 3.18, more than the t-critical value
of 2.160 at 14 degrees of freedom which points out to the
significance secondary wage has on the yearly incomes.
 Assessing migration patterns
The Sabarkantha district is predominantly tribal. Mostly engaged in
agriculture and labour, they keep migrating to far off urban areas in
search of gainful employment where they work for temporary time
periods and return to home villages where they engage in agriculture
and self sufficiency. When the season is not right for cultivation, they
migrate.
However, not all tribal communities are migratory. Like we shall
observe, the people in this district are least migratory, mostly
engaging in local farm labour whenever NREGA is unavailable. In
contrast, other areas like the southern districts of Dangs and Baroda,
tribes are in continuous migration for temporary periods. Reasons
like better living conditions in their home villages, comfortable daily
wage jobs in local areas can effect migration. In the southern
districts, where the terrain is somewhat hilly with dense jungles, it is
46
hard to find jobs in local farms, due to which the tribes of South are
more susceptible to seasonal migrations.
Table 3
Data showing migration pattern (records 1-15)
Record no. Migration Place Value (Y) NREGA income
(X)
1 No NA 0
Rs. 39,600.00
2 No NA 0
Rs. 43,200.00
3 No NA 0
Rs. 41,400.00
4 No NA 0
Rs. 42,120.00
5 No NA 0
Rs. 37,800.00
6 No NA 0
Rs. 36,000.00
7 No NA 0
Rs. 36,000.00
8 No NA 0
Rs. 24,120.00
9 No NA 0
Rs. 16,800.00
10 No NA 0
Rs. 9,720.00
11 No NA 0
Rs. 12,864.00
12 No NA 0
Rs. 31,680.00
13 No NA 0
Rs. 1,125.00
14 No NA 0
Rs. 1,300.00
15 No NA 0
Rs. 1,000.00
The above table shows the migration pattern of the 15 samples,
relating to their NREGA income. Unfortunately, no proper
relationship could be established between NREGA and migration
values (0 for ‘No’, 1 for ‘yes’) due to some calculation errors.
47
Nevertheless, it can be clearly seen that there does not seem to be
any relationship between the income earned through NREGA and the
migration pattern observed. All the samples had not migrated to any
other district, urban area, or outside state looking for work. When
asked why, their responses were towards satisfaction for what
NREGA has to offer, resulting in decreased migrations.
One of the main reasons for absence of migrations in this area is due
to the regularity and implementation of the Act observed. Wages are
consistent & uniform, paid in timely manner by the authorities and
regular availability of projects that has led to discarding the usual
daily wage jobs available in cities which results in exploitation and
extra costs of health and transport.
The other reason could be education. Education leads to better
awareness of the individual’s rights and obligations. Tribal people in
Sabarkantha are quite well educated when compared to some other
backward tribes of Gujarat. This is the reason why many individuals
from the northern districts have recruited in government and private
services, some of them being members of state legislature and
armed forces. With better education, tribal people also have the
weapon to go to the courts wherever they feel any misconduct or
infringement of their rights. While such factors were not surveyed,
they could have been one reason why regularity of wages is
observed as compared to districts of lower education.
In the next part, we analyze what impact NREGA has had on incomes
and migration patterns in Baroda district where tribes have
somewhat different habits of occupation and migration. The tribe we
surveyed was the Rathwa tribe, a scheduled dominant tribe of the
region around Chhota Udaipur, the eastern part of Baroda that
48
borders the state of Madhya Pradesh. As we shall observe, NREGA in
Baroda hasn’t had such major impacts on incomes though there is a
pattern of migration observed.
We shall now proceed to some calculations for Baroda district.
49
Assessing NREGA in Baroda district
The Baroda district, also called
‘Vadodara’ (meaning ‘Sanskar
Nagiri’ in Sanskrit), located 72.51 to
74.17 East longitude and 21.49 to
22.49 North latitudes is the
southern district of Gujarat, sharing
borders with the state of Madhya
Pradesh in the east. It is a
progressive district with the city of
Baroda; on the banks of river
Vishwamitri, is the biggest city and
the district headquarters as, it is the
second populous city after
Ahmadabad. The city has rich
history and is famous for its palaces,
parks, temples and museums. The
district has 12 taluka, 15 towns and 1,518 villages. Population of 3.64
million, it is moderately populated with 482 persons/sq. km and a
sex ratio of 919 females per 1000 males. It has an impressive literacy
rate at 70.76%.
The district is distinguished for its major industries in chemicals and
fertilizers, pharmaceuticals, machine tools, glass, tobacco, fisheries
and dairy. Some big PSUs like Gujarat Alkalis and Chemicals Ltd
(GACL) and Gujarat State Fertilizer & Chemicals Ltd (GSFC) are
located here. Major crop production includes Rice, wheat, Sorghum,
yellow peas, Grams, oilseeds, groundnut, cotton and sugarcane. It is
50
also a major fruit producing district with contribution of 11.25% of
the state’s fruit coming from Baroda. There are over 18,000
registered SSIs (Small Scale Industries), maximum being in the
repairing and servicing industry (5, 713) units. Other key small scale
industries include textiles, metal works, chemicals, rubber products
and food products.
 Assessing impact on incomes
We shall now proceed with measuring incomes of the labour
population. The Baroda district has significant tribal population with
Rathwas as a major Scheduled Tribe. These rural tribes live in remote
villages in the eastern side of the district, around Chhota Udaipur
which is an underdeveloped if we compare to the western areas,
around Baroda city. Just like all other tribes in India, they live a rural
life. The research was conducted in Kevdi and Dhodisamal villages of
Chhota Udaipur district.
Let us first observe some basic data before going further into
scrutinising the results.
Note: The Baroda district comprises of records 16-31.
51
Table 7
Yearly incomes of labourers (record 16-31)
*= inadequate/incorrect data.
Taking out the averages of X1 and X0, we get,
Similarly,
.00
Record no. NREGA
wage
(Rs.)
Yearly
NREGA
income
(Rs.)
Yearly Income
with NREGA
(Rs.)
X1
Yearly income
without NREGA
(Rs.)
X2
16 Rs124.00 Rs.14,880.00 Rs.1,35,420 Rs.1,20,540.00
17 Rs130.00 Rs. - Rs.72,450 Rs.72,450.00
18* Rs120.00 Rs.840.00 Rs.30,840 Rs.27,000.00
19 Rs124.00 Rs.620.00 Rs.71,420 Rs.70,800.00
20* Rs126.00 Rs. - Rs.64,350 Rs.64,350.00
21 Rs124.00 Rs.1,240.00 Rs.1,08,940 Rs.1,07,700.00
22 Rs.100.00 Rs.6,000.00 Rs.79,440 Rs.73,440.00
23* Rs100.00 Rs.36,000.00 Rs.72,000 Rs.36,000.00
24* Rs124.00 Rs.44,640.00 Rs.95,040 Rs.50,400.00
25 Rs100.00 Rs.2,000.00 Rs.95,630 Rs.93,630.00
26 Rs115.00 Rs.27,600.00 Rs.1,28,220 Rs.1,00,620.00
27 Rs124.00 Rs.2,480.00 Rs.1,30,160 Rs.1,27,680.00
28 Rs136.00 Rs.8,160.00 Rs.70,620 Rs.62,460.00
29 Rs127.00 Rs.2,540.00 Rs.73,340 Rs.50,800.00
30 Rs135.00 Rs.2,700.00 Rs.1,08,540 Rs.1,05,840.00
31 Rs124.00 Rs.18,600.00 Rs.65,700 Rs.47,100.00
∑=16.00 ∑=Rs.
151,960.00
∑=Rs.
902,115.00
∑=Rs. 710,815.00
52
Thus, on an average scale, incomes without NREGA were Rs. 44, 425
while incomes with NREGA came out to be Rs. 53, 382.18 which is
equivalent 1.20 times of incomes without NREGA.
We get the following figures when the above data is plotted:
The above figure shows the yearly incomes of the sample excluding
NREGA i.e. the income earned in skilled labour and farm yields added
together. This can be hypothetically seen as average earnings when
an Act like NREGA was not implemented. Record numbers have been
shown on the x-axis while Incomes have been shown on the y-axis.
The bold blue line connects the corresponding data points. Let us
proceed to incomes of the same sample when NREGA is added and
compare the two.
0
20000
40000
60000
80000
100000
120000
140000
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Yearly incomes excluding NREGA
53
Above figure shows a modified version of the preceding graph when
yearly income was analyzed with addition of the total NREGA income
earned. We clearly observe an increase in incomes. If NREGA never
existed, the maximum a labourer could earn is Rs. 90,000 while for
NREGA an addition of Rs. 10,000 makes it quite noticeable for any
layman.
We will now compare the yearly incomes with and without NREGA
and attempt to calculate the differences between the two. This is to
be done to test if NREGA has had major impacts on the incomes after
its implementation in seven years or does it remain the same. First
off, an overall increase in the incomes can be shown through a simple
graphical device.
0
20000
40000
60000
80000
100000
120000
140000
160000
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Yearly incomes including NREGA
Total
54
The above figure shows a comparative aspect of the yearly incomes
with and without NREGA. Barring a few observations of Record 18
and 22, what we roughly observe is a slight increase in yearly
incomes of the sample by certain points. Here too, there is disparity
observed. For example, records 22, 24, 26 and 29 show major
increase in their incomes when NREGA was added. Though an overall
improvement is witnessed, we still need to test whether there has
been a significant impact or not. For this, we first need to establish a
relationship between increase in yearly incomes due to NREGA and
secondary wage income. This means the dependency of yearly
income on yearly wage income under NREGA and secondary
occupations the workers have performed. Such calculations have to
be done through regression where the cause and effect relationship
is established between the dependent variable (in this case the total
yearly income) and the independent variables (NREGA and secondary
incomes in our research). When the relationship is established, we
0
20000
40000
60000
80000
100000
120000
140000
160000
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Total Yearly incomes
Sum of Yearly income1 (NREGA+secondary+primary)
Sum of Yearly income2 (without NREGA)
55
test how significant the dependency is through testing of a stated
hypothesis. When the stated hypothesis comes out to be true, we
accept the notion that there is significance in the analysis. Thus, we
now move on to stating the hypothesis.
Hypothesis
H0: NREGA and secondary incomes have had a significant impact on
total yearly incomes i.e. 1 2, 0  
H1: NREGA and secondary income do not significantly impact total
yearly incomes i.e. 1 2, 0  
Table 8
Total Yearly income vs. NREGA + secondary incomes
Record No. Yearly NREGA
income (Rs.)
X1
Yearly Secondary
wage income (Rs.)
X2
Total yearly
income (Rs.)
Y (dependent
variable)
16 Rs. 14,880.00 Rs. 45,000.00 Rs. 1,04,520.00
17 Rs. - Rs. - Rs. 65,250.00
18 Rs. 840.00 Rs. 33,000.00 Rs. 33,840.00
19 Rs. 620.00 Rs. 45,000.00 Rs. 65,870.00
20 Rs. - Rs. - Rs. 18,000.00
21 Rs. 1,240.00 Rs. 45,000.00 Rs. 56,160.00
22 Rs. 6,000.00 Rs. 45,000.00 Rs. 49,500.00
23 Rs. 36,000.00 Rs. - Rs. 81,000.00
24 Rs. 44,640.00 Rs. - Rs. 95,640.00
25 Rs. 2,000.00 Rs. 45,000.00 Rs. 83,000.00
26 Rs. 28,800.00 Rs. 45,000.00 Rs. 1,14,300.00
56
27 Rs. 2,480.00 Rs. 90,000.00 Rs. 1,13,480.00
28 Rs. 7,800.00 Rs. 45,000.00 Rs. 62,400.00
29 Rs. 2,480.00 Rs. 45,000.00 Rs. 65,480.00
30 Rs. 2,480.00 Rs. 60,000.00 Rs. 93,980.00
31 Rs. 18,600.00 Rs. 30,000.00 Rs. 56,100.00
Totals Rs. 152,520.00 Rs. 360,000.00 Rs. 858,523.00
A rough assessment the influence NREGA and secondary incomes
have on the total yearly incomes of the sample population could be
made out through table 8. In Gujarat, the indigenous tribes do skilled
and unskilled jobs for a daily wage. This is usually in seasons when
not enough work is available in villages resulting in long migrations to
urban areas where daily wages are earned. As we shall observe,
there is a significant contribution of NREGA to the yearly incomes.
In establishing a relationship we first need to state those variables
that are dependent and those that are independent. The yearly
income in this case is the dependent variable (Y) while NREGA (X1)
and secondary incomes (X2) are independent variables. As we have
to test at what significance these two incomes have on the yearly
income, so is the relationship of dependency on independents. The
dependent variable is normally denoted by a capital ‘Y’ while the
independents are denoted as ‘X’. When multiple variables are
involved, we use subscripts to separate them.
Running regression on the data given in table 8 for 16 observations
of Baroda district, spread in villages of Kevdi and Dhodisamal, we got
these results.
57
(0.1)
1 2
1 2
1 2
2
2
ˆ 20108 1.601 1.285
( ) 0.363, ( ) 0.223
( ) 4.410, ( ) 5.76
0.728
0.686
y u
se se
t t
R
R
 
 
 
   
 
 


Where, ˆy is the estimated value or the equation of prediction for the
total yearly incomes; ˆu is the error term, 1 and 2 the estimated
coefficients for the independent variables. The R2
value denotes the
‘goodness of fit’ of the trend line with the data points. R2
in this case
is 0.68 which denotes 68% of the yearly income data explained by
the wage income data comprising NREGA and secondary incomes.
It’s a pure case of multi-collinear relation of 3 variables. A curve will
explain these mathematical equations in graphical form as shown
below
58
The relationship is quite clear from the above scatter plot matrix. A
straight linear trend line is observed with an R2
value of 0.728,
matching exactly to the calculated equation. The conclusion through
the stand error and the t-values is also quite clear. A low standard
error denotes the existence of BLUE properties of estimators 1 and
2 . The t-value comes out to be 4.410 for NREGA and 5.76 for the
secondary income. This clearly points out to the conclusion that both
NREGA and secondary wages significantly impact the yearly incomes
and that more than half of the yearly income depends on these two
variables.
Total.NREGA.income
0 20000 60000
01000030000
02000060000
Total.Sec..income
0 10000 30000 40000 80000 120000
4000080000120000
Yearly.income1..NREGA.secondary.primary.
59
Having established and testing this relationship, we will now test at
what level does NREGA and secondary wages impact the yearly
incomes when they are both separated and tested individually. This
means a simple linear regression to be run. Let us proceed to stating
the hypothesis.
Hypothesis
H0: NREGA alone significantly impacts yearly incomes of the sample
i.e. 1 0 
H1: NREGA doesn’t significantly impact yearly incomes i.e.
1 0 
This hypothesis has to be tested mathematically through regression
as shown below.
Note: Refer table 2 for the above figure.
40000 60000 80000 100000 120000
010000200003000040000
NREGA income
Yearlyincome
60
Figure 10 shows the relationship between NREGA and observed total
incomes. Representing the regression line in mathematical form, we
get these results:
1
2
1
1
ˆ 8370 0.374
.033
. ( ) 0.533
( ) 0.701
y u
R
s e
t



  



What do we observe from the above data? The R2
value comes out
to be 0.033 which means that only 3% of the yearly income is totally
explained by NREGA wage income. This means that the rest of 97%
of yearly income comes from other sources of income.
The t-statistic [ 1( )t  ] comes out to be 0.701 which is the calculated
value. For 14 degrees of freedom, 2.715calt  is the critical region
value. The value 0.701 lies within the normal probability curve
between -2.715 and +2.715, ( 2.715 2.715)calt    thus accepting the
null hypothesis H0 that NREGA individually does not heavily impact
the yearly incomes of the sample population.
Next, we shall observe the impact secondary jobs have on the
sample yearly income.
Hypothesis
H0: Secondary income does not play a significant impact on the yearly
incomes of the sample i.e. 2 ~ 0 .
H1: NREGA plays a significant impact on the yearly incomes i.e. 2 0 
Drawing mathematical curve to calculate the above hypothesis, we
get the following results:
61
Note: Refer table 2 for above figure.
The mathematical formulations for the above curve are:
2
2
2
2
ˆ 5971 0.078
0.32
( ) 2.574
. ( ) 0.275
y u
R
t
s e



  



What can we make out from the above formulations? The R2
comes
out to be 0.32 which means that 32% of the yearly income can be
predicted through secondary income. The standard error of the
independent coefficient 1 is 0.275 which is a good indicator of a
linear, unbiased estimator. The t value of the coefficient is 2.574
which lies within the critical region of -2.715 and +2.715, thus
40000 60000 80000 100000 120000
020000400006000080000
Secondary income
Yearlyincome
62
accepting H0 that secondary incomes on an individual scale do not
significantly impact the yearly incomes.
Assessing migration patterns
The tribal communities of Chhota Udaipur district have always been
engaging into migration for ends to meet. Since the beginning, these
communities migrate in seasonal time frames to urban areas where
they get skilled and unskilled jobs like carving, domestic work, and
helpers on contractual basis in households and industrial units.
In India, prior NREGA, as we have already seen, the employment
provided was not proper and the workers were forced to migrate in
search of jobs because they did not see much yield on farming alone.
The district of Chhota Udaipur is an industrially backward, poor
district with lack of even the most basic rail infrastructure. Besides, it
is not efficiently irrigated. If it were to be irrigated, the people would
have to undergo education on how to use irrigation techniques and
new seeds for better yields. What we find in this district is poor
education and high dropout rates. Thus, the tribes depend on
secondary skilled and unskilled jobs for their livelihood.
Certain belief exists that because NREGA has been fruitful in
providing better results and livelihood to poor communities, the
result is they prefer to live in their own villages or nearby areas
because NREGA gives them enough work for indulgence for almost a
whole year. This brings us to a speculation that NREGA should have
decreased the migration to other cities since its implementation.
Whether this is true has to be observed again through some
statistical techniques. In this sub-study, we will observe whether the
NREGA income the population earns in a year has been successful in
suggesting them to stop migration to urban areas. First, let us state
63
the hypothesis, and then carry on with some data and lastly the
results.
Hypothesis
H0: the yearly NREGA income has had positive impact on migration
patterns i.e. migration to other cities has decreased i.e. 1 0  .
H1: Yearly NREGA income has had no impact on migration patterns
i.e. 1 0  .
Table 3
Migration data of sample population
Record No. Migration Place Value(Y) NREGA income
(Rs.) (X)
16 Yes Visalpur,
Ahmadabad
1 Rs.
14,880.00
17 Yes Mandvi, Kutch 1 Rs. -
18 No NIL 0 Rs.
840.00
19 Yes Visalpur,
Ahmadabad
1 Rs.
620.00
20 Yes Rajkot,
Saurashtra
1 Rs. -
21 Yes Kalawar,
Saurashtra
1 Rs.
1,240.00
22 Yes Visalpur,
Ahmadabad
1 Rs.
6,000.00
23 No Nil 0 Rs.
36,000.00
24 No Nil 0 Rs.
64
44,640.00
25 Yes Morbi, Rajkot
dist.
1 Rs.
2,000.00
26 Yes Padamba,Baroda
dist.
1 Rs.
28,800.00
27 Yes Motwadhara,
Kalawar dist.
1 Rs.
2,480.00
28 Yes Limdi, Rajkot
dist.
1 Rs.
7,800.00
29 Yes Visalpur,
Ahmadabad
1 Rs.
2,480.00
30 Yes Khorana, Rajkot
dist.
1 Rs.
2,480.00
31 Yes Visalpur,
Ahmadabad
1 Rs.
18,600.00
When we plot the above values for x and y on a curve the result is
this:
We shall now attempt to calculate the relationship migration has
with NREGA. With a R2
value of 0.33, dependency of migration on
NREGA income is of the degree of 33%. Also the regression equation,
0.986 1.646y x  suggests a negative relationship. The results for the
above curve can be summarised as follows:
1
2
1
ˆ 0.556 .02
0.026
( ) .612
y
R
t


 


The t value comes out to be .612 which is lower than the lower
critical tail value of 2.145 at 14 degrees of freedom. The null
hypothesis is thus rejected and we can fairly conclude that NREGA
has had no impact on migration pattern of the sample population.
How do we analyze the migration pattern? Though the above results
suggest that NREGA hasn’t had much impact on migrations, it also
suggests that the phenomenon seems to have increased over the
years. An employment generating Act should contain long migrations
65
by providing gainful employment to the local populace. However, the
observation has been the irregularity of NREGA projects being
provided, when compared to some other districts where projects are
provided on regular basis. This makes a compulsion upon the tribal
people to migrate to other cities because they depend on earning
only through daily wage labour. Thus, on the migration aspect,
NREGA has shown no such positive result.
Concluding the results
When we compare the two districts, we find differences in incomes
and migration patterns. For example, villagers in Baroda district earn
more incomes through secondary jobs. Though we observed
NREGA’s comparatively lesser significance in contributing to the
yearly income as compared to Sabarkantha, the sample of Baroda is
more financially well off as can be seen from the graph below.
0
20000
40000
60000
80000
100000
120000
140000
160000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Sum of Yearly income1 (NREGA+secondary+primary)
Sum of Yearly income2 (without NREGA)
66
From the figure given above, some rough conclusions can be pointed
out:
 Starting from record number 16 till record 31, that represents
sample of Sabarkantha district, we observe comparatively
higher yearly incomes. From a rough viewpoint, samples 1-15
of Sabarkantha earn not more than Rs. 60,000 a year whereas
the samples 16-31 of Baroda district earn a staggering Rs. 1,
00,000 to Rs. 1, 20,000 a year.
 The sample in Baroda district earns an average of Rs. 53, 657 a
year while in Sabarkantha the sample earns an average of Rs.
38, 340 a year which is equal to 1.4 times of incomes earned in
Sabarkantha.
 Yearly income of Sabarkantha district is more consistent and
regular with fewer disparities observed. In Baroda district,
disparity in income exists with some samples families earning
not more than Rs. 20,000 a year while majority earn more than
Rs. 50,000 a year.
 Also observed is the consistency of NREGA income earned in
Sabarkantha. This is due to regular work period provided
through NREGA, uniform wages and timely payment. Quite the
contrary exists in Baroda where untimely payment of wages
and unavailability of work is the norm. Income through NREGA
is also more inconsistent than the income observed in
Sabarkantha.
 The most important comparison has to be between the
regression results of the two districts. The two regression lines
have been reproduced here for quick reference.
67
40000 60000 80000 100000 120000
010000200003000040000
NREGA income
Yearlyincome Figure 1
Figure 2
68
 Figure 1 corresponds to Baroda district while the latter
represents Sabarkantha. It can be clearly seen the extent of
NREGA’s influence in Sabarkantha. A staggering 91% of the
yearly income of the sample in Sabarkantha is explained by
NREGA implying the predominance of NREGA wages in this
region, while only a low figure of 9% of yearly incomes is
earned through NREGA in Baroda district. Though wages were
higher in Baroda, the sample there preferred to work in
secondary jobs for livelihood.
 Tribal people in Baroda are more migratory than those in
Sabarkantha, to the point that no proper regression could be
established between NREGA and migration in the latter district.
Though it may seem absurd to establish such a relationship
between NREGA and degree of yearly migrations, it is a fact
that employment generating laws do effect migration patterns
of people. The sample of Sabarkantha was too satisfied with
NREGA’s workings so they found no reason for migration,
whereas those in Baroda claimed lack of NREGA work forcing
them to still migrate to other towns.
 Although savings accounts have not been considered, NREGA
contributed to increased bank accounts and savings that were
not observable in tribal districts prior NREGA. Data has not
been produced due to topic being outside this research.
 The incomes observed increased at marginal levels only i.e. the
magnitude of their increase was not of the degree for the tribal
people to reap durable benefits like buying new lands, assets or
even small houses or electrical appliances like a second hand
television or Radio. This is because the wage offered by NREGA
was far too less than the wages offered by third party
employers in small towns and cities. Research pointed out not
69
less than Rs. 400 on an average per day was the norm for
secondary jobs.
These were some of conclusions from our results. Though exact
degree of impact can never be pinpointed, it is quite clear that
NREGA has had a considerable impact on the livelihood of these
people as far as basic yearly incomes & savings are concerned. As for
migration, results vary as not only NREGA influences migratory
patterns but also factors like local preferences, work culture of the
tribe, degree of entrepreneurship as some tribes are known for doing
good small businesses while some do not encourage or possess
much of enterprising behaviour, individual ambitions and the like.
However, for purposes of feedback to government agencies on
NREGA, a more in-depth analysis needs to be done taking into
account the Act’s impact on the expenditure patterns with
consideration of prices of important food and durable articles,
changes in education levels due to any observed increase in incomes
and the like. NREGA by its very nature is for temporary purposes as
one can comprehend while going through its gazetted government
document. Though it offers better quality of welfare than the
previous programmes there was a general consensus among the
sample that still more needs to be done on NREGA and the wages it
offers and also in the behaviour of the officials implementing this Act
as they are directly held responsible for the quality of
implementation. Perhaps by only increasing the market rate of wage
through amending the Wages Act, NREGA can achieve more success
at village levels. Amendments can also be made in the Act to support
long term agricultural practices to make farming even more
productive as that is the primary occupation of not just the tribes but
for the whole Indian sub-continent. It is simple logic that though
70
NREGA increased incomes of the targeted people, that increase
won’t last long as the projects it undertakes like digging, check dams,
irrigation & road works are of temporary nature and not such that
would employ people over a series of generations. That is only
achieved in agriculture. Unfortunately, till now, NREGA does not
have much to offer in the farming sector. Though a well planned Act,
being discussed in foreign countries of its success and uniqueness,
we cannot let it down like the prior programmes that were sadly
withdrawn due to failures and embarrassing scandals. Whether
NREGA will last long or be normally withdrawn that has been the
norm in Indian political environment, only time will tell.
~~~End~~~

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Impact of mgnrega (final)

  • 2. Certificate This is to certify that the project report entitled Report on impact of MGNREGA on employment, migration and income patterns of indigenous tribes of Gujarat Submitted by Shivendra Sharma Of M.A Economics, roll number 363 Is the bonafide work carried out by the ward under the supervision of Dr. Pradeep Apte and Dr. (Mrs.) S.L Matkar is approved for the fulfilment of the requirements of the University of Pune, Pune for the Master of Economics. This project is the original work of the ward and has not been copied from any report. The references are duly acknowledged and the same has not been submitted for any other purpose. Prof. S. L. Matkar, Head of Department, Department Of Economics, Fergusson College, Pune
  • 3. Abstract A plethora of well planned schemes and programmes, meant to generate gainful employment have existed ever since India became independent 67 years ago. Advanced eradication of unemployment that has been plaguing the country ever since started as late as 1970s with passing of schemes like the Maharashtra employment Act passed in 1979 and some minor programmes initiated by the central government. The employment Act of Maharashtra was revolutionary because it included ‘right to work’ and gave a legal recognition to the targeted people. Years passed and the government launched even more ambitious programmes and schemes like Indira Gandhi Rural development Programme (IRDP) and National Rural Employment Programme (NREP) that aimed high on eradicating the chronic unemployment. However, related studies and researches showed a total failure of these programmes. IDRP and NREP that were a union of various programmes holding similar objectives were failing in showing results due to poor implementation and loopholes (details which can be seen further in part I of the project). Most of the statistical studies pointed to a more-than-expected poor performance. In view of this, the UPA government passed the MGNREGA in 2005 that was revolutionary in its own sense; that its provisions were such that implementation had to be better than the previous programmes. It’s like forcing certain compulsions upon the officials or they’ll be answerable to law. Though NREGA proved to be much efficient, its validity upon delivering what it intended had to be observed from a close angle. This project tries to observe some of the basic criteria that an employment generating scheme has to achieve through some simple regression applications.
  • 4. The project is divided into three parts; part I deals with a history of employment in India and the steps the government has taken to eradicate unemployment in India. Part II explains in detail the provisions of NREGA and how it distinguishes itself from the rest of the programmes and Acts. Part III includes some econometric applications that are necessary to observe the real effects the Act has had on selected random samples.
  • 5. Introduction The MGNREGA that stands for Mahatma Gandhi National Rural Employment Guarantee Act was passed in the year 2005 by the UPA government. India is a major developing economy that suffers from chronic unemployment and disguised employment that are characteristic of any third world developing economy. In such circumstances, the central and state governments have in the last 40 years passed laws and initiated programmes that were meant to eradicate unemployment once and for all. Although these programmes like IRDP and NREP were very ambitious and well intentioned, studies done by researchers and policy makers pointed out to a failed system of implementation where objectives were being totally ignored and instead only personal gains were being considered. Thus, the vicious nexus of the local village leaders at panchayat levels and the more powerful officials and politicians formed that led to widespread corruption, scandals and implementation loopholes that only led to more failures. The percolation effect on the targeted populations was found to be almost zero. Consequently, these programmes were reviewed by different committees and policy experts to look into the reason why they failed and their replacements by more efficient laws. Thus, the NREGA came into existence in the year 2005 as a direct result of the heavy criticisms these programmes faced. It was quickly spread to the whole of India except the state of Jammu & Kashmir and since then has received a lot of positive feedback, perhaps the only employment generating law that has received positive views from the general public, the beneficiaries and researchers. As we shall see it in detail, the NREGA has well planned provisions that allow
  • 6. accountability, transparency and a sense of justice to be served to the poor people. Meant to generate employment, it was also meant to generate a sense of purpose. However, like every other law is imperfect, NREGA too might have certain loopholes. As we will see in part III where some econometric applications have been done to test the results, NREGA has had success in uplifting the tribal workers, but only at subsistent levels. Incomes have increased but at levels that are still debated. Whether the jobs these labourers do in urban areas are more paying due to higher wages they include or is it better to be a NREGA beneficiary? Though there is certain thinking among individuals that NREGA has had success in changing the migration pattern, our results pointed out to a more or less the same migration pattern. As far as employment opportunities are concerned, NREGA definitely delivers higher in that the provisions of NREGA are humble and take care of the labourer’s financial situation as also cater to the needs of labourer families. Objectives of the study Following are the objectives of the present study:  To look into the quality of implementation of NREGA in the selected districts.  To comment on the income and migration patterns that are the central theme of this project and how NREGA has affected these two through simple econometric applications.  To conclude the study with a comparison of the districts and to comment whether NREGA differs in terms of implementation.
  • 7. Sources of data Following sources of data were referred during formulating the study: 1. The Indian economy (latest edition) by Dutt & Sundaram. 2. The economic survey, government of India (2011-12). 3. Secondary data provided by the Labour Ministry, government of India. 4. Secondary data provided by Forest department, government of Gujarat. 5. Primary data collected through individual initiative. Hypothesis Our null hypothesis H0 states that NREGA has had a significant impact on incomes, migration and employment patterns of the selected tribal sample of Gujarat. Alternatively, the hypothesis that NREGA has had no impact on the above mentioned criteria is to be treated as alternative hypothesis, H1.
  • 8. Table of contents Part I – Indian economy and employment generation ____ 1 Employment in India – an introduction________________________________________ 2 Employment policies prior NREGA ______________________________________________ 5 Employment Guarantee scheme of Maharashtra________________________________________6 National Rural Employment Programme ________________________________________________8 The Rural Landless Employment Guarantee Scheme____________________________________9 The Integrated Rural Development Programme ______________________________________ 10 Jawahar Rozgar Yojana_________________________________________________________________ 13 Concluding Remarks ____________________________________________________________________ 15 Part II - The NREGA and methods for assessing the impacts __________________________________________________________17 Introduction to NREGA ___________________________________________________________18 Provisions of schedule I _________________________________________________________________ 20 Provisions of schedule II_________________________________________________________________ 21 Differentiating features of NREGA______________________________________________________ 23 Assessing impact of an Act_______________________________________________________24 Methodology for assessing impact______________________________________________________ 26 Gujarat – history, economy and NREGA _______________________________________28 History of Gujarat _______________________________________________________________________ 29 The modern day Gujarat ________________________________________________________________ 30 Economy and NREGA in Gujarat________________________________________________________ 30 Part III – Assessing and comparing the impact____________33 Assessing NREGA in Sabarkantha district ____________________________________34 Assessing impact on incomes ___________________________________________________________ 35 Assessing migration patterns ___________________________________________________________ 45 Assessing impact – Baroda district ____________________________________________48 Assessing impact on incomes ___________________________________________________________ 49 Assessing impact on migration _________________________________________________________ 60 Conclusion ______________________________________________________63
  • 9. 1 Part I Indian economy and employment
  • 10. 2 Employment in India – an introduction Employment is necessary for man. It provides the basic livelihood for survival and living, with the resources that are needed to shelter from life’s uncertainties. In prehistoric times human beings employed themselves in hunting and small scale farming and gathering to stock resources for survival. These resources were then used by everyone to consume. Since earliest settlements that were established some 5000 years ago when Neolithic man carved out stone tools as has been recently excavated in some ancient districts of Tamil Nadu, what is observed is agriculture as the main employing force. More advanced techniques of agriculture cultivation are then witnessed in ancient settlements of Ropar and Kalibangan- small towns that were part of the famous Indus valley civilisation. Evidences of extensive rice and maize cultivation have been found with one barley field still very much intact at Kalibangan, a small Harappan settlement in Rajasthan. The Vedic era that followed too was characterised by extensive agriculture. Early semi-nomadic Vedic people grew wheat and produced milk products, a legacy still followed in Northern India and beyond in much of the Central Asian nations. Every major regime that had its territories on the subcontinent relied on agriculturists for revenues and taxes. Be it the Mauryas, the Gupta kingdom, Kingdom of Sakas, the Satavahanas, Mughal Empire or the British, every major power in India earned revenues only through agricultural produce. As agricultural produce and revenues in olden times seemed to be directly linked to employment, in the modern age employment has a direct link to various macroeconomic indicators that distinguish a country’s standings- Indicators like per capita income and various GDP ratios that are so crucial for any economy for its growth prospects. Any economy that provides gainful employment to its people is characterised by higher per capita incomes as also higher GDP ratios. When incomes increase, poverty levels go down and so
  • 11. 3 do other negative indicators like mortality and illiteracy. Employment also links to socio-economic human development. Better employment opportunities bring in an industrious, competitive environment among the people and a cycle of positive growth initiates that lead to long term development. Highly developed nations like the U.K, U.S, Sweden, Denmark, Germany and Australia have very highly evolved employment mechanisms. Such countries are characterised by highly productive occupations in all the three sectors. Hence, providing the best possible employment to the people is a must for any country to look towards growth. Specifically, employment in India has always been the primary sector, and it still is. Nearly 65% of the population in modern India is still working on farms to earn a livelihood. Farmers of various financial strata could be found, from the richest, affluent farmers who own acres of land to the most marginalised, poor farmer who have literally no stake in earning a dignified income. To make things more clear, referring to government documents proves to be helpful. Official sources suggest an upward trend in employment in more productive services; the secondary and tertiary sectors. But the overwhelming population growth rates have proved another challenge to Indian planners to first clear the burden of backlog employment and provide new opportunities to Indian youth. NSS data shows rise in student population from 20.5 per cent in 1993-94 to24.3 per cent in 2004-05 and further to 26.6 per cent in 2009-10 thus suggesting an increase in demand for productive jobs. Though employment rates have been modest in recent years, more still needs to be done to employ the backlog. Further, the economic survey suggests different rates of employment for Current daily Status (CDS) when compared with the usual principal subsidiary status (UPSS) method. For example, for the period 2004-05 to 2009- 10, significantly higher growth rates are observed (1.11 per cent) than compared with UPSS terms. Similarly, the rates of
  • 12. 4 unemployment increased at a slow pace on UPSS basis and at relatively higher paces at CDS basis. Source: Economic survey, 2012-13. The figure above shows some unemployment rates over periods 1993-94 to 2009-10. Unemployment increased from 6.0 per cent in 1993-94 to 8.2 per cent in 2004-05 but again decreased further to 6.6 per cent in 2009-10. The fall in unemployment despite marginal increase in employment figures could be due to increasing young population that opts or better education rather than going in the labour market. This is reflected by the rise in growth in enrolment of students in higher education from 49.25 lakh in 1990-91 to 169.75 lakh in 2010-11. More figures suggest a rise in employment in the organized sector, public and private combined, has increased by 1.0 percent in 2011, as against 1.9 per cent in 2010 as the table below shows. 1.9 2.2 2.3 2 6 7.3 8.2 6.6 0 2 4 6 8 10 12 1993-94 1999-2000 2004-05 2009-10 Percent Unemployment over the years CDS UPSS
  • 13. 5 Overall employment figures Sector Employment (in lakhs) as on 31 march Percentage change 2010/2009 Percentage change 2011/2010 2009 2010 2011 Public 177.95 178.62 175.48 0.4 -1.8 Private 103.77 106.46 114.52 4.5 5.6 Total 281.72 287.08 289.99 1.9 10 Thus, an overview can be summarised as India experiences upward and downward trends in employment. What is clearly observable is an upward trend in employment after 2000-01 as more liberalised policies are adopted and the observable growth of the tertiary sector. For a more in depth explanation, we need to dwell more into brief history of planning in India, specifically towards the approach of employment generation over the last 6 decades as we see in the next chapter. Employment policies prior NREGA Witnessing poverty and uneducation as linked to underemployment, the Government of India has been actively passing legislations and Acts to reduce this chronic obstacle as it has always been a concern both to the government, the general public and as mentioned before, poses a major obstacle to the economic development of a nation. The government started serious poverty and unemployment eradication programmes after the Bhagwati committee report in 1973. Some initial steps were taken by the government as mention under:
  • 14. 6 1. The Rural works programme. Under this programme, constructions of civil works were taken up to temporarily alleviate unemployment, if not a permanent step by the government, it might have reduced unemployment figures while providing shelter for the poor. 2. Marginal farmers and agricultural labourers Programme. Under this scheme, secondary jobs like dairy, poultry farming fishery, horticulture operations, etc were provided to those who were categorised under ‘disguised unemployed’. It meant a shift from primary, crop cultivation to more yielding farming jobs. 3. Area development scheme. These schemes related to the development of certain infrastructural facilities. It meant to provide employment and also to boost infrastructure. 4. Agro-service centres. These were service centres established by the government to provide guidance and incentives to the unemployed/under-employed youth who were diploma holders in mechanical, agriculture and electrical engineering and allied fields as well as graduates in agriculture machinery, repairing and hiring facilities, etc. 5. Crash programme for rural employment. This scheme’s primary objective was to provide works or assets of durable nature, to be of benefit to the poor strata as also to provide employment to 100 people in each block for a working season of 10 months. Various works included irrigation facilities, flood protection, soil conservation and a-forestation and land reclamation. Employment guarantee scheme of Maharashtra The Maharashtra government in 1972-73 introduced its own employment guarantee scheme (EGS) to give recognition to the ‘right to work’ enshrined in our constitution. It was the first of its
  • 15. 7 kind in the country. It embodied a commitment by the state government to provide work to a person who comes forward to offer labour. Some of its main objectives were:  Provide productive employment to labourers in approved rural works which raise productivity of the economy.  Work undertaken should produce durable assets for the nation.  Works to be implemented departmentally without any private contracts. This was intended to check undue/illegal/low wage payment by the contractors. Instead, 60% of the works expenditure was done through wages to works while 40% in the form of materials, food and other supplies. The scheme was strictly limited to the rural areas and the weaker sections of rural society who were involved in unskilled labour and was adhered to benefit the adult population i.e. people above the age of 18 years. A review of the scheme reveals its success in the first 10 years when the expenditure incurred on wage payment and implementation of various works increased from Rs. 1.89 crores in 1972-73 to Rs. 102.2 crores in 1980-81. However, post 1983, man days declined while expenditure increased to Rs. 130 crores in 1982-83. As against an expenditure of Rs. 5.3 per man-day in 1972-73, it increased to Rs. 10.2 per man day in 1982-83. According to the 8th plan, “there has been a significant reduction of unemployment and poverty in the state. Estimates tell a reduction of unemployment in the state from 7.16% in 1977-78 to 3.17% in 187- 88. Besides, it has resulted in the reduction of poverty from 60.4% in
  • 16. 8 1977-78 to 36.7% in 187-88. The EGS has also resulted in more women being employed, with nearly 60% of the rural women getting employment.” The scheme was a success in most parts of the state with Prof. Dandekar acknowledging the Act’s approach towards giving organized employment with government funding and the labourer’s ‘Right to Work’ being recognised by the Act. Notwithstanding such positivity, it still had loopholes and offered wages at subsistence levels only. In addition, studies revealed the Act failed to reduce poverty levels with Maharashtra still scoring higher than the national average of poverty levels. National Rural Employment Programme The NREP was launched on October of 1980. The programme was implemented with a 50% central funding. An estimated 300-400 million man-days were to be generated each year for the unemployed and underemployed. Besides, the NREP aimed to create productive assets like schools and balwadis, rural roads, community irrigation wells and community centres. The programme generated some 1,477 man-days as against the objective of 1500-2000 man-days with a total expenditure of Rs. 2,940 crores, spent in 1985-86 and 1988-89. In other words, the objective of reaching the targeted man-days was not achieved despite considerable pumping of funds by the government. Though well rounded it may seem, the programme suffered from poor implementation, poor monitoring, non-coordination of authorities in identifying unemployed/underemployed families, failure to secure minimum wages and stereo-type construction of
  • 17. 9 famine-era works like kachcha roads, reminiscent of the old pre- independence days. On the basis conducted by the Indian Institute of Public Administration, “the employment provided by NREP is for a very short duration and cannot make a permanent impact. In addition, the wages offered are lower than the market rates. Selection of beneficiaries is improper with the poorest of the poor being left out in the process. Secondly, there is a tendency to go in for heavy building materials which is contrary to the objectives given out by NREP. The programme is meant to use local resources for employment generation and building and not small assets as could prove to be useful in the long run.” The Rural Landless Employment Guarantee Scheme This scheme was launched on the 15th of August, 1983 with 100% funding from the central government. Its objectives were to create productive assets in rural areas and generate gainful employment and improve the overall quality of rural life. Resources were allocated to states and Union Territories with certain criteria decided by the government with 50% weight given to number of agricultural labourers, marginal farmers and workers and 50% to incidence of poverty. Wages were paid according to the minimum Wages Act. Part of the wages was to be paid in the form of subsidized food grains. The programme included many projects of social forestry, Million Wells scheme and the like. The scheme was later on merged with the NREP (National Rural Employment Programme) on the premise that both had similar objectives. Though not much can be apprised of the programme, the progress during the 7th plan revealed employment generation of the tune of 1,154 million man-days.
  • 18. 10 A major criticism of the programme, like the ones before it, was poor implementation and the failure to significantly reduce poverty levels in rural areas. The matter lied in improving the efficiency of the programme rather than indulging in administrative reorganizations as said by reformists and policy pundits. In this case, the programme failed due to corruption, non-payment of wages an ineffective redress system and poor implementation in the most poor areas that were targeted. The Integrated Rural Development Programme The Integrated Rural Development Programme (IRDP) was launched during the sixth plan (1980-85). It was an admixture of different employment generating schemes and Programmes, interlinked and similar in their objectives. These programmes included the Small Farmers Development Agency (SFDA), Marginal Farmers and Agricultural Labourers (MFAL), Command Area Development Programme (CADP), Desert Development Programme (DDP). The basic fundamental for launching IRDP was to “eliminate the multiplicity of programmes and to merge them into one identity” called the Integrated Rural Development Programme. The philosophy behind IRDP was the failure in some third world countries to alleviate poverty and unemployment while their GDP/capita increased. This means that the gap between the haves and have-nots increased in these countries with the rich becoming richer and the poor becoming poorer. India, which is no exception, has seen a polarised development, a flaw pointed out by many economists during the time when IRDP was launched. The strategy was to promote self-employment of labourers through creating productive rural assets so they could cross the poverty line. This was
  • 19. 11 to be done through IRDP. The NREP was to provide wage employment during sporadic or seasonal unemployment. It also intended to provide absorptive employment capacities in rural areas through non-agricultural activities. This also meant creation of infrastructure, benefitting the economy as a whole. The programme had massive targets to achieve. Initially, some 5000 blocks over 52 districts were selected, with 600 BPL families. This meant a figure of 15 million BPL families; with 75 million persons living below the subsistence levels. For each block, Rs. 35 lakhs were to be shared between the centre and the states on a 50-50 basis. Subsidies were to be offered to small farmers (22.5%), marginal workers (33.3%) and to tribal beneficiaries (50%) on the foremost principle that the scheme had to reach the poorest families first. The programme assisted a total of 108 lakh families, 50% being under the category of SC/ST which was a target achieved. However, the target of covering 40% women was uncovered at 34%. Suffering from weaknesses like ineligible selection of beneficiaries, improper training to unskilled labour and no significant increment in incomes, the programme worked till April, 1999, after which it was restructured to Swarnajayanti Gram Swarozgar Yojana (SGSY) which aimed at self employment of rural poor. Under SGSY, the government decided to introduce the Family Credit Plan, where more than one member of the poor household could be given multiple assets. The idea was to speed up the families’ crossing of the poverty line. Level of investment increased to Rs.20, 000 to Rs. 25, 000 per family for more assets to family members A brief critical assessment of IRDP shows the programme did not percolate its effects on the poor households. There were
  • 20. 12 misclassifications of the 16.5 million beneficiaries as poor. Thirdly, a very important loophole of IRDP was its non-percolation effect, mainly due to two reasons a) Misuse of loans floated by government. b) Leakage in loans and subsidies thus nullifying the effects. NABARD in one of its surveys pointed out the unusually high rate of interest when borrowing the assets provided by IRDP. The programme provided mostly dairy and agricultural assets like milk animals, sheep, bullocks and bullock carts, camels and camel carts for loans given off to beneficiaries. Though the rate of interest was fixed at 12% for bank loans, the effective rate was 30%-35% due to existence of transport costs, costs of time, middlemen demanding minor bribes and out-of-pocket expenses thus nullifying the overall subsidy amount. Furthermore, the giving away of milk animals was not a very wise step as food fodder for these animals was not guaranteed. Their prices also varied according to seasonal variations in their demand. Another big critic of IRDP was the improper selection of beneficiaries. NABARD in one its surveys pointed out that although IRDP’s main objective is to select and implement on the poorest families, its inclination in reality has always been towards small and marginal farmers. In some districts, as much as 30% of the beneficiary families were small farmers with the poorest unskilled labourers, farmers and tribes being totally left out. This is because of the ease by which small farmers have access to credit and the preference of block officials extending credit to these people. Another major flaw was widespread corruption in the implementation process. Sarpanchs and influential members of
  • 21. 13 village communities with collaboration with bureaucrats and officers used to charge commissions and brokerage to poor villagers for them to avail subsidies and assets. Lastly, the myth that the programme was successful in targeting poor families and pushing them above the poverty line was uncovered by many economists like Nilkanth Rath who concluded that not more than 18.7% of the targeted families crossed the poverty lin. In fact, the figure of 18.7% could also be treated as an over-estimate. The initial figures suggested 47% families crossing the poverty line of Rs. 3, 500. But these were based on old prices. If current prices (1979-80) were to be considered, it was found only 18.7% families crossing the poverty line. Professor Rath believed that the poor were more interested in incomes rather petty assets like cows and camels which had no yields. IRDP had no such long-term provisions for poor families to increase their productivity and skills. It is unrealistic to believe the borrowing of loans and credit for small assets could result in increased incomes of the poor which in turn were assisted by widespread corruption and malpractices by the implementers. Jawahar Rozgar Yojana The Jawahar Rozgar Yojana (JRY) was launched in April, 1989 by the then Prime Minister Rajiv Gandhi. The NREP and RLEGP were merged into one entity called the Jawahar Rozgar Yojana. It was similar to Integrated Rural Development Programme with similar objectives and implementation procedures. Main objectives were to provide gainful employment for the rural poor so as to cross the poverty line and secondary objectives which included forming up of sustained assets for continuing benefits, subsequently increase the wage levels and to bring an overall improvement in rural life.
  • 22. 14 The JRY targeted people below the poverty line. Preference was given to SC/STs and bonded, unskilled labourers. At least 30% of the employment was to be provided to women. The first stream of JRY undertook some of the following works:  Social forestry works on government and community lands, plantations on road sides and gardens  Soil and water conservation works.  Village and its community water wells, canals and assets.  Community sanitary latrines.  Construction of rural roads.  Panchayat ghars, Mahila Mandals, dispensaries, schools and clinics. A total of 10.0 lakh wells were constructed with an expenditure of Rs 4, 021 crores by 1996-97. Additional 1 lakh wells were constructed during 1997-98. Under the second stream of JRY, the Indira Awaas Yojana (IAY) was launched as a sub-scheme of JRY. It aimed at providing houses to bonded labourers and SC/STs free of cost. The government had a fixed expenditure of Rs. 14, 000 and was enhanced to Rs. 20, 000 per house in view of the rise in the cost of building materials. A total of 67.5 lakh houses were constructed with a total expenditure of Rs. 11, 324 crores. Under the third stream of JRY, the Employment Assurance Scheme (EAS) was launched from 2nd October, 1993. Special and innovative projects were launched which aimed at women’s employment, special programmes through voluntary organizations. Besides, the
  • 23. 15 operation blackboard was undertaken to construct schools in rural areas. Concluding remarks Although the programmes and schemes launched by the government had been well intended and well planned on paper, on field there they suffered from poor implementation, corruption, non- percolation effects, unaware public of such programmes and hot reap benefits from them, insensitivity of officials towards deliverance, false statistical studies leading to Faux pas which in turn worsened implementation, an excessively centralized bureaucratic system where the officials were least concerned of the performance of these programmes, and many other reasons. That crores of rupees have been spent on such programmes, a disappointing truth that was visible in the last sixty five years of independence that these programmes have had little to no effects on long term employment generation. Though they were meant for generating ‘gainful employment’, only short term, temporary employment was generated. India had been suffering from chronic unemployment since the British days, what was needed was self-sustenance of rural and remote areas that could provide a long term employment for the locals and lead to a more long lasting income generation and livelihood. The programmes failed in this aspect. Further, the assets created by these schemes can only be judged by their productivity or the share they contribute towards national income. Much of these ‘assets’ were small or medium entities like tube wells, kaccha roads, small house for the rural poor, community centres, etc that remain in
  • 24. 16 neglect. Thus, a proper scrutiny only points out to a plethora of failed programmes. In the next part, we will observe some of the characteristics of the National Rural Employment Guarantee Act passed in 2005. How it differs from the previous programmes and hot it tries to change lives of the poor that could not be achieved through previous programmes, will be dealt with in the same part. A brief profile of the state of Gujarat was necessary to explain for NREGA’s working differs from state-to-state due to historical, demographic, economic and various other factors. In part III, some econometric analysis will be undertaken to look into the performance details of how NREGA has truly worked and how it can differ from one district to another leading us to final comparisons and conclusions for NREGA. Though such research is not meant to undertake government reporting, some future measures to improve the efficiency of the Act and how it can stand distinguished has not been done due to reasons already stated.
  • 25. 17 Part II The NREGA and methods for assessing its impact
  • 26. 18 Introduction to NREGA The National Common Minimum Programme of the UPA government in 2004 had specifically pledged to provide a National Employment Guarantee Act that could provide gainful employment to any adult individual of a family for a legal 100 days of labour on asset creating public works at a minimum wage. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was subsequently passed in the year 2005. Extending to the whole of India except Jammu & Kashmir, it was initially launched in some 200 districts of phase 1. Some of the main features of NREGA:  Every household willing to get voluntary employment will get the right to work for 100 days of guaranteed employment for at least one adult member. The employment will be in the form of casual manual labour at statutory minimum wage and the wage shall be paid within 7 days of work completion.  Work should be provided with 15 days of demand and within 5 kilometres of residence.  The state or the central government will hold the responsibility of securing gainful employment for every adult member of the household under a scheme for any period beyond the period guaranteed.  The state government will fix the wage rates in accordance to the Minimum Wages Act, 1948. It will be the responsibility of the state government to specify the different wage rates of different areas/districts.  If employment is not provided within the limits/allowance, then an employment allowance will be given daily which will be 1/3rd of the exiting wage rate.
  • 27. 19  In case of hazards encountered or any injury, the government will give hospitalization charges and a daily allowance of not less than ½ of the existing wage rate. In case of death of a worker during work, an ex gratia payment shall be made to his legal heirs.  An unemployment allowance to be provided within 15 days if the worker’s demand of giving employment is not met.  The district collector will be responsible for the overall working of the Act in the district.  The Gram Sabha will be monitoring the work through gram panchayat by way of social auditing.  Proper accounts and books of labourers and their wages to be maintained by every state government. Transparency and accountability to be maintained by the state governments.  Wages are to be paid directly to the beneficiaries. This is to ensure that no middlemen siphon out the funds.  The Act will be fully amendable by the Central government. All feedback will be transparent and the government will be open to all feedback and critic on the grounds that no such activity will be politically or institutionally targeted. The NREGA is divided into two schedules. Schedule I deals with minimum features of the employment scheme while schedule II deals with minimum entitlements provided to labourers by the Act. We shall discuss these schedules in brief as they are form an integral part of the provisions provided by the Act.
  • 28. 20 Provisions of Schedule I (Minimum Features of a Rural Employment Guarantee Scheme): This schedule explains the nature of assets, the provisions related to wage payment and the legal compulsions to the government regarding payment of wages, maintenance of accounts, preparing the list of area specific works, periodical inspection of works and providing any feed back to local officials. Some of the features of schedule I have been listed in brief: 1.Following works to be the main focus of the scheme: a. Water conservation and harvesting; b. Drought proofing including afforestation and tree plantation; c. Micro and major irrigation canals; d. Land development assets; e. Irrigated land to SC/ST families and families already under the ambit of Indira Awaas Yojana; f. Rural connectivity which includes roads and paved pathways; 2. Creation of durable assets for the rural poor as specified by the state and central government. 3. There should be a state council to prepare district/taluka specific works based on the degree of durable assets to be made there. 4. Wage paid to the labourers should not be less than specified by the state government, under no circumstances. 5. The wages are to be fixed by each state government in consultation with the state council for different types of works every year. Same pertains when wages are according to the quantity of work done.
  • 29. 21 6. Proper maintenance of the public assets to be a responsibility of state governments and thus appropriate arrangements have to be made by the state governments for proper monitoring of these assets. 7. Cost of projects/works undertaken in addition with the wages of unskilled and semi-skilled labourers shall not exceed 40% of the total project costs. 8. No contractors shall be allowed to participate in the project work under the Act. 9. Adequate provisions for ensuring transparency at all levels of implementation to exist within the framework. Such responsibility would be shared both by central and state governments. 10. The district programme coordinator shall develop an annual report of the status of the implementation of the scheme in his district, the works undertaken, wages offered to the labour according to projects, containing any achievements, facts and figures of the scheme. This report shall also be made public on demand at a legal fee as specified in the scheme. Provisions of Schedule II (Conditions for Guaranteed Rural Employment and minimum Entitlements of Labourers) This schedule contains conditions for the Act to be efficient on implementation and the entitlements to labourers that form are a legal compulsion to the state and central governments. Below is a list of some of the features of schedule II: 1. Any adult member of a household who’s willing to do voluntary manual work shall submit his/her application to the
  • 30. 22 nearest Gram Panchayat office in the jurisdiction in which he/she resides. 2. The Gram Panchayat shall register the household after making enquiry as it deems fit and issue a job card to the registered. 3. The registered person can request to the number of days of manual work and every member of the household shall be entitled to do the manual work wherever applied. 4. Applications for work will be at least for 14 days and there shall be no time limit as to the number of hours/days for the applicant to do any work subject to the aggregate entitlement of the household. 5. As far as possible, the work provided should be in the radius of 5 kilometres from the village where the beneficiary resides. In case the work is more than 5 kilometres, it should be within the block and extra wages of 10% should be paid to labourers as transportation and miscellaneous costs. 6. The Programme Coordinator of the block shall explain in writing to the District Programme Coordinator of why employment has not been provided in some blocks and the remedial measures undertaken to provide any missing employment to the labourers. The list of persons provided with work shall be listed with their addresses and sent to the Programme Officer. 7. If a person working under the scheme is injured, or is required hospitalisation, the government shall arrange for such accommodations as necessary. If encountered with death, the government shall make an ex gratia payment at the rate of Rs. 25,000 or any such amount as deem fit by the
  • 31. 23 Central government. The legal heirs of the deceased shall be paid the amount. 8. Various other facilities like safe drinking water, medical health boxes, and shades for cover shall be provided at the work site. 9. The wages shall be paid in the form of cash or direct cash. A portion of the wages can be paid to labourers on daily basis. 10. No discrimination on the grounds of gender, religion or caste/creed shall be made while giving out any employment and the provisions of the Equal Remuneration Act, 1976 will be complied with. Differentiating features of NREGA The differentiating features of NREGA are its main feature that distinguishes it from older programs released during the 1980s. The Act was passed by the Union government in 2005 largely due to the criticisms and failures faced by IRDP and NREP. Though well planned on paper with well intentions, they failed in showing long term effects, reasons being many, like scams & poor implementation. The NREGA has also been well designed, with full legal provisions for labourers and their families. The main differentiating feature of NREGA that separates it from the rest is the inclusion of the ‘right to work’ that seems to be similar to the Employment Scheme of Maharashtra of the 1970s. The right to work means that the beneficiary under the Act has the legal right to do any manual work with its details recorded and open for public scrutiny, get legally paid that is prescribed by the central government according to the work undertaken and claim the accorded payment whenever the person feels it has been siphoned off, has not been paid in due time or any
  • 32. 24 other reason of non-payment. This was a significant step towards welfare because the ambitious schemes of the 1980s and 70s had no such legal framework that provided for the labourers to claim their payment. The result was rampant corruption and siphoning off of wages. The idea was that such ‘legal wages’ would be the step towards increasing the livelihood of the labourers who were exploited or cheated by officials through siphoning, less payments for commissions. All such obstacles zeroed out all the well intentions. In contrast, a beneficiary under NREGA can go to the courts where officials will have to answer to any of felt their wrong doings. Further, the wages are directly transferred to beneficiaries’ bank accounts, thus leading to other positive effects like increase in savings and number of bank accounts, secure money in labourer’s hands and banking awareness. Having looked into the detail provisions of NREGA, we will now proceed on how an Act’s impact can be assessed. Assessing impact of an Act Measuring an Act’s impact can become a difficult task taking into consideration its entire ambit. A lot of parameters and clichés are to be taken into account for a proper statistical study to take place. For example, an Act meant to improve the housing conditions of the poor will have parameters like the quality of houses they live in, number of rooms in each house, basic facilities, and availability of electricity and water that have to be compared with similar parameters of previous accommodations. If the new houses provided by the Act show an improvement of living conditions, then the law could be regarded as a success.
  • 33. 25 But this is only a very arbitrary example. A history of Indian economic planning shows all our programmes were well planned on paper but suffered heavily on implementation, feedback, grievance and miscellaneous aspects. For example, though IRDP and NREP were ambitious programmes meant to provide ‘gainful’ employment to the poor every year, statistical studies found employment was provided on a large scale but with no benefits due to various reasons already stated above like siphoning off and non-payment of wages, lack of good legal framework and poor resource allocations. Thus, the whole intention of the programmes failed, most of the objectives were not met and the planners were forced to withdraw them because of their direct relation to increasing deficits on the budget. To be more specific, to research the impact of an employment generating Act, one has to scrutinise the following aspects:  The overall change in the levels of livelihood of the targeted population.  Whether it has resulted in changes in incomes, savings, and expenditures, miscellaneous benefits like new assets, new lands for cultivation, new housing facilities, and new electrical appliances like TV sets, radios and computers.  Whether the Act has resulted in providing long term objectives like better education, better food products, socio-political awareness and awareness of rights.  What kind of employment (long-term or short-term) has the Act generated on the targeted population? Has it stopped the long journeys and migrations to other cities that people make in search of jobs or has it remained the same throughout?  Employment generation means creation of such assets that prove fruitful to the economy and to the local population.
  • 34. 26  A successful Act ultimately results in increased per capita incomes in the long term. Methodology for assessing an impact Various methods could be used to asses and impact. Generally done through surveys and questionnaires, some specific area is first selected where a significant targeted population exists. For surveying NREGA as an example, such blocks of districts should be selected where significant SC/ST/OBC populations exist as NREGA specially targets these groups. Then comes the surveying where the surveyor does a basic research by first formulating certain assumptions of targeted sample, forms a suitable questionnaire for collecting information and then conducts the survey through the questionnaire or any other method the researcher sees fit. Aspects like living conditions, incomes, primary & secondary occupations, basic food consumption are some parameters the surveyor is always interested in while conducting a survey. The objective of the survey should be to collect suitable information so as to ascertain any changes made by the Act. Caution has to be considered while surveying as false information is bound to happen. Hence, Crosschecking becomes an important part of the study wherever untrue information exists. Finally, a comparative study is performed where a selected group of parameters are compared. Hence for example, if income level of an individual is to be compared whose been employed under NREP, we could do that by first stating a general hypothesis pertaining to any due changes in income levels, comparing those values and concluding the results. The results have to be unbiased and in such matters where an Act, law or a government entity is being
  • 35. 27 researched, political neutrality has to be maintained or the research’s objective is not achieved. The aim of the researcher is to throw light on the results and not state any criticism. Taking such views into account, how can one proceed to assess what NREGA has had on the lives of poor labourers? NREGA is a national level employment generating Act, meant to provide gainful employment. Though the Act might seem similar to previous programmes to a lay man, it differs in aspects that are distinguishing, so much so that it has resulted in the Act’s idea being mentioned in several territories outside India. Thus, as NREGA is as big as it seems, a proper study for national level will require a vast amount of personnel to bring about a huge research. However, formulating a local research doesn’t require much of resources to release comparatively smaller results that could prove helpful not only to private individuals but sometimes also to government authorities in providing a feedback. Policies are passed not only as a result of census scaled research but also due to research provided by private individuals. To assess NREGA in our selected districts, it is imperative to first throw light on the profile of the state of Gujarat. Its history, its traditions and demography, and economy have to be explained first for the research to continue. Every region has its own traditions and history; such factors determine the working of a national Act. Hence, an employment generating Act will benefit greatly in a region where significant unemployment exists in contrast to a region where employment figures indicate good going. In such regions an Act like NREGA would perhaps become more of a burden due to financial hogging it requires from the state and central government. Keeping
  • 36. 28 such assumptions to be true, we now proceed to understanding what Gujarat has to offer in terms of employment generation. Gujarat – history, economy and NREGA The Gujarat state is a West Indian province. It was formed on the 1st of May, 1960 by carving out 17 northern districts of the erstwhile Bombay state. Located on the Western coast, it has the longest coastline of 1, 600 kilometres and bounded by the Arabian Sea to the west and south west and by Pakistan and Rajasthan in the north, Maharashtra in the South & Madhya Pradesh in the east. The Capital of Gujarat is the city of Gandhinagar established a brief time after Gujarat’s independence on the lines of Union Territory Chandigarh, close to the historical city of Ahmadabad, which also happens to be the financial capital and the most populous city of Gujarat (7.20 million). The state has currently 26 districts, 226 taluka, 18,618 villages and 242 towns.
  • 37. 29 History of Gujarat The state took its name from Gujjars, an ethnic Indo-Aryan people who ruled the area during the 700’s and 800’s and inhabited till Afghanistan. Though exact origins remain vague, they might have been direct descendants of Scythian or the Sakas during the Hun invasions. There are also ancient structures like Lothal which belonged to the Harappa civilization. The state was ruled by major Indian empires and was an active trading hub since Harappan times. The Scythian tribes who later came to Gujarat were the result of Mauryan disintegration when the Shungas were unsuccessful in maintaining political unity. There was also a Greek incursion into Gujarat led by Demetrius. The greatest extent of Gujarat reached during the rule of Solankis who were believed to have been direct descendants of imperial Gujjars. The last Hindu rulers were from the Solanki clan of Rajputs. Karandev of Vaghela dynasty, the last Rajput ruler was eventually overthrown by superior forces of Allauddin Khilji in 1297. Prolonged Muslim rules of 400 years, Muslim invasions of Mahmud Gazni were major historical incidents. Gujarat remained an independent province under Muslim sultanates until 1576 when Akbar took control over the province with a successful expedition. The province remained under the Mughals till the late 1600s when there were Maratha incursions under Shivaji. Surat was ransacked by him. In the later years during declining days of Mughals, Maratha clans like the Gaekwad rulers took control of the southern territories of the state and made Baroda their capital, announcing their independence.
  • 38. 30 Gujarat has always a prosperous province, bringing in lot of revenues to all the regimes that ruled it. It was the trading hub during Mughals and also during colonial rule. The cotton of Gujarat was famous the world over. The Dutch, French, English and Portuguese merchants had all established trading centres to trade Indian valuables so prestigious in those times. When the British consolidated supremacy over other European powers, Gujarat was their major trading port. Most of the raw materials, merchandise and machines made with Indian hands were traded from ports in Gujarat. The Calico mills in Ahmadabad are a testament to the finesse achieved by Indian artisans in selling clothes that were renowned the world over. The modern day Gujarat After India gained independence in 1947, a conference took place in 1948 to merge all the Gujarati speaking areas of Gujarat, Kutch and Saurashtra into one autonomous province. The term ‘Mahagujarat’ was thus coined to unite the whole of Gujarati speaking areas. Eventually, on 1st May 1960, the erstwhile Bombay state was split into two, Maharashtra and Gujarat. For the first time after the sultanate, Gujarat became independent. Ever since, the state has had 16 chief ministers. In 1995, after major losses to the BJP government, congress stepped down and Keshubhai Patel came to power. After losing 2 seats in the by-elections in 2001, Keshubhai resigned and gave way to Narendra Modi who has ever since been the chief minister. The economy and NREGA in Gujarat Gujarat is, like most other states of India, predominantly agricultural though highly industrialised. The state is ranked the second most
  • 39. 31 economically free state after Tamil Nadu, according to the report by Cato institute on state economic freedom. Major agricultural produce of Gujarat includes groundnut, milk and milk products, sugarcane and cotton. Ahmadabad, Surat, Baroda and Jamnagar are major industrial cities with Surat as being ranked one of the fastest growing cities in the world after Chengdu in China. The ship breaking yard in Alang is the world’s largest. With some staggering indicators like India’s longest gas line grid (2,200 km), 98.86% of village connectivity through all weather roads and 98% of highways being asphalt surfaced, Gujarat is indeed an industrial trading hub. Nearly 100% of Gujarat’s 18,000 villages have 24-hour power connectivity. The state also records the highest agricultural decadal growth rate of 10.97%. The GSWAN (Gujarat State Wide Area Network) is the largest ISP in Asia Pacific region and 2nd largest in the world connecting 225 taluka through 12, 000 nodes. Noted as the growth engine of India, the infrastructure of Gujarat is well known to rival that of Guangdong, the economic engine of china, according to The Economist. As for NREGA is concerned, there cannot be a pinpoint conclusion as to the degree of quality of implementation in the state. However, some official statistical figures could throw some light on this. For example, according to NREGA state brief report, the total central share was Rs. 894.86 Crores in 2010-11, and Rs. 324.29 Crores was released in 2011-12, a reduction. Likewise, in 2011-12, 570 lakh person days of employment generation was projected with an achievement of 311.21 person days. In addition, a total of 38, 16,745 households were issued job cards in 2011-12 against a projected 8, 68,748 households. Of these households that were provided cards, only 2, 16,796 households got employment. Against the projected 3,
  • 40. 32 02, 71,524 persondays projected, a total of 2, 16, 59,433 persondays was generated. Considering such staggering achievements however, only 33, 391 households completed 100 days of guaranteed work, less than the figure of 41, 442 in the period 2010-11. That is less than half of the people who got employment and even lesser the number of people who were issued job cards. This means that certain amount of wastage of government funds in issuing job cards when there is no availability of work or rather incomplete work provided. Gujarat also reports a comparatively lower wage rates compared to other states. For example, in the year 2010-11, the average NREGA wage was Rs. 65 as compared to Rs. 100 offered in Haryana, Uttar Pradesh, Punjab and Rs. 120 in Kerala. It stands on level to states like Maharashtra and Andhra Pradesh and North Eastern states where comparatively low wages prevail. Considering such figures not to be falsifying to the layman, one can roughly conclude the average implementation of NREGA in the state. Reasons could be many, though Gujarat has an efficient bureaucracy, the government is not centrist. It’s a normal phenomenon that schemes face obstacles when the ruling party in the state differs from the one in New Delhi. Concluding part I, we will now proceed to the next session. In part II, we analyze the impact of NREGA in two tribal districts and test the Act’s success in bringing about considerable changes. We then compare the results of the two districts and check which one performs better. This is to be done to observe any kind of irregularity in the implementation process in the districts. Lastly, the conclusion regarding the overall experience of NREGA will be undertaken.
  • 41. 33 Part III Assessing and comparing NREGA’s impact
  • 42. 34 Assessing NREGA in Sabarkantha district The northern district of Sabarkantha, located 73.39° East longitude and 23.03° North latitude, derives its name from Sabarmati River that separates the district from the neighbouring districts. The district is bordered with Rajasthan state in the north, Banaskantha and Mehsana district in the west and Gandhinagar, Kheda and Panchmahal district in the south. Himmatnagar is the district headquarters. Average rainfall remains low at 500-1000 mm and high temperatures with maximum being 40.5° C and lowest being 9.09°C. It has a population of 2,082,531, mostly SC/STs and OBCs and less density with 282 persons per sq. kilometre. A moderate 67.31% of literacy exists. The district is heavily dependent on agriculture and Dairy Farming. It is the highest producer of Cereals, Indian jujube and Pomegranate in the state. Minerals like bauxite and clay are abundant thus opening up industries of cement, clay, silica and tiles. Major food crops, oil seeds, fruits are produced on the district which include wheat, castor, mango and groundnut, tobacco, mango and pomegranate. The district consist of some major industries like Sabar Dairy which supplies milk products in the district, Eureka tiles, Gujarat Ambuja Exports Ltd., Pathik Agrotech Ltd., etc. Some 8, 000 small scale industries employing some 34, 200 people are located here. Walls,
  • 43. 35 floor tiles, chemicals, plastic and plastic products, commercial office and household equipments are some major small scale industries. The region has rich agriculture and fertile land. Major sections of society depend on agriculture for livelihood. The district has very good rail & road infrastructure with 24 railway stations which connects the state cities and neighbouring state of Rajasthan. Assessing impact on incomes Just like we did an analytical study of Baroda district for the Taluka of Chhota Udaipur, we shall observe and analyse the trends in Sabarkantha district. The Sabarkantha district is characterised by tribes that inhabit large parts of southern Rajasthan and neighbouring districts in the west. These are mostly Bhil tribes, dominant being Garasias, Damors, Modias, kolis and Dhodias among others. They are rural, mostly poor but a lot of them could be found in higher occupations of government. Some from these tribes get recruited as doctors and government servants through the state public service commission and hence distinguish themselves from the southern tribes of Gujarat in literacy. To analyze some observations, let us look at some data.
  • 44. 36 Table 1 Yearly incomes (records 1-15) Table 1 shows yearly incomes of records 1-15 for villages Gambhirpur, Abhapur and Bandhana. Here, the tribes of Modias and Garasias exist. We observe a fairly equal wage rates for all records and also more or less equal incomes earned, unlike in Baroda district where income disparity exists. The average incomes of this district are: 0 2,71,440/15 .14,400x Rs  Record no. NREGA wage (Rs.) Yearly NREGA income (Rs.) Yearly income without NREGA (Rs.) X0 Yearly Income with NREGA (Rs.) X1 1 Rs. 110.00 Rs. 39,600.00 Rs. 43,200.00 Rs. 82,800 2 Rs. 120.00 Rs. 43,200.00 Rs. 72,000.00 Rs. 1,15,200 3 Rs. 115.00 Rs. 41,400.00 Rs. 64,800.00 Rs. 1,06,200 4 Rs. 117.00 Rs. 42,120.00 Rs. 52,200.00 Rs. 94,320 5 Rs. 105.00 Rs. 37,800.00 Rs. 46,800.00 Rs. 84,600 6 Rs. 100.00 Rs. 36,000.00 Rs. 59,400.00 Rs. 95,400 7 Rs. 100.00 Rs. 36,000.00 Rs. 61,200.00 Rs. 97,200 8 Rs. 134.00 Rs. 24,120.00 Rs. 32,400.00 Rs. 56,520 9 Rs. 140.00 Rs. 16,800.00 Rs. 39,600.00 Rs. 56,400 10 Rs. 135.00 Rs. 9,720.00 Rs .23,400.00 Rs. 33,120 11 Rs. 134.00 Rs. 12,864.00 Rs. 54,000.00 Rs. 66,864 12 Rs. 132.00 Rs. 31,680.00 Rs. 36,000.00 Rs. 67,680 13 Rs. 75.00 Rs. 1,125.00 Rs. 39,600.00 Rs. 40,725 14 Rs. 65.00 Rs. 1,300.00 Rs. 36,000.00 Rs. 37,300 15 Rs. 100.00 Rs. 1,000.00 Rs. 50,400.00 Rs. 51,400 Total Rs. 1682.00 Rs. 374,729.00 Rs. 216,000.00 Rs. 885,731.00
  • 45. 37 1 5,71,500/15 59,048x   This means that there is a notable increase of income of about 4.10 times of yearly income excluding NREGA. Plotting the data, we get the following curves: The above figure shows the yearly incomes of the sample excluding the income earned through NREGA. It is a fairly consistent curve with incomes ranging from a minimum of Rs. 10, 000 to Rs. 26, 000 thus pointing out to the poverty levels that exist. All the samples were BPL families. When we observe yearly income when NREGA is added, we get the following curve: 0 5000 10000 15000 20000 25000 30000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 yearlyincome(Rs.) Record no. Figure 1 yearly incomes including NREGA
  • 46. 38 What we observe here is increase in incomes, minimum being at the range of Rs. 22, 000 to a maximum of Rs. 71, 000. Income disparities do exist between the samples even after NREGA has been added. We compare the two different incomes through the following curves: 0 10000 20000 30000 40000 50000 60000 70000 80000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Yearly incomes excluding NREGA 0 20000 40000 60000 80000 100000 120000 140000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Sum of Yearly income2 (without NREGA) Sum of Yearly income1 (NREGA+secondary+primary)
  • 47. 39 The above curve shows total yearly incomes of the sample. This includes NREGA, secondary and income earned by minor agriculture produce and labour. What do we observe here? Some of the families earned more, pointing out to the level of disparities that exist. This is because villagers of one village benefitted greatly from NREGA while others did not. In analysing 3 villages of the Taluka, 2 of them benefitted because of regular work being provided and regular payment of wages. Furthermore, 10 samples of 2 villages were engaged in farm labour which does not come under NREGA while one village was solely dependent on a small plantation nursery where 5 people were surveyed. These villagers of Abhapur village did not engage in any other work or business. Though from the above figure one can ascertain major increase in incomes, we will have to test whether NREGA has had a significant impact on the incomes of the select sample. For this, we use some statistical and econometric techniques. We provide data through statistics while assessing the impact is done through regression which is an econometric method. Let us now proceed to assessing the real impact of incomes. Table 2 Data showing yearly with NREGA and secondary wage income Record No. Yearly NREGA income (Rs.) X1 Yearly secondary wage income (Rs.) X2 Total yearly income (Rs.) Y (dependent) 1 Rs. 39,600.00 Rs. 43,200.00 Rs.82,800 2 Rs. 43,200.00 Rs. 39,600.00 Rs.1,15,200 3 Rs. 41,400.00 Rs. 64,800.00 Rs.1,06,200 4 Rs. 42,120.00 Rs. 52,200.00 Rs.94,320 5 Rs. 37,800.00 Rs. 46,800.00 Rs.84,600 6 Rs. 36,000.00 Rs. 59,400.00 Rs.95,400 7 Rs. 36,000.00 Rs. 61,200.00 Rs.97,200
  • 48. 40 8 Rs. 24,120.00 Rs. 32,400.00 Rs.56,520 9 Rs. 16,800.00 Rs. 39,600.00 Rs.56,400 10 Rs. 9,720.00 Rs. 23,400.00 Rs.33,120 11 Rs. 12,864.00 Rs. 54,000.00 Rs.66,864 12 Rs. 31,680.00 Rs. 36,000.00 Rs.67,680 13 Rs. 1,125.00 Rs. 43,200.00 Rs.40,725 14 Rs. 1,300.00 Rs. 39,600.00 Rs.37,300 15 Rs. 1,000.00 Rs. 64,800.00 Rs.51,400 Total Rs. 374,729.00 Rs. 700,200.00 Rs. 885,731.00 The above table shows data regarding the total yearly incomes earned which includes NREGA and secondary or other incomes, total yearly NREGA income earned and total yearly secondary incomes earned. To test at what degree the two incomes impact the total yearly incomes, we will run some regression analysis on the dependent variable, in this case the total yearly income. Hypothesis H0: the total NREGA and secondary income significantly impact the total yearly income, i.e. 1 2, 0   H1: the total NREGA and secondary income do not significantly impact the total yearly income, i.e. 1 2, 0  
  • 49. 41 Calculations When we run regression for the above known data for total yearly income on NREGA and secondary income, we get the following regression line: The above figure shows relationship between the actual known incomes of NREGA and secondary incomes with that of the known yearly income in the form of scatter plot matrix. A scatter plot matrix explains variables neatly in matrix form. We get these results in mathematical form: Yearly income vs. NREGA & secondary income scatter plot matrix
  • 50. 42 1 2 2 2 1 2 1 2 ˆ 6827.03 1.22 0.77 0.916 0.902 . ( ) 0.14, . ( ) 0.30 ( ) 8.30, ( ) 3.736 y R R s e s e t t                The results show that for any known independent variables 1 and 2 , the wage income increases the total yearly income by Rs. 1.22 while the secondary wage income increases the total yearly income by Rs. 0.77 only. This means that NREGA is more significant in contributing to total yearly income than any secondary job. Further, the R2 value is 0.91 which means that NREGA and secondary jobs alone contribute to some 93% of total yearly income earned by the sample population. This means the predominance of daily wage jobs in the district. The tribal people do not engage much in agriculture and self sufficiency. The standard errors of both the variables are very small, 0.14 and 0.30 which indicates adherence to BLUE properties. Most importantly, the t-value for NREGA wage income 1( ) comes out to be 0.30 which is much less than the critical t-value of 2.160 thus accepting H0 for the results say that NREGA alone significantly impacts total yearly income more than secondary jobs which has a t- value of 0.37. When the yearly income alone is regressed with NREGA income, we get the following results:
  • 51. 43 As can be clearly seen, NREGA alone significantly impacts the yearly incomes of the sample populations. With a R2 value of 0.81, we can very readily conclude the explanation of yearly incomes by NREGA income to be 81%. The results can be summarized in the following mathematical form: 1 2 ˆ 3595 1.45 0.81 y u R     Yearly vs. NREGA income
  • 52. 44 1 2 1 1 ˆ 3595 1.45 0.81 . ( ) .189 ( ) 7.685 y u R s e t          At 13 degrees of freedom, the t-value comes out to be 7.685 which is more than the critical t-value of 2.160 thus accepting the hypothesis and concluding that NREGA does significantly impact the total yearly income. We shall now proceed to analyzing the impact secondary wage income has on the yearly incomes. First, to reproduce the mathematical curve: We may summarize the above curve in the following mathematical equations: 30000 40000 50000 60000 4e+046e+048e+041e+05 Secondary income Yearlyincome Yearly vs. Secondary income
  • 53. 45     2 2 2 2 ˆ 5069 1.48 0.43 3.18 . 0.48 y u R t s e          With a R2 value of 0.43, means 43% of the yearly income data is explained by the secondary wage income. This means that although secondary wages do contribute to the yearly incomes, it is lesser than NREGA income which explained 91% of the results. The standard error is small (0.48) which indicates BLUE properties. Further, the calculated t-value is 3.18, more than the t-critical value of 2.160 at 14 degrees of freedom which points out to the significance secondary wage has on the yearly incomes.  Assessing migration patterns The Sabarkantha district is predominantly tribal. Mostly engaged in agriculture and labour, they keep migrating to far off urban areas in search of gainful employment where they work for temporary time periods and return to home villages where they engage in agriculture and self sufficiency. When the season is not right for cultivation, they migrate. However, not all tribal communities are migratory. Like we shall observe, the people in this district are least migratory, mostly engaging in local farm labour whenever NREGA is unavailable. In contrast, other areas like the southern districts of Dangs and Baroda, tribes are in continuous migration for temporary periods. Reasons like better living conditions in their home villages, comfortable daily wage jobs in local areas can effect migration. In the southern districts, where the terrain is somewhat hilly with dense jungles, it is
  • 54. 46 hard to find jobs in local farms, due to which the tribes of South are more susceptible to seasonal migrations. Table 3 Data showing migration pattern (records 1-15) Record no. Migration Place Value (Y) NREGA income (X) 1 No NA 0 Rs. 39,600.00 2 No NA 0 Rs. 43,200.00 3 No NA 0 Rs. 41,400.00 4 No NA 0 Rs. 42,120.00 5 No NA 0 Rs. 37,800.00 6 No NA 0 Rs. 36,000.00 7 No NA 0 Rs. 36,000.00 8 No NA 0 Rs. 24,120.00 9 No NA 0 Rs. 16,800.00 10 No NA 0 Rs. 9,720.00 11 No NA 0 Rs. 12,864.00 12 No NA 0 Rs. 31,680.00 13 No NA 0 Rs. 1,125.00 14 No NA 0 Rs. 1,300.00 15 No NA 0 Rs. 1,000.00 The above table shows the migration pattern of the 15 samples, relating to their NREGA income. Unfortunately, no proper relationship could be established between NREGA and migration values (0 for ‘No’, 1 for ‘yes’) due to some calculation errors.
  • 55. 47 Nevertheless, it can be clearly seen that there does not seem to be any relationship between the income earned through NREGA and the migration pattern observed. All the samples had not migrated to any other district, urban area, or outside state looking for work. When asked why, their responses were towards satisfaction for what NREGA has to offer, resulting in decreased migrations. One of the main reasons for absence of migrations in this area is due to the regularity and implementation of the Act observed. Wages are consistent & uniform, paid in timely manner by the authorities and regular availability of projects that has led to discarding the usual daily wage jobs available in cities which results in exploitation and extra costs of health and transport. The other reason could be education. Education leads to better awareness of the individual’s rights and obligations. Tribal people in Sabarkantha are quite well educated when compared to some other backward tribes of Gujarat. This is the reason why many individuals from the northern districts have recruited in government and private services, some of them being members of state legislature and armed forces. With better education, tribal people also have the weapon to go to the courts wherever they feel any misconduct or infringement of their rights. While such factors were not surveyed, they could have been one reason why regularity of wages is observed as compared to districts of lower education. In the next part, we analyze what impact NREGA has had on incomes and migration patterns in Baroda district where tribes have somewhat different habits of occupation and migration. The tribe we surveyed was the Rathwa tribe, a scheduled dominant tribe of the region around Chhota Udaipur, the eastern part of Baroda that
  • 56. 48 borders the state of Madhya Pradesh. As we shall observe, NREGA in Baroda hasn’t had such major impacts on incomes though there is a pattern of migration observed. We shall now proceed to some calculations for Baroda district.
  • 57. 49 Assessing NREGA in Baroda district The Baroda district, also called ‘Vadodara’ (meaning ‘Sanskar Nagiri’ in Sanskrit), located 72.51 to 74.17 East longitude and 21.49 to 22.49 North latitudes is the southern district of Gujarat, sharing borders with the state of Madhya Pradesh in the east. It is a progressive district with the city of Baroda; on the banks of river Vishwamitri, is the biggest city and the district headquarters as, it is the second populous city after Ahmadabad. The city has rich history and is famous for its palaces, parks, temples and museums. The district has 12 taluka, 15 towns and 1,518 villages. Population of 3.64 million, it is moderately populated with 482 persons/sq. km and a sex ratio of 919 females per 1000 males. It has an impressive literacy rate at 70.76%. The district is distinguished for its major industries in chemicals and fertilizers, pharmaceuticals, machine tools, glass, tobacco, fisheries and dairy. Some big PSUs like Gujarat Alkalis and Chemicals Ltd (GACL) and Gujarat State Fertilizer & Chemicals Ltd (GSFC) are located here. Major crop production includes Rice, wheat, Sorghum, yellow peas, Grams, oilseeds, groundnut, cotton and sugarcane. It is
  • 58. 50 also a major fruit producing district with contribution of 11.25% of the state’s fruit coming from Baroda. There are over 18,000 registered SSIs (Small Scale Industries), maximum being in the repairing and servicing industry (5, 713) units. Other key small scale industries include textiles, metal works, chemicals, rubber products and food products.  Assessing impact on incomes We shall now proceed with measuring incomes of the labour population. The Baroda district has significant tribal population with Rathwas as a major Scheduled Tribe. These rural tribes live in remote villages in the eastern side of the district, around Chhota Udaipur which is an underdeveloped if we compare to the western areas, around Baroda city. Just like all other tribes in India, they live a rural life. The research was conducted in Kevdi and Dhodisamal villages of Chhota Udaipur district. Let us first observe some basic data before going further into scrutinising the results. Note: The Baroda district comprises of records 16-31.
  • 59. 51 Table 7 Yearly incomes of labourers (record 16-31) *= inadequate/incorrect data. Taking out the averages of X1 and X0, we get, Similarly, .00 Record no. NREGA wage (Rs.) Yearly NREGA income (Rs.) Yearly Income with NREGA (Rs.) X1 Yearly income without NREGA (Rs.) X2 16 Rs124.00 Rs.14,880.00 Rs.1,35,420 Rs.1,20,540.00 17 Rs130.00 Rs. - Rs.72,450 Rs.72,450.00 18* Rs120.00 Rs.840.00 Rs.30,840 Rs.27,000.00 19 Rs124.00 Rs.620.00 Rs.71,420 Rs.70,800.00 20* Rs126.00 Rs. - Rs.64,350 Rs.64,350.00 21 Rs124.00 Rs.1,240.00 Rs.1,08,940 Rs.1,07,700.00 22 Rs.100.00 Rs.6,000.00 Rs.79,440 Rs.73,440.00 23* Rs100.00 Rs.36,000.00 Rs.72,000 Rs.36,000.00 24* Rs124.00 Rs.44,640.00 Rs.95,040 Rs.50,400.00 25 Rs100.00 Rs.2,000.00 Rs.95,630 Rs.93,630.00 26 Rs115.00 Rs.27,600.00 Rs.1,28,220 Rs.1,00,620.00 27 Rs124.00 Rs.2,480.00 Rs.1,30,160 Rs.1,27,680.00 28 Rs136.00 Rs.8,160.00 Rs.70,620 Rs.62,460.00 29 Rs127.00 Rs.2,540.00 Rs.73,340 Rs.50,800.00 30 Rs135.00 Rs.2,700.00 Rs.1,08,540 Rs.1,05,840.00 31 Rs124.00 Rs.18,600.00 Rs.65,700 Rs.47,100.00 ∑=16.00 ∑=Rs. 151,960.00 ∑=Rs. 902,115.00 ∑=Rs. 710,815.00
  • 60. 52 Thus, on an average scale, incomes without NREGA were Rs. 44, 425 while incomes with NREGA came out to be Rs. 53, 382.18 which is equivalent 1.20 times of incomes without NREGA. We get the following figures when the above data is plotted: The above figure shows the yearly incomes of the sample excluding NREGA i.e. the income earned in skilled labour and farm yields added together. This can be hypothetically seen as average earnings when an Act like NREGA was not implemented. Record numbers have been shown on the x-axis while Incomes have been shown on the y-axis. The bold blue line connects the corresponding data points. Let us proceed to incomes of the same sample when NREGA is added and compare the two. 0 20000 40000 60000 80000 100000 120000 140000 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Yearly incomes excluding NREGA
  • 61. 53 Above figure shows a modified version of the preceding graph when yearly income was analyzed with addition of the total NREGA income earned. We clearly observe an increase in incomes. If NREGA never existed, the maximum a labourer could earn is Rs. 90,000 while for NREGA an addition of Rs. 10,000 makes it quite noticeable for any layman. We will now compare the yearly incomes with and without NREGA and attempt to calculate the differences between the two. This is to be done to test if NREGA has had major impacts on the incomes after its implementation in seven years or does it remain the same. First off, an overall increase in the incomes can be shown through a simple graphical device. 0 20000 40000 60000 80000 100000 120000 140000 160000 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Yearly incomes including NREGA Total
  • 62. 54 The above figure shows a comparative aspect of the yearly incomes with and without NREGA. Barring a few observations of Record 18 and 22, what we roughly observe is a slight increase in yearly incomes of the sample by certain points. Here too, there is disparity observed. For example, records 22, 24, 26 and 29 show major increase in their incomes when NREGA was added. Though an overall improvement is witnessed, we still need to test whether there has been a significant impact or not. For this, we first need to establish a relationship between increase in yearly incomes due to NREGA and secondary wage income. This means the dependency of yearly income on yearly wage income under NREGA and secondary occupations the workers have performed. Such calculations have to be done through regression where the cause and effect relationship is established between the dependent variable (in this case the total yearly income) and the independent variables (NREGA and secondary incomes in our research). When the relationship is established, we 0 20000 40000 60000 80000 100000 120000 140000 160000 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Total Yearly incomes Sum of Yearly income1 (NREGA+secondary+primary) Sum of Yearly income2 (without NREGA)
  • 63. 55 test how significant the dependency is through testing of a stated hypothesis. When the stated hypothesis comes out to be true, we accept the notion that there is significance in the analysis. Thus, we now move on to stating the hypothesis. Hypothesis H0: NREGA and secondary incomes have had a significant impact on total yearly incomes i.e. 1 2, 0   H1: NREGA and secondary income do not significantly impact total yearly incomes i.e. 1 2, 0   Table 8 Total Yearly income vs. NREGA + secondary incomes Record No. Yearly NREGA income (Rs.) X1 Yearly Secondary wage income (Rs.) X2 Total yearly income (Rs.) Y (dependent variable) 16 Rs. 14,880.00 Rs. 45,000.00 Rs. 1,04,520.00 17 Rs. - Rs. - Rs. 65,250.00 18 Rs. 840.00 Rs. 33,000.00 Rs. 33,840.00 19 Rs. 620.00 Rs. 45,000.00 Rs. 65,870.00 20 Rs. - Rs. - Rs. 18,000.00 21 Rs. 1,240.00 Rs. 45,000.00 Rs. 56,160.00 22 Rs. 6,000.00 Rs. 45,000.00 Rs. 49,500.00 23 Rs. 36,000.00 Rs. - Rs. 81,000.00 24 Rs. 44,640.00 Rs. - Rs. 95,640.00 25 Rs. 2,000.00 Rs. 45,000.00 Rs. 83,000.00 26 Rs. 28,800.00 Rs. 45,000.00 Rs. 1,14,300.00
  • 64. 56 27 Rs. 2,480.00 Rs. 90,000.00 Rs. 1,13,480.00 28 Rs. 7,800.00 Rs. 45,000.00 Rs. 62,400.00 29 Rs. 2,480.00 Rs. 45,000.00 Rs. 65,480.00 30 Rs. 2,480.00 Rs. 60,000.00 Rs. 93,980.00 31 Rs. 18,600.00 Rs. 30,000.00 Rs. 56,100.00 Totals Rs. 152,520.00 Rs. 360,000.00 Rs. 858,523.00 A rough assessment the influence NREGA and secondary incomes have on the total yearly incomes of the sample population could be made out through table 8. In Gujarat, the indigenous tribes do skilled and unskilled jobs for a daily wage. This is usually in seasons when not enough work is available in villages resulting in long migrations to urban areas where daily wages are earned. As we shall observe, there is a significant contribution of NREGA to the yearly incomes. In establishing a relationship we first need to state those variables that are dependent and those that are independent. The yearly income in this case is the dependent variable (Y) while NREGA (X1) and secondary incomes (X2) are independent variables. As we have to test at what significance these two incomes have on the yearly income, so is the relationship of dependency on independents. The dependent variable is normally denoted by a capital ‘Y’ while the independents are denoted as ‘X’. When multiple variables are involved, we use subscripts to separate them. Running regression on the data given in table 8 for 16 observations of Baroda district, spread in villages of Kevdi and Dhodisamal, we got these results.
  • 65. 57 (0.1) 1 2 1 2 1 2 2 2 ˆ 20108 1.601 1.285 ( ) 0.363, ( ) 0.223 ( ) 4.410, ( ) 5.76 0.728 0.686 y u se se t t R R                 Where, ˆy is the estimated value or the equation of prediction for the total yearly incomes; ˆu is the error term, 1 and 2 the estimated coefficients for the independent variables. The R2 value denotes the ‘goodness of fit’ of the trend line with the data points. R2 in this case is 0.68 which denotes 68% of the yearly income data explained by the wage income data comprising NREGA and secondary incomes. It’s a pure case of multi-collinear relation of 3 variables. A curve will explain these mathematical equations in graphical form as shown below
  • 66. 58 The relationship is quite clear from the above scatter plot matrix. A straight linear trend line is observed with an R2 value of 0.728, matching exactly to the calculated equation. The conclusion through the stand error and the t-values is also quite clear. A low standard error denotes the existence of BLUE properties of estimators 1 and 2 . The t-value comes out to be 4.410 for NREGA and 5.76 for the secondary income. This clearly points out to the conclusion that both NREGA and secondary wages significantly impact the yearly incomes and that more than half of the yearly income depends on these two variables. Total.NREGA.income 0 20000 60000 01000030000 02000060000 Total.Sec..income 0 10000 30000 40000 80000 120000 4000080000120000 Yearly.income1..NREGA.secondary.primary.
  • 67. 59 Having established and testing this relationship, we will now test at what level does NREGA and secondary wages impact the yearly incomes when they are both separated and tested individually. This means a simple linear regression to be run. Let us proceed to stating the hypothesis. Hypothesis H0: NREGA alone significantly impacts yearly incomes of the sample i.e. 1 0  H1: NREGA doesn’t significantly impact yearly incomes i.e. 1 0  This hypothesis has to be tested mathematically through regression as shown below. Note: Refer table 2 for the above figure. 40000 60000 80000 100000 120000 010000200003000040000 NREGA income Yearlyincome
  • 68. 60 Figure 10 shows the relationship between NREGA and observed total incomes. Representing the regression line in mathematical form, we get these results: 1 2 1 1 ˆ 8370 0.374 .033 . ( ) 0.533 ( ) 0.701 y u R s e t          What do we observe from the above data? The R2 value comes out to be 0.033 which means that only 3% of the yearly income is totally explained by NREGA wage income. This means that the rest of 97% of yearly income comes from other sources of income. The t-statistic [ 1( )t  ] comes out to be 0.701 which is the calculated value. For 14 degrees of freedom, 2.715calt  is the critical region value. The value 0.701 lies within the normal probability curve between -2.715 and +2.715, ( 2.715 2.715)calt    thus accepting the null hypothesis H0 that NREGA individually does not heavily impact the yearly incomes of the sample population. Next, we shall observe the impact secondary jobs have on the sample yearly income. Hypothesis H0: Secondary income does not play a significant impact on the yearly incomes of the sample i.e. 2 ~ 0 . H1: NREGA plays a significant impact on the yearly incomes i.e. 2 0  Drawing mathematical curve to calculate the above hypothesis, we get the following results:
  • 69. 61 Note: Refer table 2 for above figure. The mathematical formulations for the above curve are: 2 2 2 2 ˆ 5971 0.078 0.32 ( ) 2.574 . ( ) 0.275 y u R t s e          What can we make out from the above formulations? The R2 comes out to be 0.32 which means that 32% of the yearly income can be predicted through secondary income. The standard error of the independent coefficient 1 is 0.275 which is a good indicator of a linear, unbiased estimator. The t value of the coefficient is 2.574 which lies within the critical region of -2.715 and +2.715, thus 40000 60000 80000 100000 120000 020000400006000080000 Secondary income Yearlyincome
  • 70. 62 accepting H0 that secondary incomes on an individual scale do not significantly impact the yearly incomes. Assessing migration patterns The tribal communities of Chhota Udaipur district have always been engaging into migration for ends to meet. Since the beginning, these communities migrate in seasonal time frames to urban areas where they get skilled and unskilled jobs like carving, domestic work, and helpers on contractual basis in households and industrial units. In India, prior NREGA, as we have already seen, the employment provided was not proper and the workers were forced to migrate in search of jobs because they did not see much yield on farming alone. The district of Chhota Udaipur is an industrially backward, poor district with lack of even the most basic rail infrastructure. Besides, it is not efficiently irrigated. If it were to be irrigated, the people would have to undergo education on how to use irrigation techniques and new seeds for better yields. What we find in this district is poor education and high dropout rates. Thus, the tribes depend on secondary skilled and unskilled jobs for their livelihood. Certain belief exists that because NREGA has been fruitful in providing better results and livelihood to poor communities, the result is they prefer to live in their own villages or nearby areas because NREGA gives them enough work for indulgence for almost a whole year. This brings us to a speculation that NREGA should have decreased the migration to other cities since its implementation. Whether this is true has to be observed again through some statistical techniques. In this sub-study, we will observe whether the NREGA income the population earns in a year has been successful in suggesting them to stop migration to urban areas. First, let us state
  • 71. 63 the hypothesis, and then carry on with some data and lastly the results. Hypothesis H0: the yearly NREGA income has had positive impact on migration patterns i.e. migration to other cities has decreased i.e. 1 0  . H1: Yearly NREGA income has had no impact on migration patterns i.e. 1 0  . Table 3 Migration data of sample population Record No. Migration Place Value(Y) NREGA income (Rs.) (X) 16 Yes Visalpur, Ahmadabad 1 Rs. 14,880.00 17 Yes Mandvi, Kutch 1 Rs. - 18 No NIL 0 Rs. 840.00 19 Yes Visalpur, Ahmadabad 1 Rs. 620.00 20 Yes Rajkot, Saurashtra 1 Rs. - 21 Yes Kalawar, Saurashtra 1 Rs. 1,240.00 22 Yes Visalpur, Ahmadabad 1 Rs. 6,000.00 23 No Nil 0 Rs. 36,000.00 24 No Nil 0 Rs.
  • 72. 64 44,640.00 25 Yes Morbi, Rajkot dist. 1 Rs. 2,000.00 26 Yes Padamba,Baroda dist. 1 Rs. 28,800.00 27 Yes Motwadhara, Kalawar dist. 1 Rs. 2,480.00 28 Yes Limdi, Rajkot dist. 1 Rs. 7,800.00 29 Yes Visalpur, Ahmadabad 1 Rs. 2,480.00 30 Yes Khorana, Rajkot dist. 1 Rs. 2,480.00 31 Yes Visalpur, Ahmadabad 1 Rs. 18,600.00 When we plot the above values for x and y on a curve the result is this: We shall now attempt to calculate the relationship migration has with NREGA. With a R2 value of 0.33, dependency of migration on NREGA income is of the degree of 33%. Also the regression equation, 0.986 1.646y x  suggests a negative relationship. The results for the above curve can be summarised as follows: 1 2 1 ˆ 0.556 .02 0.026 ( ) .612 y R t       The t value comes out to be .612 which is lower than the lower critical tail value of 2.145 at 14 degrees of freedom. The null hypothesis is thus rejected and we can fairly conclude that NREGA has had no impact on migration pattern of the sample population. How do we analyze the migration pattern? Though the above results suggest that NREGA hasn’t had much impact on migrations, it also suggests that the phenomenon seems to have increased over the years. An employment generating Act should contain long migrations
  • 73. 65 by providing gainful employment to the local populace. However, the observation has been the irregularity of NREGA projects being provided, when compared to some other districts where projects are provided on regular basis. This makes a compulsion upon the tribal people to migrate to other cities because they depend on earning only through daily wage labour. Thus, on the migration aspect, NREGA has shown no such positive result. Concluding the results When we compare the two districts, we find differences in incomes and migration patterns. For example, villagers in Baroda district earn more incomes through secondary jobs. Though we observed NREGA’s comparatively lesser significance in contributing to the yearly income as compared to Sabarkantha, the sample of Baroda is more financially well off as can be seen from the graph below. 0 20000 40000 60000 80000 100000 120000 140000 160000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Sum of Yearly income1 (NREGA+secondary+primary) Sum of Yearly income2 (without NREGA)
  • 74. 66 From the figure given above, some rough conclusions can be pointed out:  Starting from record number 16 till record 31, that represents sample of Sabarkantha district, we observe comparatively higher yearly incomes. From a rough viewpoint, samples 1-15 of Sabarkantha earn not more than Rs. 60,000 a year whereas the samples 16-31 of Baroda district earn a staggering Rs. 1, 00,000 to Rs. 1, 20,000 a year.  The sample in Baroda district earns an average of Rs. 53, 657 a year while in Sabarkantha the sample earns an average of Rs. 38, 340 a year which is equal to 1.4 times of incomes earned in Sabarkantha.  Yearly income of Sabarkantha district is more consistent and regular with fewer disparities observed. In Baroda district, disparity in income exists with some samples families earning not more than Rs. 20,000 a year while majority earn more than Rs. 50,000 a year.  Also observed is the consistency of NREGA income earned in Sabarkantha. This is due to regular work period provided through NREGA, uniform wages and timely payment. Quite the contrary exists in Baroda where untimely payment of wages and unavailability of work is the norm. Income through NREGA is also more inconsistent than the income observed in Sabarkantha.  The most important comparison has to be between the regression results of the two districts. The two regression lines have been reproduced here for quick reference.
  • 75. 67 40000 60000 80000 100000 120000 010000200003000040000 NREGA income Yearlyincome Figure 1 Figure 2
  • 76. 68  Figure 1 corresponds to Baroda district while the latter represents Sabarkantha. It can be clearly seen the extent of NREGA’s influence in Sabarkantha. A staggering 91% of the yearly income of the sample in Sabarkantha is explained by NREGA implying the predominance of NREGA wages in this region, while only a low figure of 9% of yearly incomes is earned through NREGA in Baroda district. Though wages were higher in Baroda, the sample there preferred to work in secondary jobs for livelihood.  Tribal people in Baroda are more migratory than those in Sabarkantha, to the point that no proper regression could be established between NREGA and migration in the latter district. Though it may seem absurd to establish such a relationship between NREGA and degree of yearly migrations, it is a fact that employment generating laws do effect migration patterns of people. The sample of Sabarkantha was too satisfied with NREGA’s workings so they found no reason for migration, whereas those in Baroda claimed lack of NREGA work forcing them to still migrate to other towns.  Although savings accounts have not been considered, NREGA contributed to increased bank accounts and savings that were not observable in tribal districts prior NREGA. Data has not been produced due to topic being outside this research.  The incomes observed increased at marginal levels only i.e. the magnitude of their increase was not of the degree for the tribal people to reap durable benefits like buying new lands, assets or even small houses or electrical appliances like a second hand television or Radio. This is because the wage offered by NREGA was far too less than the wages offered by third party employers in small towns and cities. Research pointed out not
  • 77. 69 less than Rs. 400 on an average per day was the norm for secondary jobs. These were some of conclusions from our results. Though exact degree of impact can never be pinpointed, it is quite clear that NREGA has had a considerable impact on the livelihood of these people as far as basic yearly incomes & savings are concerned. As for migration, results vary as not only NREGA influences migratory patterns but also factors like local preferences, work culture of the tribe, degree of entrepreneurship as some tribes are known for doing good small businesses while some do not encourage or possess much of enterprising behaviour, individual ambitions and the like. However, for purposes of feedback to government agencies on NREGA, a more in-depth analysis needs to be done taking into account the Act’s impact on the expenditure patterns with consideration of prices of important food and durable articles, changes in education levels due to any observed increase in incomes and the like. NREGA by its very nature is for temporary purposes as one can comprehend while going through its gazetted government document. Though it offers better quality of welfare than the previous programmes there was a general consensus among the sample that still more needs to be done on NREGA and the wages it offers and also in the behaviour of the officials implementing this Act as they are directly held responsible for the quality of implementation. Perhaps by only increasing the market rate of wage through amending the Wages Act, NREGA can achieve more success at village levels. Amendments can also be made in the Act to support long term agricultural practices to make farming even more productive as that is the primary occupation of not just the tribes but for the whole Indian sub-continent. It is simple logic that though
  • 78. 70 NREGA increased incomes of the targeted people, that increase won’t last long as the projects it undertakes like digging, check dams, irrigation & road works are of temporary nature and not such that would employ people over a series of generations. That is only achieved in agriculture. Unfortunately, till now, NREGA does not have much to offer in the farming sector. Though a well planned Act, being discussed in foreign countries of its success and uniqueness, we cannot let it down like the prior programmes that were sadly withdrawn due to failures and embarrassing scandals. Whether NREGA will last long or be normally withdrawn that has been the norm in Indian political environment, only time will tell. ~~~End~~~