National Rural Employment Guarantee Act (NREGA), now renamed as Mahatma Gandhi REGA, is a unique enactment made in 2005 that recognises and gives legal sanction to ‘right to work’ for the first time, though with certain restrictions. The limitations are: this entitlement is limited to rural areas, unskilled manual work and for a maximum of 100 days to a household in a financial year.
The primary purpose of NREGA as stated in the Act is to provide for the enhancement of livelihood security of rural households, by guaranteeing 100 days of work. This opportunity is not just limited to the poor, but to any household in the village whose members are willing to do unskilled manual work. The key feature of this provision is its self-selection criteria/assumption that whoever is willing and in need, will only/mostly seek employment. The procedure is that each willing household has to apply and get a job card. After that, whenever any member of the household enrolled in the job card needs work they have to submit a work application to the respective village functionary in advance of 15 days and they will be paid wages within a maximum time limit of 14 days after the date on which such work was done. It is important to understand that NREGA does not provide an upfront poverty alleviation programme, but an entitlement that can provide a limited and supplementary wage income (on demand) to save from starvation. This is well captured in a wall writing seen in several villages in Jharkhand, ‘jab se aya narega, ab na koi bhook se marega’ (After the introduction of NREGA, no one will die of starvation).
However, it has a potential to trigger income enhancement and asset (livelihood) building, as one of the important objectives of the scheme is the creation of durable assets and strengthening the livelihood resource base of the rural poor. This process when realised can help the poor to get out of poverty situation. Let us first understand the possible ways of contribution of NREGS to income enhancement and asset building of the poor and its actual realisation in practice.
Through additional work days and wages: The direct contribution to the income enhancement of a household is through number of additional days of work generated in a year under NREGA. The maximum potential a household in general can avail through this scheme is around Rs. 10,000 a year by working 100 days.
The national average for the last three years is between 40-50 days per household. i.e. the average additional wages earned by the households in a year works out to around rupees 4000-5000 (@ Rs. 80/day) which now is enhanced to Rs. 100/day at the national level and varies across the states. The participation of households having job cards in the programme is around four crores this year at all India level, which is less than 50% of the total job card holding households as well as almost half of the newly estimated number of households below poverty line by the expert group on poverty constituted by the Planning Commission. As per this group’s (headed by Mr. Suresh Tendulkar) report, out of 78 crores of rural population of 2004-05, 41% are poor. i.e. if around 4.5 is taken as average family size, around seven crore households will be below poverty line. Even in the four crore households accessed, there is no clear estimate on whether all of them are poor as any household can access the programme.
As the reach as well as securing of entitlement is less than 50% for the poor, it puts question on the contribution of NREGS to poverty alleviation.
Through enhanced bargaining power: Though the entitlement is limited for 100 days in a year, this assurance of work provides the households a sense of security and enhances their bargaining power in the labour market, though they may not use or access all of 100 days in a year. This bargaining power is further enhanced by the provision of minimum and equal wages to both men and women as per the work done. In majority of the cases the wages stipulated in NREGS (say x) are more than the regular wages in agriculture or other works (say y). Therefore the participation in NREGS provided the workers additional wage income (x-y), even if they have foregone as many days of employment in other works to participate in NREGS. If they use both the opportunities, they get total income of x+y, in which x is the specific additional income. With the assurance and higher wages in EGS, the workers in most places were able to bargain for increase in wages (say y1) in other works as well. This factor was more beneficial to women members as their regular wages were very low compared to NREGS as well as of male members. This is one aspect that explains the wider participation of women in NREGS.
Now, regarding the actual realisation of this potential, it can be estimated from the field experiences that around rupees 2000-4000 additional income in a year is being realised by a household from the regular work with the increase in wage rates. However, the net income may not increase for all the households, as in many cases people have reduced their number of days of participation in the regular wage work and as seen above many poor households are not able to access NREGS because of several hurdles.
Through creation of durable assets and strengthening the livelihood resource base:
The third important aspect of NREGS is the creation of community assets and development of lands of the poor, particularly of SC and STs (Scheduled Castes and Scheduled Tribes). With this investment there is scope for bringing more land into cultivation as well as increasing the productivity of the land already under cultivation. Through this, households can not only get additional income directly but are also saved from the burden of mobilising investment by themselves for land development at a higher interest rate.
There are several instances where through NREGS and additional income from it, fallow lands of the poor are brought into cultivation, households acquiring small ruminants/livestock, repaying debts etc., on one hand and on the other, an increase in expenditure on health, education, food and other consumables, which are part of composite index evolved by Tendulkar Committee for estimation of poverty.

Key constraints observed in the scheme are:
¬ Work provision is not demand based but as per the convenience of the programme implementation machinery
¬ Work is not being provided continuously for two weeks
¬ There is a huge gap period between one work and another leaving the workers uncertain
¬ Wage payments are being delayed for more than a week and even up to 1-2 months
¬ Work is not being provided timely, citing reasons like delay in issue of job cards, opening of bank accounts of workers, planning process, lack of funds and implementation machinery, etc.
Thus, NREGS fails to meet its core objective which is making work available to the poor at any time of their need and in turn overcoming starvation and distress. As a result, most of them still migrate from their villages in search of work and survival as they cannot wait for months to get work and weeks for payment. So NREGS for them becomes an unviable option. This partly explains the low level of participation of the poor and less number of average days generated.

If the basic survival of a household is assured and he has some surplus, it can stand delays in opening of works and wage payments and that household can and is able to benefit maximum from NREGS. This capacity to withstand comes from significant number of assured wage days and income from agriculture and other activities within the village, some extent of cultivable land which gives a few months of food security, higher work participation in the household etc., which many poor, particularly in rain fed regions don’t have. This is clearly evident from the experience in the villages of Peddakothepally mandal in Mahabubnagar district of Andhra Pradesh and in other places in general.
This brings to the question of what needs to be done. Working on making the implementation systems more responsive (through public pressure and continuous engagement) and building capacities of the programme functionaries may address the regular pitfalls and delays providing work and making payments. More than that provision of work should be demand based and simultaneously an enabling environment is to be created for the poor to demand work. This will only come from the understanding that NREGS should be implemented not as a poverty alleviation programme but as a distress reducing/avoiding programme for the needy.
Wherever significant progress has been achieved, gradual shifts can be made towards specific poverty alleviation efforts. Those can be, increasing the bar beyond 100 days, increasing the scope from just unskilled manual work to skilled work, providing adequate training for skill upgradation, diversifying the works profile etc., Rather than converting NREGS into poverty alleviation programme it might be fruitful to design and implement other poverty alleviation programmes in such a way, so as to build on the livelihood security achieved through NREGS.

Note: The observations, experiences and analysis presented in this article are based on the experience of engagement with the Act/Scheme at various levels for the last four years in general and specifically in Andhra Pradesh.

The writer is based in Hyderabad working with Bhoomikendram - WASSAN on issues of land and labour rights along with several people’s orgnisations in A.P.

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