Inclusive Development Through Guaranteed Employment

The MGNREGA is a signpost of India’s experiment in promoting inclusive growth and development through guaranteed employment. It aims at promoting livelihood security of the rural households by providing 100 days of secured wage employment in every financial year through federally funded public works programmes. Its rights-based framework, community-centric approach and participatory planning empowers local population. Though India has a rich tradition of providing employment-based relief to the poor people, the MGNREGA draws on the vast experiences of the past and improves upon further in terms of objectives, design and implementation processes. While explaining salient features of the MGNREGA, this chapter also describes evolution of the workfare programme in India.

Consensus eludes as to what constitutes a single explanation of inclusive growth and development. Is it development of all through equal share in growth and distribution? Is it inclusion of excluded in the growth process? Is it growth and development with equity, in other words, growth with justice? In the vast literature on development, inclusive growth is generally spelt out in economic terms, and explained as “pro-poor growth”, “growth with distribution”, “equal growth” and so on. In contrast, growth with justice is a comprehensive approach that emphasizes creating enabling conditions for participation of excluded and addresses the problem of structural inequality. It also aims at removing barrier to equal participation. This chapter explains Employment Guarantee Scheme (EGS) as a component of a strategy of promoting employment-centric inclusive growth and development in the context of a labour abundant economy in which wage labour is the principal source of livelihoods to a large section of the population, and yet, lack of productive employment is a major deficit. It treats EGS as a labour market intervention and identifies labour market as a major site of exclusion.

Design salience means key provisions and features of the workfare programme, which are critical to realizing the objectives of the EGS. For example, as a social security measure, an EGS is designed differently than as an anti-poverty measure. As an infrastructure building public works programme, it carries slightly different provisions and features, than if it aims at providing supplementary employment. However, these features are not watertight, as there are multiple objectives of an EGS. They are sometimes divided into primary and secondary objectives. This chapter, first, explains some key design features of an EGS that are critical to realizing inclusive growth and development objectives. Important provisions pertain to: (a) coverage of population; (b) entitlement of employment days; (c) fixation of wage rate; (d) seasonality of employment generation; (e) types of work undertaken/nature of assets created; and (f) method of financing. It, then, examines if these provisions have the potentialities to promote inclusive growth and development. After examining the features, pertinent to promoting inclusive growth and development, it analyses as to what extent these features are part of India’s MGNREGA.

Seamless reach of a programme to the target beneficiaries is a litmus test of its success. It is, however, an arduous challenge of programme designing and their effective implementation. Inclusive participation of the most deprived rural population is a litmus test of inclusive character of the MGNREGA. There is not only a high participation of SCs, STs and women workers, but there is a positive correlation between poor socio-economic conditions of the population and their high participation. It has been achieved through universal approach with self-selection process, carefully crafted design and meticulously worked out provisions, added by entitlement and empowerment approach, community-centric participation, and robust mechanism of transparency and accountability.

The MGNREGA has promoted inclusive growth and development by generating additional employment in the economy and by transferring cash income to the rural poor. It has created a massive number of productive assets that have promoted livelihoods in the local area. It has strengthened rural and agrarian infrastructure and triggered multiplier and acceleration effects in the economy. Much of the benefits of the MGNREGA, be it additional income generation, poverty reduction, check on distress migration and reduction in consumption-led indebtedness, has concentrated in the most marginalised rural population, viz. SCs, STs and women, and landless casual labour. Though the benefits of community assets are skewed in favour of assets-owners, yet the rural poor have also gained by the overall increase in economic activities in the local area.

Assets creation is incidental to the objective of employment generation, yet considering their complementarities in promoting livelihood security, the Act makes a fine balance between the twin goals of employment and assets creation. MGNREGA assets have filled critical infrastructural gaps in rural areas. It has promoted agriculture and allied activities and improved livelihood conditions of the agriculture-dependent rural population. Works pertaining to water conservation and harvesting, promotion of irrigation, including renovation of traditional water bodies, have proved hugely beneficial to Indian agriculture. Land development and irrigation works have created triple impacts on agriculture that is crop acreage increase, greater yield per acre/hectare and crop diversification. Livestock, fishery and horticulture-related assets have promoted income level of beneficiary households. A large number of small and marginal farmers, who constitute more than 80% of India’s farmers, have benefitted by the provision of land and irrigation on their farm land. Some of them have supplemented their increasingly decreasing farm income through MGNREGA wage work. The rural poor have gained by the regeneration of natural resources like land, water and forest, as they draw water, fodder and fuel from the common resources, which were depleting, and have been recharged because of the MGNREGA assets. Individual assets have created transformational impacts in some cases, but no less substantive otherwise also. It has provided opportunities to enhance their income levels, escape poverty and catapult them from the status of wage employment to self-employment.

The statement of the objects of the MGNREGA explains the goal of empowering rural poor through entitlement-based employment. Working of the Act demonstrates visible and invisible, subtle and substantive social empowerment effects, which have been explained as enhanced social security, liberating effects of lean season employment, loosening hinges of monopsonic rural labour market, workers-favourable impacts on labour market, reduction in borrowing and distress migration, political capacity building of the poor, women’s empowerment.

The MGNREGA is a mixed bag of achievements and failures, characterized further by huge potentialities and abysmal gap in implementation that simultaneously gives rise to hope and despair. Universal approach in tandem with the self-selection process has ensured seamless reach of the programme to the marginalized rural poor; the rights-based framework hosted through community-centric implementation process has asserted moral rights of the citizens. Its community-centric implementation process has invigorated decentralized democratic development process that has also facilitated political capacity building at the grassroots level. On the flipside, persistence of distress demand for wage employment in about five crore of rural households creates a sense despair as how long the rural poor would need MGNREGA to walk free from the crutches of the state-sponsored EGS. At the same time, the vast majority of them could not get 100 days of their entitled employment that discounts the working of the full potentialities, and in a way, explains the reason for persistence of distress demand for wage employment. Strengthening institutional capacity of local-self-government, a long overdue, is of utmost importance for realizing the twin objectives of employment and assets creation. There is a political challenge as well. There have been persistent attack that might become aggressive with passing of each year. There is an emerging sense of fatigue with the MGNREGA.

India achieved impressively high growth rate in GDP in the Eighth, Ninth and Tenth Five Year Plans that were, however, socially exclusionary (Government of India, 2007). It was obtained mainly from tertiary and secondary sectors. It increased income inequality, and widened rural-urban divide and regional disparities. The Eleventh Plan had envisaged MGNREGA as an important programme for promoting employment-centric inclusive growth and development in India. More than one and a half decades of its working have amply demonstrated its utility in promoting inclusive growth and development that can be further enhanced by carrying out some specific suggestions spelt out in this chapter.