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Implementation of MGNREGA & its impact on Rural Madhya Pradesh.


The National Rural Employment Guarantee Act (NREGA), legislated in 2005, is considered one of the best legislations by the erstwhile Dr. Manmohan Singh-led UPA Government as it has been a bold attempt to make the development process more participative and inclusive. This legislation embodies the true spirit of the Directive Principles of State Policy enshrined in the Constitution of India by providing the right to work to the poorest sections of society in rural India. In order to boost economic growth through inclusive development policies that reduce rural unemployment and under-employment, this legislation aims at (i) providing guarantee of gainful employment within the vicinity of the rural people with a statutory minimum wage; and (ii) creation of durable assets and strengthening the resource base of the rural poor. Renamed in 2009 after the Father of the Nation, Mahatma Gandhi, this Act provides at least one hundred days of guaranteed wage paid public employment in a financial year to every household whose adult members volunteer to engage in unskilled manual labor. It is hoped that the implementation of this scheme would increase availability of employment in rural areas resulting in an increase in rural incomes and purchasing power of rural poor; ensure greater participation of women and backward communities; improve agricultural productivity; reduce distress migration from rural areas; and strengthen rural infrastructure through asset creation in villages and regenerate natural resources required to boost the local rural economy.

The first phase of the implementation of MGNREGA began in 2006 covering 200 most backward districts of India, which was later extended to all the nearly 600 districts in the country in 2008. Madhya Pradesh, being one of the backward states in India, accounted for 18 districts that were covered in the first phase of implementation. The all-India performance of MGNREGA has been impressive according to Government statistics. Since its inception over 1200 crore person days of employment has been generated and over Rs. 1,00,000 crore of wage payments were made to rural households. On an average 5 crore households were provided with employment annually since 2008. Since wage payments are made through bank/post office accounts, over 10 crore new bank/ post office accounts were opened. Rural wage rates increased enhancing rural household incomes, especially those belonging to marginalized communities such as Scheduled Castes and Scheduled Tribes. In addition, MGNREGA works resulted in the development of rural assets such as roads and irrigation canals, besides water conservation, water harvesting, flood protection, drought proofing and renovation of traditional water bodies.

Periodic independent evaluation of the implementation process of MGNREGA as well as its impact on rural India is essential for an unbiased view of an important flagship rural development program undertaken at the national level. Since Madhya Pradesh is one of the under-developed states in India, an analysis of the implementation and impact of MGNREGA in Madhya Pradesh provides many insights into the effectiveness of the implementation of government policy and programs at the grass root level.

Madhya Pradesh is geographically the second largest state situated in Central India. With a population of 7.26 crores, it is the sixth most populous state in India. A large proportion of its population consists of backward communities such as Scheduled Castes (15.6 %) and Scheduled Tribes (21.1%), according to Census 2011 the share of agricultural workers in total rural work force was 82.5 percent in 2004-05. Out of the total rural workers, farmers constitute 61.4 percent and 38.6 percent belong to agricultural laborer category. In the same survey, it was found that out of the total agricultural laborers Scheduled Tribe and Scheduled Castes constitute 35.9 percent and 28.5 percent respectively (NSSO, 2006). If we look at the data of Rural Labor Enquiry Report 1999/ 2000, Scheduled Caste male and Scheduled Caste female laborers earned Rs. 30.1 and Rs. 24.44 per person respectively and Scheduled Tribe male and Scheduled Tribe female laborers earned Rs. 29.85 and Rs. 26.05 per person respectively in Madhya Pradesh. According to the 66th Round of NSSO data, 12.3 per cent of rural households are landless while 63.2 per cent of them are small and marginal farmers. Poverty estimates 2011-12 of the Planning Commission reveal that 35.74 per cent (i.e. 190.95 lakhs) of the rural population in Madhya Pradesh are living in poverty. This is only marginally lower than the NSSO data for 2004-05, which estimated that rural poverty was 36.8 per cent in Madhya Pradesh (Table 1).

Macro-economic data indicate that the period during which MGNREGA was implemented in Madhya Pradesh did not result in a significant reduction in rural poverty as one would have expected. Earlier studies have also pointed out that there have been encouraging results in various aspects of MGNREGA such as increase in job demand and registration of workers (Ambasta et al., 2008); nevertheless they also highlighted several shortcomings in the implementation of the scheme, such as inadequate implementation apparatus and lack of administrative and technical manpower, that reduces its efficacy to become a means of inclusive development in rural India (Chhabra et. al., 2010). In addition to the evaluation reports of the Government on MGNREGA, an analysis into the implementation process and impact of MGNREGA in Madhya Pradesh is essential after seven years of its implementation in order to uncover the impediments that prevent the effectiveness of the schem.

Objectives & Methodology

In response to the need to evaluate the effectiveness of the implementation of MGNREGA during the last 5-7 years, Indian Social Institute, New Delhi, conducted a research study on the "Implementation Status and Impact of MGNREGA in Madhya Pradesh". This research project was part of a larger study of MGNREGA in six States, namely, Bihar, Odisha, Jharkhand, Chhattisgarh, Uttar Pradesh and Madhya Pradesh. The study of MGNREGA in Madhya Pradesh was conducted in collaboration with Gopal Kiran Samaj Seva Sansthan (GKSSS), the Gwalior based local project partner agency, which provided its services in data collection and other research activities from August 2012 to April 2013.

The study adopted the survey method drawing a sample of 480 households, which included 30 households randomly chosen from each of the 16 villages chosen from 8 blocks in 4 districts of Madhya Pradesh. This implies that after 4 districts were chosen from 50 districts of Madhya Pradesh, 2 blocks were chosen from each sample district. Further, two villages were chosen from each block. The main criterion for choosing districts, blocks and villages was the highest SC/ST population using data from Census of India, 2001. This criterion sought to assess the state of implementation of MGNREGA in the socially most backward districts of Madhya Pradesh. The sample districts chosen were Dhar, Sagar, Siddhi and Chhindwara. Dhar and Siddhi were among the first 200 districts chosen for implementation of NREGA from February 2, 2006.

In addition to the survey method, qualitative data was collected in the form of case studies and in-depth interviews of officials at the village, block and district levels. The primary data collection took place from August to October 2013.

The objectives of the study are as follows:

1. To investigate the level of understanding and awareness level about MGNREGA among the villagers at the district level in the state of Madhya Pradesh.

2. To review the current status of the implementation of MGNREGA in Madhya Pradesh.

3. To assess the impact of MGNREGA in the selected panchayats, particularly on rural employment opportunities, agriculture, women's empowerment and local governance in panchayati raj institutions.

Profile of Respondents

The general profile of the 480 households reveals that they were pre-dominantly male (74.6 per cent) compared to women (25.4 per cent). Since the districts with high proportion of socially backward communities were chosen in the sample, the respondents comprised Scheduled Castes (38.3 per cent), Scheduled Tribes (37.7 per cent), Other Backward Castes (16.8 per cent) and other communities (7 per cent). They pre-dominantly belonged to communities practicing Hindu religious traditions (97.9 per cent) and the remaining respondents belonged to minority communities.

The socio-economic profile of the respondents reveals a grim picture. The household income of 83 per cent of the population is less than Rs. 65.8 per day or less than the international standard of $ 1.25 dollars a day. As far as land holding is concerned, 73.1 per cent of the households are landless and another 16.5 per cent are small and marginal farmers. The educational attainment levels of the respondents are also dismal. 55.6 per cent of them are illiterate and another 29.7 percent are school dropouts. Their access to some decent housing is also poor as 86.3 per cent of them live in kutchha houses. Excluding employment generated by MGNREGA, 68.1 per cent of households are otherwise either unemployed or engaged in casual labor. Finally, the extent of poverty in the region is borne out by the finding that 71.8 per cent of the sample households were below the poverty line and had BPL cards in their possession. Therefore, it is pertinent to note that MGNREGA provides employment to the poorest sections of rural India. However, after 5-7 years of implementation of MGNREGA, the people in these backward regions of Madhya Pradesh continue to remain under impoverished conditions. This implies that a lot more initiatives and efforts need to be made to supplement MGNREGA in order to bring down poverty levels in rural India.

Awareness Levels about MGNREGA

In a demand driven employment generation scheme such as MGNREGA, the awareness among the people about the important provisions of the scheme is critical for its success. In spite of other studies indicating that there is a high level of awareness about MGNREGA, this research reveals that the awareness levels of basic provisions of the Act among rural households were not encouraging. Only 51.6 per cent of the households were aware that job card holders alone can apply for employment under MGNREGA and only 47.2 per cent of the households were aware that they were entitled to 100 days employment in a year (Table 2). Awareness of other provisions of the Act was very poor. For instance, only 5.2 per cent of the households were aware of unemployment allowance, 11.7 per cent were aware of compensation in case of injury caused by an accident at the worksite and 6.4 per cent of respondents were aware of the amount sanctioned and spent for MGNREGA works in their village.

Implementation Process

Institutional arrangements for the implementation of MGNREGA have been in place in Madhya Pradesh with panchayats being engaged in a major way. Consequently, the Department of Panchayat and Rural Development is made the nodal agency overseeing its implementation. It is responsible for preparing annual plans, ensuring that the state receives its share for the implementation of MGNREGA and ensuring smooth flow of funds to the districts. There is also the Madhya Pradesh State Employment Guarantee Council that periodically reviews, supervises and monitors the implementation of MGNREGA. It also publicizes it in the widest possible manner and advises the State Government on all matters concerning its implementation. At the district level, the District Program Coordinator consolidates plan proposals of Panchayats and prepares a Labor budget for sanction by the District Panchayat. The Coordinator also coordinates the activities of Program Officers, reviews, monitors and supervises MGNREGA works and redress grievances, if any. At the block level, the Janpad-level Program Officer matches demand for work with employment opportunities, prepares block plans, ensures prompt and fair payment of wages as well as allowances and ensures regular social audit, in addition to the normal function of monitoring the projects and addressing complaints. Finally, at the village level, the Gram Panchayat registers households, issues job cards, registers demand for work and allots employment opportunities within 15 days.

With 99.6 per cent of the sample households having job cards and 92.5 per cent of households getting employment under the scheme, our primary data shows that the coverage of MGNREGA in rural areas has been impressive. However, the implementation of MGNREGA has been very inefficient. In fact, several irregularities have been noticed in the process of implementation.

Earlier studies had already highlighted the structural challenges to the implementation apparatus of MGNREGA, which was found to be inadequate and ill-capacitated. Firstly, several Program Officers of MGNREGA were found to be government officials, who have been overburdened with this responsibility as an additional charge. Besides, there has been a shortage of administrative and technical personnel for MGNREGA works at the Block and Gram Panchayat levels, especially Program Officers, Technical Assistants, and Employment Guarantee Assistants. In some places there was the absence of annual plans, while in others the annual working plans were inadequate, delayed or not ratified by the gram sabhas. Similarly, some gram sabhas were not actively involved in the process of planning and panchayats were forced to implement action plans made by the district. Besides, systems for financial management and tracking were deficient, with numerous instances of diversion or misutilization, and delay in transfer of state share. Further, maintenance of records at the block and GP levels was extremely poor, and the status of monitoring, evaluation and social audit was also not up to the mark (Chhabra et. al., 2010). In some districts there was neither social audit nor village level vigilance committees (Ambasta et al., 2008).

Job Cards

One of the formalities which are essential for getting employment under MGNREGA is the making of a job card. Each family has one job card with details of the family and bank account. Earlier studies had indicated that there has been an increase in registration of workers as well as job demand. However, our findings reveal that there have been some constraints. Job cards are supposed to be issued by the Gram Panchayat to the applicants free of cost within a month after application is made, but our primary data reveals that job cards were not issued free of cost to 37.8 per cent of households and only 14.7 per cent got their job cards within a month. Besides, 16.4 per cent of them had to pay a bribe to get a job card. In Datlawadi village of Junnardeo Block of Chhindwara district, due to the political machinations of the dominant castes in the village, in spite of having a Sarpanch from ST community, 150 SC/ST families have not got job cards even after completing all formalities for the purpose.

Facilities at Work Site

MGNREGA makes it mandatory for local panchayats to provide at work sites facilities, such as drinking water, first aid kit, creche and shade for workers to rest. However, primary data from Madhya Pradesh reveals that the facilities at the work site have also not been satisfactory. Primary data from the four districts of Madhya Pradesh reveals that 65.6 per cent of respondents admitted that they had been provided with safe drinking water, 22.5 per cent of respondents acknowledged the presence of a First Aid Box and only 8.3 per cent said that there was a creche at the work site.

100 Days Employment

As far as the 100 days of guaranteed employment under MGNREGA is concerned, primary data reveals that during the year 2011-12, 64.9 percent of the respondents got work for not more than 50 days and only 6.9 per cent of the households got 100 days of work during the last year. Consequently, in addition to 13.1 per cent of the respondents who got no income from MGNREGA works for various reasons such as not having job cards or not demanding work, 64.2 per cent of the respondents received not more than Rs. 5000 as income from MGNREGA works during the year 2011-2012.

Payment of Wages

Accountability and transparency in the payment of wages for MGNREGA works is crucial for the credibility of this guaranteed employment scheme. In this regard, all payments must be entered in the muster roll, which is displayed and read at the time of payment. Primary data from the four districts of Madhya Pradesh reveals that the stipulated guidelines for payment of wages have been followed for only 47.9 per cent of the respondents. Further, only 56 per cent of the respondents received the payment regularly within a month after the work is done. This indicates that payment of wages for nearly half of the workers has been either delayed or irregular. Our findings corroborate with earlier studies that showed instances where less wages have been paid. In Datlawadi village of Junnardeo Block of Chhindwara District, the Sarpanch is taking advantage of the lack of awareness among SC/ST communities by paying them Rs. 50 as daily wage for MGNREGA related works in spite of the actual wage rate being Rs. 132. They are neither given job cards or pass books, but they are made to put their signatures or thumb impressions on slips of paper called 'nikasiwaliparchi' or withdrawal forms. Only 16.6 per cent of the respondents claimed that the details of the payment were made available to them in advance. In Upani village in Siddhi Block and District, a man belonging to Harijan community worked with his sons for 15-35 days on each of the three MGNREGA projects. The amount each of them was to receive was Rs. 3,500, but after 7 months they have received only Rs. 2,200. In spite of the provision for compensation for accidents at MGNREGA work sites, our study could not find any person who received accident compensation. In Rawanwada village of Block Parasia in Chhindwara District, a young widow aged 35 and a mother of three small children was injured while digging at a MGNREGA site. However, she did not receive any medical treatment or compensation in spite of forwarding an application for the same. Since her job card is with the Panchayat Secretary, she is helpless and remains at his mercy. On a positive note, 2.1 per cent of the respondents received "unemployment allowance". This finding confirms earlier studies which indicate that there is hardly anyone who gets unemployment allowance and only a few workers are able to get it after a long struggle (Siddhartha, 2008). Interestingly, in Umreth village of Parasiya Block of Chhindwara District, a 12 year old boy received unemployment allowance of Rs. 100 for 13 days. Another encouraging development is that 8.1 per cent of respondents were provided extra wages for travelling to the worksite which was away from their residence.

Execution of Works

Government of Madhya Pradesh has initiated twelve individual and community assets building schemes under MGNREGA. They are: KapilDhara irrigation structures (dug well, check dam, farm pond on private land), NandanPhalodyan (horticulture on private land), BhumiShilp (farm bunding on private land), Shail Pam (soil conservation and plantation in degraded hills), Vanya (plantation in community waste land), Resham (sericulture in community as well as private land), NirmalNeer (well and tank construction for community drinking water), NirmalVatika (construction of leaching pit and fruit tree plantation), Meenakhi (pisciculture), Sahasradhara (micro irrigation structure with canals), Srunkhalabadh JalSanrachana (construction of series of stop dams in rivers) and NahronkaRakhRakhav (construction and repair of irrigation canals) (Dalapati, 2010). However, the entire process of decision-making and execution of the works is an important aspect of MGNREGA. In the beginning, it is important to note that the success of any government initiated program depends on the participation of the local population. Primary data in the four sample districts of Madhya Pradesh reveals that only 16.8 per cent of respondents felt that they were part of the decision making process for the selection of projects by the Gram Sabha. Further, only 37.5 per cent of the respondents claimed that there were project meetings held before MGNREGA works, though not very regularly. Interestingly, the Gram Sabha was the source of information on MGNREGA works available and allotted for 47.7 per cent of respondents and therefore, a majority of respondents got to know about it through friends, relatives, neighbors, and other acquaintances. According to our primary data, only 15.2 per cent of respondents were aware of a Gram Rozgar Sevak appointed to supervise and measure the work done under MGNREGA. It is also pertinent to note that 18.3 per cent of the households revealed that contractors carry out MGNREGA works. Further, 44.5% of the households were unhappy about the discrimination in work allotment and in their perception, there was caste or gender discrimination at the worksite. In addition, 32.9 per cent of households claimed that there was corruption in the implementation process of MGNREGA. Due to high levels of inefficiency in the processes of implementation, the impact of MGNREGA on the rural masses has been marginal.

Monitoring of Works

Monitoring and evaluation is an important aspect of any project work and therefore MGNREGA stipulates that there be a monitoring committee set up that presents its report regularly to the Gram Sabha. According to our primary data, only 15 per cent of the households were aware of a monitoring committee set up for MGNREGA works in their village. Besides, only 7.2 per cent of the respondents were aware of the committee presenting its report to the Gram Sabha. In addition, only 19.3 per cent of the households claimed that there was indeed regular scrutiny of MGNREGA records.

Impact on Household Income

The main feature of MGNREGA is that it provides guaranteed wage employment for 100 days, thus enhancing household income. In our study in four districts of Madhya Pradesh, as many as 77.3 per cent of the households have got up to Rs. 5,000 as wages from MGNREGA works and 75.5 per cent of the households claimed that they have benefitted economically from MGNREGA as it has not only increased household income but it has also given them an assured source of income. One of the secondary effects of MGNREGA is that since the wage for MGNREGA was fixed at Rs. 100 per day and above, it led to a sharp increase in rural wage rates for casual labor for men and women and this in turn has also led to an increase in household incomes. Increase in household incomes has the capacity to improve human capital in rural areas. Primary data from our study reveals that 19.5 per cent of households attributed the improvement of the educational status of their children to the introduction of MGNREGA. There have also been some secondary negative effects of MGNREGA such as the perception of 50.6% of the households that higher income on account of MGNREGA has led to increased liquor consumption and social evils associated with it.

Impact on Employment

One of the main objectives of MGNREGA has been to generate employment opportunities in rural areas in order to reduce rural unemployment and under-employment. In spite of the inefficiencies in the implementation of MGNREGA, to a large extent the rural population has benefitted in terms of employment. For 89.2 per cent of the households in the four districts of Madhya Pradesh at least one member of the household got employment during the year 2011-12. Due to MGNREGA, 25 per cent of the households have stopped migrating to other places in search of work. MGNREGA was found to be popular among people living in rural areas of Madhya Pradesh for three main reasons: (1) It provided for employment during lean season; (2) It provided for easy availability of employment within their own gram panchayat; and (3) It provided for employment for women with wage equal to men.

Impact on Agriculture

A lot of emphasis of MGNREGA has been on water and soil conservation, building check dams, wells and other assets in order to improve the productivity of agriculture especially of small and marginal farmers in rural areas. Primary data from the four districts of Madhya Pradesh reveals that agricultural output of 31.6 per cent of households improved. The collateral negative effects of MGNREGA include the perception of 14.5 per cent of households that there is insufficient labor for agricultural activity due to MGNREGA works.

Impact on Women

The encouragement for the participation of women in MGNREGA works has created some impact in the gender relations in rural areas. Some studies found instances of turning away women workers, but in this study 83.5 per cent of the households have acknowledged that there has been a lot of emphasis given to the participation of women in works related to MGNREGA. This finding confirms earlier studies that in some panchayats, women are among the most vocal members of the vigilance committees and gram sabhas (Khera, 2008; Khera & Nayak, 2009). The availability of employment for women under MGNREGA and the equal wages for men and women has also led to the perception among 80.4 per cent of households that women make a significant contribution to household income, which has led to the improvement of livelihoods of rural households. In a country where the gender disparity is very high, primary data indicates that there is a strong perception that MGNREGA improved the status of women in 62.5 per cent of households as they are contributing to augment household livelihood. However, only 35.2 per cent of the households were willing to concede that the introduction of MGNREGA has led to the improvement in the social status of women at the village level.

Impact on PRIs

MGNREGA has galvanized the local governance structures to function in a way that benefits local communities in rural areas. Primary data reveal that only 28.5 per cent of the households have acknowledged the important role played by the Panchayati Raj Institutions at all the levels. Dasai village of Sardarpur Block in Dhar District has been a good example of the effective functioning of PRIs in the implementation of MGNREGA. The MGNREGA wage rate of Rs. 132 was displayed in Panchayat Bhawan as well as other government sites. A detailed chart of every scheme is proactively displayed in the Panchayat Office. All those engaged in MGNREGA works in the village got their wages on time. However, the Sarpanch, who belonged to Scheduled Tribe community, was unhappy with the procedures of approval of project proposals and the lack of funds needed to provide 100 days of work to all job card holders. Data reveal that there is a lot of scope for improvement in the functioning of PRIs so that the implementation process of MGNREGA and other government initiatives can reach the targeted beneficiaries.


The findings of this study on the awareness levels of the rural population on MGNREGA, the processes of implementation of the scheme and the impact it has made on the lives of the rural communities has shown some encouraging signs of making development processes more participative and inclusive of all communities but at the same time it also has its shortcomings. Primarily, this research highlights the need for greater awareness of the processes of MGNREGA among all sections of rural population. Besides, a great deal of efforts needs to be made for improving the transparency, accountability and monitoring mechanisms for more effective implementation of MGNREGA so that it is able to translate into livelihood security for millions of households in rural areas. Finally, its impact must be monitored effectively so that best practices could be replicated and the shortcomings corrected in time so that the poorest among the rural communities may benefit from MGNREGA.

Denzil Fernandes is Editor of Hashiye Ki Awaz and HoD, Department of Dalit Studies, Indian Social Institute, New Delhi. E-mail:


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Table 1 Number (Lakh) and Percentage of Rural Persons Below
Poverty: 1983,1993-94 and 2004-05

                       1983                1993-94

State       No. of      % of    State's    No. of      % of
            Persons   Persons   share in   Persons   Persons
                                the Poor

Madhya       215.5      48.9        8.6     216.2      40.6
INDIA       2519.6      45.7         --    2440.3      37.3

            1993-94              2004-05

State       State's    No. of      % of    State's
            share in   Persons   Persons   share in
            the Poor                       the Poor

Madhya          8.9       251      36.8       10.8
INDIA            --    2321.6      28.3         --

Source: 1. For 1983 and 1993 94, Govt. of India, National
Human Development Report, 2001, Planning Commission, March

2. For 2004-05, Mahendra Dev and C. Ravi, "Poverty and
Inequality: All-India and States 1983-2005", Economic and
Political Weekly, Vol. XLII, No.6, January 10-16, 2007.
Table compiled by G.K. Chadha for ILO Asia-Pacific Working
Paper Series, "Employment and Poverty in Rural India: Which
way to Go Now", October 2008.

Table 2 Awareness of MGNREGA

Sr. No.   Awareness                              Respondents

1.        Only job card holder can apply for           51.6
2.        MGNREGA guarantees 100 days of               47.2
3.        Provision of unemployment allowance           5.2
4.        Compensation for injury due to               11.7
            accident at worksite
5.        Amount sanctioned and spent for               6.4
            MGNREGA works

Source: Primary data from Field Survey
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Title Annotation:Mahatma Gandhi National Rural Employment Gurantee Act
Author:Fernandes, Denzil
Publication:Indian Journal of Industrial Relations
Date:Jan 1, 2015
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