ISSN (Online) - 2349-8846
-A A +A

India’s National Employment Undertaking

An Appraisal

Ashok Pankaj ( is with the Council for Social Development, New Delhi.

MGNREGA: Employment, Wages and Migration in Rural India by Pramod Kumar and Dipanwita Chakraborty, Oxon and New York: Routledge, 2016; pp xxi + 274, ₹ 895.

MGNREGA: Employment, Wages and Migration in Rural India is a massive work of impact assessment of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) that shuns opinionated positions on the merits and demerits of the programme. It makes a systematic assessment of the impact of the programme on employment, wages, migration and the local economy, based on a primary survey conducted in 16 major states selected from various regions of the country. Although the book does not throw an entirely new light on the subject, its analysis of the socio-economic backgrounds of households seeking employment, impact on rural wages, migration and village economy, reassert—with the help of a large set of data—the findings of other studies.

Right to Work

The book begins with a prelude that gives an overview of MGNREGS’s predecessor employment generation programmes in India. Since the inclusion of garibi hatao in electoral–political discourse in the early 1970s, a number of rural employment generation and asset-creation programmes have been launched. Chapter 1 provides a synoptic view of the features and performances of these programmes.

The distinctness of MGNREGS in providing rights-based wage employment to rural households, through one of the largest public works programmes in the world, has drawn the unprecedented attention of academics, journalists, policymakers, development experts and practitioners alike. While the distinct characteristics of the scheme—right to work as a legal guarantee, demand-based employment at the local level, entitlement of minimum wages, worksite facilities and unemployment allowance, community-centric and community-driven approach, social monitoring, as well as decentralised and participatory planning—distinguish it from the plethora of erstwhile rural employment schemes available, it is the sheer size of the programme and the scale of its implementation that is most impressive.

Ever since the extension of the MGNREGS to all the rural districts of the country in 2008, about five crore households have been provided employment every year through millions of works across more than six lakh villages of India. The number of people provided employment in any of the years since 2008 exceeds the number provided under any previous employment generation programme. Active male and female workers seeking employment under the MGNREGS total 11.14 crore, a figure which exceeds the total workforce of any of the European, African, Arab, East Asian or Latin American countries. The members of 2,62,704 gram panchayats participate in the planning, implementation and monitoring of the programme, making it one of the world’s largest exercises in participatory democracy.

Manifold Achievements

The programme has many other achievements. First, even though it does not favour any job applicants, Scheduled Castes, Scheduled Tribes, landless and nearly-landless households, along with those employed in casual labour in agriculture, constitute a majority of the beneficiaries across states. It has also provided employment to a large number of physically challenged, old, and women workers who are otherwise discriminated against in the labour market. Rural women, with limited opportunities for paid employment elsewhere, have earned about 50% of the total person days generated under the programme.

Second, various estimates show that the wage earning from the programme has contributed between 10% and 30% of the total annual income of a beneficiary household. The contribution of MGNREGS to the total income of a household varies, depending on the number of employment days earned, and the other sources of income of the household. With the assured and enhanced income, these households have not only been able to fulfil their essential needs like food, clothing, etc, but have also invested in education, health, and other productive assets.

Third, employment generation during the lean season has protected a large number of poor rural households from distress consumption loans and distress migration. Fourth, for the first time since independence, minimum wages have acquired some kind of sanctity. It has entered into the vocabulary of labour markets and has also worked as a benchmark in some cases. In many places, rural labourers have used it as a reference wage rate to negotiate with their employers. Fifth, the creation of a huge number of community and individual assets has enhanced the productive activities in villages and local economies. Sixth, it has invigorated decentralised and participatory planning across more than six lakh villages. Seventh, there are discernible individual and community-level empowerment effects of the programme. The opportunity to earn independently and participate in community affairs has resulted in household and community-level empowerment of rural women.

The availability of alternative employment in a local area has increased the bargaining position of the agricultural labourers in otherwise largely monopsonic rural labour markets. These remarkable feats have been achieved with the allocation of less than 1% of the gross domestic product (GDP) in any of the years of implementation.

Implementation Shortfalls

There are drawbacks to the programme as well. Most of these pertain to shortfalls in implementation and related bottlenecks. Some of them may appear reiterative, but they are worth mentioning. First, as against the minimum guarantee of 100 days of employment—and the high intensity of demand for the same by most of the households seeking employment under the programme—the average number of employment days provided per household has been less than 50, except in 2009–10 when it reached 54. There are, of course, states like Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu, Madhya Pradesh, Chhattisgarh, Tripura, Himachal Pradesh, etc, which have provided employment higher than the national average in various years. Tripura performed exceptionally well by reaching the pinnacle of 95 days per household in 2016–17.

Second, the number of households that have completed 100 days of employment has never exceeded one-tenth of the total households who have been provided employment in any of the years, although there has been a demand for 100 days by these households, and in some cases even more than that. Third, job creation has largely remained supply-based, which, in essence, robs the programme of its rights-based approach. Fourth, the enforcement of workers’ entitlements like timely payment of minimum wages, worksite’s facilities and unemployment allowances in case of inability of the implementing agency to provide employment on demand has been lacklustre. Fifth, despite gram sabhas becoming more active and the increased people’s participation in selection of MGNREGS works as well as other aspects of development, decentralised participatory planning has remained enfeebled. An inherent conflict between the programme’s centralisation-oriented design and decentralisation-oriented implementation, has restricted the process of decentralised participatory planning—one of the objectives of MGNREGS—from taking off. Sixth, in many cases, the community assets that have been created fall short in terms of durability, quality and utility. A glaring example of this is the fact that a huge number of works undertaken under this programme since its inception, still remain incomplete (Pankaj 2017).

MGNREGS has received both wide applause and loud criticism simultaneously. A surfeit of literature highlights its contribution to the promotion of livelihoods of rural poor people. The huge number of community assets created—in relation to water conservation, irrigation and connectivity—have boosted local agricultural economy. The neo-liberal critics of the programme consider the whole exercise an unnecessary expansion of the role of the state. They are critical of resource allocation under the programme as wasteful and a distortion of allocation and, hence, a bane to the growth process. Less benevolent critics of the programme have declared MGNREGS jobs as “bogus.”

Comprehensive Account

Chapter 2 in the book under review summarises the main features of implementation of the programme. It also analyses some of the qualitative aspects of implementation based on management information system (MIS) data, an approach that may not be quite accurate. The MIS data is not helpful in understanding the process and outcome of the social audit and the nature of participation of the people in the gram sabha meetings, including the dynamics of decision-making within the gram sabha. The coverage of social audit and the frequency of gram sabha meetings have been pushed by the administration and have, of course, acquired some vibrancy over a period of time. A participatory appraisal of the social audit process and gram sabha meetings would have provided a better understanding of the qualitative aspects of the programme’s implementation.

The authors make an apparent mistake in presenting the cumulative figures of the number of households that have been provided employment, and households that have completed 100 days of employment. They have summed up the figures of each year to arrive at a cumulative number that gives a misleading picture (pp xvi; 28–29; 57). For example, Table 2.2 shows that 81.15 crore of households have been issued job cards; 34.09 crore households have been provided employment; and 2.86 crore households have completed 100 days of employment between 2006–07 and 2013–14. It is to be noted that there are only about five crore households who have been seeking employment under the programme year after year, and only about one-tenth of them complete 100 days of employment.

Chapter 3, which deals with the impact of MGNREGS on rural wages and employment, is a valuable contribution of this book. It has been argued in some corners that the high inflation rate of food items, especially vegetables, fruits, milk, and meat in the period between 2005–06 and 2011–12, was pushed by an increase in the demand for these items, a result of additional income generated through MGNREGS in rural areas. It has also been argued that there has been a shortage of labourers in industrial and urban sector due to the absorption of labourers in the MGNREGS. It further argues that there has been an increase in rural wagesdue to tightening of the labour market post MGNREGS. Against the above, this book shows that the post-MGNREGS increase in rural wages of both skilled and unskilled workers in real terms, has been driven largely by an increase in non-farm sector employment, mainly in the construction and service sectors. This has also contributed towards inflationary impacts on wages. At the same time, it argues that a positive correlation exists between growth rate in agricultural GDP and agricultural wage rates, while demonstrating that the increase in wages of unskilled casual labour in agriculture has been driven by higher growth rate in agricultural GDP between 2005–06 and 2011–12.

Indispensable Intervention

Chapter 4 explains the characteristics of MGNREGS wage employment seeker households, and asserts that the likelihood of a household with alternative sources of high value employment joining MGNREGS is less, and of those households with the lack of the same is high. This indicates the indispensability of the programme for unskilled casual labourers with limited income and employment opportunities, until enough high paid employment has been generated for such workers in the economy. This contests the argument that there is a substitution effect of MGNREGS on employment, and questions the proposition of tightening of the labour market (which this book also seems to suggest). Chapter 5 gives details regarding the average number of persons per household working under the MGNREGS, households which have completed 100 days, types of assets created, quality of assets, impact on migration, etc, in the 16 selected states. However, this chapter lacks coherence, as it deals with unrelated issues.

Chapter 6 again uses survey data to analyse some qualitative aspects of implementation. Chapter 7 examines the impact of MGNREGS on the village economy, and gives an account of the post-MGNREGS changes, which are related to increase in the cost of production, shortage of labour during MGNREGS work period, some impact on migration, and increase in living standard of the people. In this regard, Hirway, Saluja and Yadav (2010) have used a Social Accounting Matrix (SAM) to demonstrate the impacts of MGNREGS on the village economy, which is more systematic than the attempt made by the authors of the book under review.

Useful Analysis

The merit of this book lies in its reassertion and corroboration of various impacts of the MGNREGS through use of massive primary and secondary data at all-India level. Its systematic analysis of changes in rural wages—both of skilled and unskilled, as well as male and female workers—during the pre- and post-MGNREGS periods, is useful in understanding the processes of increase in rural wages and the contribution of the MGNREGS.

Considering that the MGNREGS was implemented in three phases, a glaring omission of literature on MGNREGS is an analysis of its impacts in the districts across the three phases. The conditions of the 200 first-phase districts were different from those of the phase two and phase three districts. Many of the findings in terms of impacts on income, wages and migration could be different for districts of different phases. With the amount of effort put in by the authors of this book, inclusion of an analysis of the impacts of the programme across the three phases would have been a significant contribution.


Hirway, Indira, M R Saluja and Bhupesh Yadav (2010): Employment Guarantee Programme and Pro-Poor Growth: The Study of a Village in Gujarat, Academic Foundation: Delhi.

Pankaj, Ashok (2017): “Shift in MGNREGS from UPA to NDA,” Economic & Political Weekly, Vol 52, No 33, pp 59–68.

Updated On : 11th Apr, 2018


(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top