CHAPTER II

REVIEW OF LITERATURE, THEORETICAL BACKGROUND AND

METHODOLOGY

In this chapter, the researcher is interested in reviewing the major findings

of some of the related studies undertaken by other researchers in different places

at different times. The past literature, actually, helps the researcher to adopt,

modify and improve the conceptual frame work of this thesis. In any research

work review of literature helps to find out the past theories, axioms and

established doctrines. The scholar must be familiar with the concepts related with

the area of his interest. Going through the related literature gives an idea of the

basic concepts, theories and findings.

2.1 REVIEW OF LITERATURE

Norman Reynolds et.al., (1977) has presented, “Maharashtra Employment

Guarantee Scheme: A Programme to Emulate,”. The researcher has made an

attempt to study the rural level poverty of the EGs programme, the wage

component is redistributed through the wage employment programme, to evaluate

the role of the EGs and how it co-operates with other programmes.1

Dantwala, (1978) has made a study on, “Some Neglected Issues in

Employment Planning”. The researcher has made a study on the public works

approach to unemployment, which would make sense if it is so organized that

 53

there will be progressively less and less reliance on it, so that ultimately it

becomes redundant. He found that the economy, one providing ‘regular

employment’ to those who are lucky enough to have some productive assets and

the other a hapless contingent of employment seekers wholly dependent on those

in charge of public works, as and when they are organized.2

Kumudhini Dandekar et.al., (1980) has made “Employment Guarantee

Scheme and Food for Work programme”. The researcher has analyzed the food

for work programme in 1978-79 which helped to get an increase of 33 percent and

more in the EGs earnings of the workers and was considered the greatest

attraction of EGs.3

Kaushik Basu, (1982) has pointed out in his study on the topic, “Food for

Work: Some Economic and Political Consequences”. The researcher has analyzed

wage payment and inflation, effects from the implemented programmes. Food for

works has been implemented in many less developed countries all over the world,

and some of them for a longer period than in India.4

Hemchand Jain, (1987) found out in his paper, “Economic Impact of

NREP in Madhya Pradesh,” that employment generation is an additional gainful

employment for the men and women in the rural areas. The researcher has

revealed that his main objective is to bring out the effects of the programme

implemented in rural area for providing employment opportunity to the SC/ST

people and also, to the landless workers in other categories in rural households.
 54

The total respondents 52.95 raised their consumption level from employment and

wage rate respectively.5

Hemchand Jain (1987) observes in his article on “Planning and

Employment Achievement in Madhya Pradesh”, that in addition to

unemployment; under employment in the rural areas is the main problem.

According to the researcher, to provide adequate employment opportunities to the

population is not just a welfare measure but an important component of

development strategy to achieve growth with social justice.6

Asthana (1987) worked out in “RLEGP helps in Solving Rural

Unemployment”, the drafting and implementing of programmes of rural

development. Rural employment programmes are not doles – they create durable

community assets which give direct benefit to the village poor and broaden the

source base of the village economy and hence employment.7

Hanumantha Rao’s (1987) work, “Poverty Alleviation Programmes and

the Poor”. mainly focuses on the target groups and programmes implemented for

reducing poverty in rural areas. These programmes are implemented for selected

beneficiaries and the employment provided to the target groups.8

Bandyopadhyay (1988) in his article “Direct Intervention Programmes for

Poverty Alleviation: an Appraisal.”, focuses on poverty and poverty alleviation

programmes. The programmes are more effective with land reforms, planning and
 55

implementation at the grassroots level and a major for organization of the rural

poor.9

Shripathi (1989) made his research on, “TRYSEM,” from the study of

Dhakshina Kannada in Karnataka. The article speaks of the project approach for

training selecting prospective trades for districts. The researcher finds out that the

main objectives are reducing abysmal poverty of the masses which has been the

avowed planning in India and welfare production and equal distribution of

employment opportunity in rural India. The main focus is to inculcate managerial

and enterprising ability along with technical skill to provide for rural

beneficiaries.10

S.K.Singh (1989) worked out his article on “TRYSEM” and rural

employment generation and its main aims at equipping the rural youth in the age

group of 18-35 years and below the poverty line with the necessary skills and

technology to enable them to take to self – employment according to their

physical and mental dispositions. The researcher suggests that the programme can

provide provision to millions of rural youth to solve their economic problems, and

then find the technological problems in rural areas, and to implement the

sophisticated technologies provided for the elimination of unemployment. Low

productive work should be cleared and high productive work should be raised

among the youth.11

 56

S.M.Shah (1989) examined in his paper, “Rural Employment Need

Massive Expansion for Employment Creation and Alleviation of Poverty”, and

says that employment potential is designed to go up by 4 percent per year, well

above the expected growth of labour force at about 2.5 to 2.6 percent. Various

programmes have been implemented for generating employment opportunities

and domestic GDP were raised in the economic development.12

Hemchand Jain (1989) had made a study on “Enlarging Employment in

Rural Areas”, to achieve a more rapid and diversified growth of economic

activities development of the employment structure throughout the country. The

researcher finds out the strategy of capital intensive in agricultural field for

creating employment generation for growth strategy.13

Ramu Naidu (1989) has published a paper entitled, “Eradication of

poverty through NREP” for raising employment opportunities. In rural regions

where labour is mainly agriculture – oriented, efforts are made to generate work.

The researcher mainly focuses on the unemployment problem and to provide

supplementary work for the eradication of their poverty through selection of

schemes that provide some relief of employment in rural regions.14

Venkata Reddy (1989) suggests in his article on, “Rural Employment

Guarantee Schemes: An Observation,” that gainful employment can be provided

with a decent wage provided to all unemployed and under employed in rural

areas. The researcher points out that the main issue of the rural poverty should
 57

immediately be tackled effectively through the provision of continuous

employment for the rural poor. The different schemes in operation aiming at

creating employment for the rural poor are of ad-hoc nature mainly providing

short–term employment during the drought and famine conditions.15

Kurian’s (1990) study on “Employment Potential in Rural India: An

Analysis” with agricultural census and National Sampling Survey data for

analyzing the employment in agriculture sector in rural areas mainly focuses on

the employment potential in the rural areas with particular emphasis on

agriculture and allied sectors. A detailed analysis of labour absorption in the crop

sector on the basis of cost of cultivation data for all the major crops in the country

is presented on public policy planning for the current decade.16

Kurian (1991) examine the “Special Employment Programmes”. The

researcher is mainly concerned with the rural employment programmes in India.

JRY, NREP and RLEGP were implemented and empirically improved and added

various programmes under their scheme for creating employment opportunities in

village level.17

Kanchan Chopra (1993) has made a study of “Watershed Development;

Contrast with NREP/JRY.” Under this programme the natural capacity for

regeneration inherent in a biomass system, through the development programmes

is analyzed. According to the researcher, an assessment of the implication of the

IRDP/NREP versus the land and water-related programmes for employment

 58

generation, and natural capital regeneration asset creation and environmental

conservation has developed.18

Parameswaran Iyer (1994) in his article on “Creating Rural Employment:

JRY’s New Thrust Areas,” indicates that Employment Generation is provided

within the rural areas. The pumping of extra funds into the backward areas under

the Jawahar Rojgar Yojana provides a new opportunity for tackling

unemployment and under employment problem in these areas provided supporting

systems are shored up, under various programmes within one scheme.19

Neelakandan’s (1994) work, “JRY: An Assessment through Concurrent

Evaluation”, draws one’s attention on key issues such as the volume of

employment generation, creation of assets, wages, involvement of contractors,

wage/non-wage ratio and the opinions of JRY workers on the programme.20

Mahendra Dev’s (1995) article, “Alleviating Poverty: Maharashtra

Employment Guarantee Scheme”, makes an attempt to assess the performance of

the EGs. In terms of implementation, the EGs have made positive impact on the

levels of living of rural poor in Maharashtra. But the EGs alone cannot remove

poverty from India, and the scheme in other states should involve prior

establishment of decentralized district planning and implementing body and

assurance of adequate funds through additional taxation.21

Mahendra Dev (2000) used data (NSS and NHDR) of different countries

for the period 1983-84 to 1996-97. The researcher made his study on Economic
 59

Liberalization and Employment in South Asia. His empirically evidence shows,

on the other hand, that employment growth has picked up despite the contained

existence of ‘labour market rigidities’. To improve the employment climate in the

region governments should accord priority to investment in physical and human

capital institution development and the reduction of inequalities.22

Mahendra Dev, (2000) in his article, “Economic Reforms, Poverty,

Income Distribution and Employment in the Pre - and Post - reform periods,

identifies the components of reforms having impact on these identifications. The

newly emerging disparities with regard to urban and rural poverty inter-state

inequalities, and agricultural sector, lay emphasis on agricultural growth and rural

infrastructure. Where the rural poverty was declining faster in 1980s, it has been

halted in post 1991, where the income distribution has used consumption

distribution as proxy. An analysis of the impact of public expenditure on roads

and direct poverty alleviation programmes provide employment generation

activity. The researcher observed only three indicators, for analyzing regional

disparities.23

Balla et. al., (2003) in their paper on Rural Employment and Poverty,

consider employment and income growth agriculture and non - agriculture in rural

urban areas under various sectoral growth rates and employment elasticities. It

deals with generating employment in the years and labour force as also in raising
 60

wages and productivity of workers. It also considers possible strategies for

increasing employment significantly reducing rural and urban poverty by 2020.24

Chandra Sekar et.al. (2004) in their article on, “Feasible in Rural

Employment Guarantee” indicate that in the political concern, socio economic

issues are identified. The political parties should implement the economic policies

and create employment opportunities. However the government’s promise of

guaranteeing employment in rural areas through public works programmes holds

good and work has been provided at least 100 days a year. For employment

guarantee scheme it is targeted at increasing capital formation and productivity in

rural India with raised assets.25

Vaithyanathan’s (2005) article, “Employment Guarantee and

Decentralization” examines the activities among the panchayat level in all over

the country. This article reveals that the main objective of decentralization must

be within the panchayat level of the work in local development activities.

Protagonists of the NEGS do favour entrusting the programme to panchayats and

incorporating provisions to this end in the national law. NEGS must be combined

with a campaign strong opinion and mobilize elected panchayatdars all over the

country to bring pressure on the central and state governments to strengthen

democratic panchayats and empower them to plan and implement all local

development programmes.26
 61

Raghav Gaiha (2005) in his paper “Does the Employment Guarantee

Scheme Benefit the Rural Poor in India, Some Recent Evidence from Maharashtra

state has studied about EGs in two selected villages in Ahmad Nagar District in

Maharashtra in 1999-2000. The researcher has observed in his study that with

reallocation of EGs resources in favour of the poorest regions, the programs

poverty- alleviating potential is high-despite a sharp fall in overall participation in

this scheme in recent years.27

Rinku Murgai et.al. (2005) used data (NSS) in the period 1999 – 2000 for

analyzing the employment opportunity in rural India. This article assesses the

impact on poverty and the likely cost of an employment guarantee scheme

providing 100 days of work to the rural people during the lean season. The wage

rate the scheme may help reduce rural poverty to 23 per cent at a cost of 1.7 per

cent of GDP. But given the extra cost of the scheme a greater impact on poverty

would be achieved by taking the same fiscal outlay and allocating if equally to

everyone, whether poor or not.28

Randall Wray (2006) examines in his “Lesson from Argentina’s

Employment Guarantee” job security programmes that are provided and

implemented for poverty line communities. The researcher explains the economic

crisis of 2002. Argentina established through the plan ‘Jefes Y Jefas Hogar,’ a job

creation programme, in the hope that India might learn from that experience. The
 62

Argentinean programme employed as much as 5 per cent of the population, drew

in large numbers of women cost just 1 per cent of GDP and far from “digging

holes” created productive assets.29

Puran Singh’s (2006) article, “NREGS A Task Ahead” confers legal right

to employment on the rural citizens. This article is a modest attempt to critically

examine the various provisions of this scheme with special reference to the

delivery mechanism and role of Panchayat Raj institutions the implementation of

the scheme. The NREGS is imperative that a village level micro plan is prepared

and the work area plan.30

Vinayak Reddy’s (2007) work “NREGS an Approach to Inclusive

Growth,” suggests more effectively a new approach for provided the social

security work in job in rural BPL households. The delivery systems can be

improved with the new approach of participatory development, social

mobilization, right to information, involvement of civil society and panchayati raj

institutions. It is the services economy and it’s providing the employment

opportunity with inclusive growth in rural India.31

Pinaki Chakraborty (2007) speaks in his, “Implementation of

Employment Guarantee: A Preliminary Appraisal,” of public employment

programmes for targeted groups in India. The researcher points out with help of

union budget documents, allocation and expenditure in the programme. Its

 63

allocation is only marginally higher than what was spent in the past by the

government on various rural employment programmes. It is a demand – driver

scheme and it has fallen far short meeting demand in some states. The fund

utilization ratio also varies widely across states.32

Vidhya Das et.al., (2007) made a study on, “Illusions of Change” in

Orissa and observed that the National Rural Employment Guarantee Act as

implemented. The researcher revealed that the implementation of NREGA has

resulted in grandiose claims of expenditure but very little to show in reality.33

Chhaya Datar (2007) deals with “Failure of NREGS in Maharashtra.”

This article reveals that the NREGS and collected data with the help of the

organization in Chandra Pur district of Maharastra, made a survey of 20 villages

and got 99 persons’ identity card but only 38 beneficiaries had job cards. There is

no enthusiasm among the political class as well as bureaucracy to accept the new

scheme, because, power is decentralized. Earlier, MEGS work has been done by

contractors and orders were got by bribing to line departments. This programme

or scheme has been implemented as a populist measure for last minute support to

prove their concern for drought affected farmers and landless labour get some

sanctioned work.34

Mihit Shah (2007) in his, “Employment Guarantee, Civil Society and

Indian Democracy” reveals that the Indian democracy, with millions of our people
 64

hungry, cynical and insecure, and living under the barrel of the gun, the NREGA

has the potential to provide a big push in regions of distress. NREGA as to be able

to realize its potential, the role of civil society organization is critical. But this

calls for a new self – critical politics of fortitude, balance and restraint.35

Ramaswamy (2007) worked out on (ASI and NSS), Regional Dimension

of Growth and Employment and inequality has emerged as a key issue in recent

discussions of development policy. States within India differ greatly in terms of

economic growth and employment potential. This article examines the regional

employment in India during1983 to 2004-05. The results confirm widening inter -

state disparities in income in the first quinquennium of the 21st century a

continuation of the trend of the 1990s. A geographic concentration of skilled

labour is observed in financial and business services.36

P.K.Singh (2007) presented a study on “NREGA: a New Hope for Rural

Employment Generation,” and it’s meant to generate wage employment on

productive works, which would be sustained benefits to poor and contribute to the

creation of rural infrastructure. The researcher reveals that the NREGS provides

the country with a potential social safety from poverty through implementation of

this programme. It has critical improving inclusiveness. It should eliminate

poverty and improve rural infrastructure.37

 65

Jean Dreze (2008) viewed that the extension of the MGNREGS to the

whole country is an unprecedented opportunity to build the foundations of social

security system in rural India, revive village economies, promote social equity,

and empower rural labour.38

Ram N. (2008) in his analysis points out that the importance of the

MGNREGS has increased in the wake of the global economic slowdown. The

slowdown would put a squeeze on rural livelihoods and incomes. Hence, unless

there is massive injection of demand into the economy that puts purchasing power

into the hands of the rural masses, especially the poor, who have to go out and

work to support their families, the economy will take a long time coming out its

difficulties.39

Pramathesh Ambasta, et.al. (2008) from their analysis of two years of

MGNREGS reveal that, in Madhya Pradesh’s Tikamgarrh district, only one social

audit was reported, that too in October 2006. Even for that reports were not

available for public scrutiny. In Gujarat, the planning process again did not

involve the people directly. While records suggest that the Gram Sabha was

involved, field checks belie that claim. In Rajnandgaon, Raigarh, Sarguja and

Jashpur districts of Chattisgarh, works were focused mainly on activities for

which standardized estimates were available. Plans were made and approved of at

the “top” and sent downward for implementation. In Bolangir district of Orissa,

executive officers of Gram Panchayats routinely dissuaded sarpanchs from putting

 66

up a demand for work under MGNREGS by raising the bogey of getting caught

under the strict provision of the law.40

Sudha Narayanan (2008) has done her research work on “Employment

Guarantee Women’s Work and Childcare”. It speaks of the social audit and

economic wellbeing of rural labuorers and their families. The researcher who has

conducted the survey in 2007 in two blocks at Villupuram District in Tamil Nadu

for her article, the respondents has worked at NREGP. Almost 50 per cent left

their children at home, while 19 per cent brought their children to the worksite.

About 12 per cent of the respondents reported leaving their children at balwadi or

anganwadi and around 11 per cent at schools. However, the act overlooks the fact

that childcare is a problem for many of the working women, especially for young

mothers. The balwadi or anganwadi were providing the nutrition food and

childcare facilities are providing in village level, of their child.41

Mihir Shah (2008) found that the same implementation structure that has

failed rural development over decades cannot be deployed for a radically new

programme like MGNREGS. Further he stated that with reforms on these lines,

the MGNREGS have the potential to not only transform livelihoods but also

herald a revolution in rural governance42

Raghbendra Jha et. al., (2008) analyzed the NREGP in India- A Review

collected the data from selected villages in Udaipur district in Rajasthan in 2007.

The researcher has analyzed the participation in NREGP of different socio-

 67

economic groups used in methodology probit analysis of participation. He

observed the econometric evidence the disadvantaged groups had significantly

high probabilities of participating in NREGP. It is found that the mean

participation was 59 days and the targeting was satisfactory.43

Anish Vanaik et. al.,(2008) has made a study of Bank Payments end of

Corruption in NREGA study in Orissa states. The researcher suggested that

payment of wages can be remitted into bank accounts for work carried out under

the National Rural Employment Guarantee Act. Improving the system of bank

payments can only go part of the way towards that end. Building a culture of

transparency and accountability in the implementation of NREGA remains

extremely important.44

Another study done by Sainath P. (2008) in Andhra Pradesh state itself

revealed that the MGNREGS was having multiple and layered effects. With better

wages, the bargaining power of the weakest has gone up a notch. For some, their

access to costly services like health has risen slightly. MGNREGS work has been

a lifejacket in the flood waters of the price rise.45

Siddhartha et.al., (2008) from their field experience reported that worksite

facilities were not provided in 202 Gram Panchayats coming under the states,

namely, Andhra Pradesh, Assam, Chattisgarh, Gujarat, Haryana, Himachal

Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Manipur, Orissa, Rajasthan,

 68

Utter Pradesh, Uttarakhand and West Bengal States. Further, they revealed that

tempering of muster rolls by using white fluid and marking absent as present and

also overwriting the number of days worked was noticed in general during

examination of muster rolls pertaining to the works selected in certain selected

Gram Panchayats.46

Anish Vanaik (2008) from his survey in Jharkand State revealed that even

when employment was offered, there were delays in the wage payments. Against

the legal stipulation of payment within 15 days, funds for payment of wages were

often released only 40-50 days after works had been completed. That means when

alternative employment was available, workers would choose to leave the

MGNREGS.47

Economic and Political Weekly (2008) in its editorial column reported

that findings of a number of social audit surveys of MGNREGS works carried out

by NGOs which reveal certain similarities. Where the vested interests are firmly

in control of the local administration, there are instances of demands for

exorbitant bribes for making job cards, attempts to force Dalits out of the Scheme,

bogus registration on the muster rolls, and intimidation of people’s groups

demanding accountability. Where the local administration has been open to the

idea of allowing civil rights groups monitoring the scheme, this has ensured much

less corruption. The conduct of social audits of the scheme by the NGOs, besides
 69

educating the people about the scheme itself, has helped enhance the awareness of

the villagers of their rights under the scheme.48

Santosh Mehrotra (2008) points out that it is perfectly possible to put in

place a system to minimize corruption in the MGNREGA 2005. Equally

important, the original administrative support for the MGNREGS was pegged at 2

percent, which was myopia to say the least. However, 4 percent of the programme

costs allocated to administrative costs and professional support was still woefully

low and does not recognize the fact that a programme of the scale of the

MGNREGA 2005 requires serious professional support, not government business

as usual.49

Reetika Khera (2008) made research on “Empowerment Guarantee Act”

the experience of the jag rut adivasi Dalit Sangthan in Madhya Pradesh shows the

power of grassroots organizational work in activating the NREGA. Levels of

NREGA employment in the Sangthan areas are as high as 85 days per house hold

per year, and nearly half of all working house hold has got 100 days of work. The

researcher found that all the workers also earn minimum wage and the act can also

be an opportunity to promote over all rural development and alter the balance of

in village society.50

Hanumantha Rao (2008) in his study, “Implementation of APREGS and

INDIRAMMA in Andhra Pradesh” provides useful employment and assures of

 70

livelihood in household in village level. The analysis of the schemes reveals that

the rural people should recognize one stark truth. Andhra Pradesh implemented

APERGS and INDIRAMMA schemes in rural household. The main objective of

the employment schemes that guarantee a livelihood legally for them came into

being and this obviates the need for migration in search of jobs to other places

leaving their native land.51

Amita Shah et.al., (2008) in her article, “Experience of the Maharastra

Employment Guarantee Scheme,” are there lesson for NREGA. The NREGA is

one of the major land marks in the process of policy formulation, adopting the

rights–based approach, in India. Which the Act draws heavily on the Maharastra

Employment Guarantee Scheme, these empowerments, the NREGS has

experienced a number of operational hurdles during the first two years of its

implementation. This article attempts to do this in the light of the existing

literature and draws implications for introducing necessary reforms for

operationalization of the NREGS. The idea is to feed into the ongoing processes

of identifying operational issues and assessing the need for undertaking the

necessary corrective measures.52

Menon and Sdha Venu (2008) in their work on Right to Information Act

and MGNREGS in Rajasthan show that many of the challenges associated with

MGNREGS implementation could be effectively tackled if there was a vigilant

 71

civil society to monitor the programme. Further, the experience reveals that

MGNREGS cannot be treated as an isolated piece of legislation. It is a guarantee,

which has to be demended with the proper support of right to information. There

lies the role of grass root level organizations and Panchayati Raj Institutions

(PRIs) to develop awareness and capacity among local people to realize the

importance of both legislations and their complementary role in making it

successful.53

Indira Hirway, et.al. (2008) from their assessment on the impact of

MGNREGA works based on Social Accounting Matrix (SAM) model in Nana

Kotda village North Gujarat to understand the village economy revealed that (i)

Indirect employment generated was 994 person-days (826 man-days and 168

women-days), (ii) Direct employment generated was 9812 person-days for 238

men and women form 161 households and, (iii) Low value of multipliers that is

50 percent of the goods came from outside the village.54

Performance Audit Report (2008) of MGNREGS reported by the

Ministry of Rural Development revealed that (i) The Governments of Arunachal

Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir,

Jharkhand, Kerala, Maharahtra, Manipur, Punjab, Rajasthan and Tamil Nadu (13

states) did not formulate rules for carrying out the provisions of the Act as of

March 2007. (ii) In Tamil Nadu, though the State Employment Guarantee

Councils (SEGCs) was constituted, no periodicity of meeting was fixed and

 72

Council had met only once during 2006-07. (iii) The Governments of Assam,

Bihar, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir,

Hjarkhand, Karnataka, Madhya Pradesh, Manipur, Nagaland, Orissa, Sikkim,

Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal (18 states) did not

appoint dedicated Gram Rozgar Sevaks in 303 test checked Gram Panchayats and

(iv) Out of 68 districts test checked, District Perspective Plan (DPP) was not

prepared by 40 test checked district.55

George Cheriyan (2008) in his analysis on ‘Improving Public Expenditure

Outcomes of Mid Day Meals Scheme and MGNREGS through Social

Accountability Approaches: Field Experiences from Rajasthan, India’ come out

with the following major findings: (i) Majority of the surveyed people endorsed

the MGNREGS stating that it; provides employment during lean season in own

villages itself (97 percent), has improved facilities in the villages (94 percent), has

ultimately helped in reducing migration (93 percent), and has helped in creating

assets, which will result in sustainable. (ii) 71 percent of the women surveyed felt

that the increase in incomes had increased their importance in the family leading

to increased in decision making. (iii) Lack of participation in the decision making

process (42 percent) as people were not informed about Gram Sabha meetings.

(iv) No effective grievance redress mechanism was available (39 percent).56

Richard Mahapatra, et.al. (2008) in their work observed that (i) Around

three per cent of India’s population has worked under the MGNREGS. (ii) More
 73

than 10000 villages are implementing the MGNREGS. During 2006-07 each

village spent at an average of 900000 for creating six productive assets like

water conservation sttuctures (only completed works till December 2007). In the

last two years, each district has spent around 44 crore. (iv) Many villages were

reaping the benefits of using MGNREGS money for productive purpose like

water conservation. But there were many more villages which have not been able

to do so. (v) Governments are approaching the MGNREGS as a purely wage

employment programme thus negating the development potential of MGNREGS

for a large portion of India’ rural population.57

National Federation of Indian Women (NFIW) (2008) made a study on,

‘Socio-economic empowerment of women under National Rural Employment

Guarantee Act in Rajnandgaon District of Orissa and Cuddalore District of Tamil

Nadu’ and came out with the findings that (i) Women, in general, was taking

MGNREGS with pride. They were able to substantially contribute to family

expenditure which was seen to have brought a marked change in the traditional

women’s role and place in their family. When women were asked about the

importance of MGNREGS for them, majority of them said to have felt the

importance because of employment opportunities, growing spending capacity and

creation of community assets. (ii) In Cuddalore it was 81 per cent and 96 percent

in Rajnandgaon which is said to have spent for food and consumer goods. On the

whole there were good number of workers who were fond to be spending on
 74

children’s education and very few workers who claimed to have spent on clearing

small debts.58

Rajalaxmi Kamath, et.al. (2008) made a MGNREGS survey in

Anantapur, Adilabad districts of Andhra Pradesh, and Raichur and Gulbarga

districts of Karnataka State and found that: (i) In Andhra Pradesh the beneficiaries

were much more aware of the essential features about to Karnataka (12.9 percent

in Gulbarga and 17.2 percent in Raichur). (ii) Respondents across the four districts

said that if the MGNREGS was properly implemented it would be very useful

(99.7 percent in Anantapur, 96.8 percent in Adilabad, 88.2 percent in Gulbarga

and 86 percent in Raichur). (iii) The percent which said they would continue to

migrate even if MGNREGS work was available regularly was very low (1 percent

in Anantapur, 8.3 percent in Adilabad, 10.6 percent in Gulbarga and 11.3 percent

in Raichur). Although there were many local officials who said people were not

interested in work because they preferred to migrate, the survey clearly brought

out that this was not true.59

Kartika Bhatia and Ashish Ranjan (2009) revealed that it was also

possible that the promise of local employment was luring workers to stay back

and that if those hopes were dashed migration would resume. Delays in wage

payment could intensify that potential “discouragement effect” and push people

back into the web of migration. If this setback is to be averted, MGNREGA 2005

employment must be expanded and made more predictable.60

 75

Jean Dreze and Reetika Khera (2009) from their field survey reported

that, in Masmohna in Jharkhand’s Koderma district the survey team found

conclusive evidence that a private contractor had cheated MGNREGS workers

and embezzled their wages. That evidence was presented at a massive public

hearing attended by three members of the Central Employment Guarantee Council

(on June 18, 2008) and confirmed again in detailed follow-up by the Koderma

Sub-Divisional Officer (SDO). Yet, in the First Information Report (FIR) lodged

against the culprits, which was supposed to be based on that very enquiry, the

contractor’s name was missing. He apparently has the “Protection” of the local

Member of the legislative Assembly.61

Kamayani Swami (2009) from a survey in Mahua Tand in Jharkhand’s

Deogarh District revealed that the well constructed by Taufique Zarra reminds the

team of the tragic Tapas Soren episode. In the short video recording of his last

words Tapas Soren testifies that corrupt government machinery had driven him to

take his own life. He had tried to construct a well on his own land under the

MGNREGS but was unable to cope with the frequent demands for bribes.

Helpless and distraught Tapas set himself ablaze at the District Collector’s Office

in Hazaribagh to highlight his plight and warn others about this trap. But

Taufique, unaware of the Tapas’ fate, fell into the same trap.62

Jean Dreze and Siddhartha (2009) from their analysis of MGNREGA

2005 revealed that there is a troubling lack of clarity about the various actors’
 76

basic responsibilities under the MGNREGA 2005. The Act directs each state

government to notify an “employment guarantee sheme” to give effect to the work

guarantee. The combination of the Central Act with state-specific schemes ( and

generally, the complex Central-State relation behind the MGNREGA 2005) calls

for rigorous coordination between Central and State governments. That was not

happening. To illustrate, the Union Ministry of Rural Development does not even

have a copy of each of the State schemes. The result was confusing duality in the

source of norms.63

Gopal.K.S. (2009) has written about, “NREGA Social Audit, Myths and

Reality” research had been conducted in Andhra Pradesh. The researcher got

ground there and found that audits had achieved much less than advertised and

they (rural people) had ignored many important aspects of implementation of

NREGA. The social audit process has a long way to go before it can claim to have

contributed to transparency empowerment and good governance.64

Mamidipally Rajanna and Gundeti Ramesh (2009) from their study

revealed that MGNREGP has become a beacon of light in the rural areas and

contributed substantially to the increased living and economic conditions by

reducing the income imbalances in the rural area. Further, it was revealed that

reduction of wage differences in various works by creating equal wages to male

and female workers helped to overcome the uncertainty in the employment,

helped to meet the rising prices in the market, reduced the migration level to other
 77

areas and helped to some extend in reducing the disguised and seasonal

unemployment in Karimanagar District, Andhra Pradesh State.65

Rahul Lahoti and Sanjay G. Reddy (2009) from their study pointed out

that the generation of adequate purchasing power is, however, a crucial means to

ensure food security in a market economy, which India is increasingly witnessing.

As such, in addition to protective measures such as the MGNREGA 2005, a

broader strategy of inclusive growth- a generalized increase in opportunity across

the society- is the essential means to secure the fulfillment of the right to food.66

Lakshman Narayan (2009) found out in Tamil Nadu State that labour

migration from rural to urban centers and employment –focused government

policies such as the Mahatma Gandhi National Rural Employment Guarantee

Scheme (MGNREGS) are having a noticeable effect on the supply of agricultural

workers in farms across the state. Further, he maintained that, districts such as

Theni exemplified some of the complexities of this labour market effects.67

Besides, Lakshman Narayan (2009) also indicated that variations in

taking up the Mahatma Gandhi National Rural Employment Guarantee Scheme

(MGNREGS) are being observed at the district level in areas such as Theni

District. Geographical variations within Theni District correspond to differential

rates of taking up the scheme. The southern parts of the district such as the

Cumbum valley are well irrigated due to their proximity to Periyar River. The
 78

lush farmlands of this region, with crops such as paddy and coconut and

vineyards, stand in stark contrast to the dry tracts of Andipatti to the north-east.68

Mahim Pratap Sing (2009) from his survey in Badwani district in

Madhya Pradesh revealed that Badwani has become an interesting case study for

people’s struggles against the poor implementation of the Mahatma Gandhi

National Rural Employment Guarantee Act. It also proves that not everything was

right with this much celebrated social welfare scheme in the state which claims to

be “number one” in the implementation of the Act.69

Aruna Roy and Nikhil Dey (2009) pointed out that, before tinkering with

the MGNREGA 2005 in the name of reforms, the government must ensure that

the foundation of the scheme are strengthened. No change should be introduced

without a rigorous debate that centrally involves its primary constituents. Instead

of trying to tinker with the second-generation of reforms, the government needs to

first demonstrate that it can ensure an effective response to this demand.70

Balchand K. (2009) at the behest of the Planning Commission prepared an

all India report on the basis of evaluation of MGNREGS tapping 6000

respondents spread across 20 districts across the country, in which he found that

there was a shift in the expenditure pattern on foof and non-food items with

families spending more on both the counts. Underlining the issues straddling the

implementation of the scheme, the report maintained that 80 percent of the

 79

households failed to get a job within 15 days of their demand for work and worse

still they were not given unemployment allowance either.71

Yet another study attempted by Mahim Pratap Singh (2009) on the

implementation of the MGNREGS in Madhya Pradesh State found that, in

Bundelkhand Block the MGNREGS has practically failed in either providing

employment, curbing migration or creating viable community assets. Further, the

basic premise of the MGNREGS, which is, consultation with the community

through Gram Sabhas on the nature of work to be taken up, has hardly been

fulfilled.72

Manmohan Singh (2009), the Prime Minister of India and architect of

India’s Policy on inclusive growth calling for redoubled efforts for mitigation of

rural distress from the after-effects of drought, said that the prime talk is to put

purchasing power in the hands of the most needy population using the mechanism

of the Mahatma Gandhi National Rural Employment Guarantee Act

(MGNREGA) 2005. Further, applauding the functioning of the MGNREGS he

stated that it had created an effective safety net in rural India against poverty and

afforded a measure of protection against natural calamities and market- induced

vulnerability.73

Rahul Gandhi (2009) pointed out that the “real power” of the Mahatma

Gandhi National Rural Employment Guarantee Act (MGNRGA) 2005 was in how
 80

it reshapes the labour market and puts a floor below poor people. Further, he

maintained that the scheme has changed completely the dynamics in poor states

like Uttar Pradesh, in areas where it has been used effectively, which frankly were

limited and, in states like Andhra Pradesh, it has “revolutionized the system”.74

Madhusudan Mistry (2009), while examininig the Dalits in the context of

the scheme, pointed out that the focus of MGNREGA 2005 as expressed in its

objective is to enhance livelihood security in rural areas by providing at least 100

days of guaranteed wage employment in a financial year to every household whos

e adult members volunteer to do unskilled manual work, and hence to enhance

livelihood security in rural areas as mentioned in the objective is to provide work,

and as reported many times, only a minuscule percentage of people could get

complete 100 day’s work.75

Sainath P. (2009) from his survey in Andhra Pradesh State, on the Impact

of MGNREGS on social structures brought to limelingt that it would be rash to

conclude that the MGNREGS was breaking down social hierarchies. It is certainly

calling them into question. Further he pointed that there is also economic

necessity. “Even people with 25 acres in rain-fed farms seek MGNREGS work.76

Jean Drezeb (2009) from his survey in Khunt District of Jharkhand State

revealed that the delays in MGNREGS wage payments were not just operational

hurdles and they reflect a deliberate attack on the scheme. Further, the delays in

the wage payment were not confined to the banking system. Very often, it takes
 81

more that 15 days for “payment orders” to be issued to the banks by the

implementing agencies (for example, the Gram Pachayat). Thus, there were lapses

outside the banking system too.77

Jean Dreze (2009) attempted a study in Jharkhand State on the financial

performance under the MGNREGS and the study has revealed that tremendous

potential of MGNREGS was in danger of being wasted due to massive

corruption. Judging from the survey findings in Koderma district and Palamau

District, transparency safeguards were routinely violated and funds were being

misutilized.78

Prasad Y.P. (2009) viewed that the investment-starved farm sector is a

recipient of Rs.18, 155 crores investment through wages for the creation of assets,

75 per cent of which are irrigation works. MGNREGS, therefore, must lay down

specifically that the authorities are accountable to maintain, run, and own these

assets to fulfill the objective of strengthening the prosperous rural livelihood

resource base.79

SAAYA (2009), a network of voluntary organizations working among

Muslim women in the state of Tamil Nadu, pointed out that works implemented

under MGNREGS should be culturally sensitive in order to increase participation

of the Muslim community and added that, many Muslim women were not

benefited by the Scheme due to the tradition of being confined to their housed.
 82

Works such as de-silting water bodies, digging wells and laying roads did not

attract these women who prefer to work from their home itself.80

Ratna M. Sundarshan (2009) examined the MGNREGS and women’s

participation in Kerala, Himachal Pradesh and Rajashthan State and found that (i)

Wider impacts on market wages, supply of women’s labour, savings, intra

household allocation of responsibilities, were observed in varying degrees. (ii)

Choice of works reflected standard choices (roads and connectivity; water bodies

and irrigation). (iii) Clear evidence of ‘strong developmental state’ in both Kerala

and Himachal States.81

S.P. Sing and D.K. Nauriyal (2009) from their study on ‘System and

Process Review and Impact Assessment of MGNREGS in the state of

Uttarakhand’ revealed that the strength of the scheme in the study area was that

despite extremely low share (>10 percent) of women’s employment in the total

employment created under MGNREGS, yet wherever the women have been

employed, it was observed that (i) They stand empowered as they get 25 percent

higher wages as compared to pre-MGNREGS implementation period, (ii) their

employment avenues closer to the residential area and decision making power

within the household have increased. And the weakness of the scheme was that

low awareness/ignorance on maters such as undertaking the works on the pattern

of other places rather that identifying genuine needs of the area, demand driven

scheme has been transformed into target-oriented and supply-driven, receipts were

not issued for the applications for jobs, absence of social audit and vigilance and
 83

monitoring committee members were found to be ignorant about their rights and

responsibilities.82

Dipjoy Sen Roy and Debabrata Samanta (2009) in their study on, “Good

Governance and Employment Generation through MGNREGS in West Bengal”

revealed that participation of women in gram sansad meeting will increase the

person days created per household, which is in conformity with economic logic.

Accountability, which we measure through the presence of complains register,

was also found significant and shows positive relation with the MGNREGS

performance. Utilization of own source revenue in local development has

significant positive impact on person-days created per household as per economic

logic, which represents efficiency and effectiveness of government that plays a

positive role in successful implementation of MGNREGS?83

Reetika Khera and Nandini Nayak (2009) from their field survey in six

states of Inida in 2008 revealed that gender equality remains a distant goal was

evident when they looked at women’s participation in Gram sabhas as only 33

percent of the sample workers stated they had attended a Gram Sabha meeting.

However, they reiterated the benefits from the MGNREGS for women: work was

available at the statutory minimum wage allowing workers to get work in their

village, as a result of which migration and hazardous work has been avoided by

many. These benefits should adequately recognize and efforts should be made to

strengthen these gains.84

 84

The Annual Repot of the Ministry of Rural Development(2009-10)

disclosed that in 2009-2010, up to December 2009, an amount of `18,950 crore

has been utilized out of `39,100 crore and during the same period 160 crore

person-days of employment has been generated across the country. At the national

level, average wage paid under MGNREGS has increased from 65 in financial

year 2006-07 to 88.44 in financial year 2009-10. In financial year 2009-10,

36.51 lakhs works were undertaken, of which 51 percent was for water

conservation, 16 percent for rural connectivity, 14 percent land for development

and around 17 percent for provision of irrigation facility to individual

beneficiaries.85

Pranab Mukherjee (2010) , The Finance Minister of India, identifying

the Mahatma Gandhi National Rural Employment Guarantee Scheme as a major

initiative to directly address chronic poverty and unemployment in rural India,

pointed out that, the success of this programme has helped in mitigating the

adverse impact of the crises. Further, he maintained that the momentum in rural

economy has helped a relatively quick recovery of growth in the country. We

need to replicate the successful models in other areas also to eliminated the stigma

of having the highest number of poor people in our country.86

Amita Sharma (2010) has revealed that (i) Women’s new found identity

and economic empowerment, (ii) Taking the wages directly through their

accounts, (iii) Increased spending of earnings from MGNREGS on food,

 85

consumer goods, education of children and offsetting debts, (iv) Work availability

in villages increased post MGNREGS, (v) Decision-making power for women

increased post MGNREGS with additional income, (vi) Fixed working hours an

incentive, (vii) Work easily available, (viii) Breaking caste and community issues,

(ix) Socio-economic benefits and, (x) Easy access to credits, could be attributed to

MGNREGS.87

Sivakumar Sowmya (2010) who conducted social audit in Durgarpur

District of Rajasthan, revealed that the Mahatma Gandhi National Rural

Employment Guarantee Act, which has revitalized the rural landscape across the

country, stands diminished in the land of its birth, Rajasthan State, hijacked and

held to ransom by vested interests and stripped of its backbone of an open social

audit. Hence, the author suggested that, as the Andhra Pradesh State experience

has shown, there is one ingredient that can bring back its vitality:

institutionalizing citizen audits and added that, the single most important

ingredient missing in the social audit attempts was the absence of a strong

political and administrative will.88

Sabhasish Dey and Arjun Bedi (2010), in their study of the functioning

of the Mahatma Gandhi National Rural Employment Guarantee Scheme between

February 2006 and July 2009 in Birbhum district, West Bengal State, reveal that,

in order to serve as an effective “employer of last resort”, the programme should

provide proportionately more job-days during the agricultural lean season and
 86

wages should be paid in a timely manner. Further, they revealed that while there

were long delays in the wage payment in the first year of the programme, since

then, the payment lag has declined to the range of 20 days. While that delay was

not consistent with the provision of the Act, it is a clear improvement from the 42-

days lag observed in the first year.89

Rakesh Tiwari et.al., (2011) from their survey reported that, the activities

undertaken under the Mahatma Gandhi National Rural Employment Guarantee

Act in Chitradurga district, Karnataka, were assessed for their potential to enhance

and provide environmental services. Key programmes implemented in 20 villages

during 2009 were studied using rapid scientific assessment methods. An indicator

approach was adopted to analyse environmental services such as water for

irrigation and improvement in soil quality. The status of environmental services

before and after implementation of the activities was examined and vulnerability

indices were constructed and compared. Their findings clearly indicate that the

NREGA has provided multiple environmental services and reduced vulnerability,

apart from providing employment and income to rural communities. The

environmental services include groundwater recharge, water percolation, and

more water storage in tanks, increased soil fertility, reclamation of degraded lands

and carbon sequestration. These services contributed to, and had positive

implications for, increased crop and livestock production.90

 87

Puja Dutta et.al., (2012) examines the performance thus far of the

MGNREGS in meeting the demand for work across states. They examine the

evidence for India as a whole using the household- level data from the National

Sample Survey (NSS) for 2009-10. They confirm expectations that the demand

for work on MGNREGS tends to be higher in poorer states. This appears to reflect

the scheme’s built-in “self-targeting” mechanism, whereby non-poor people find

work on the scheme less attractive than do poor people.91

Sheshrao Maruti et.al., (2012) from their assessment say that the

possibility of the scheme becoming a distant dream for bottom of the pyramid

cannot be ruled out due to the problems associated with its implementation.

Therefore, there is an urgent need to make all-out efforts to see that the scheme

gets implemented in all its real spirit. Then only one can proudly say that the

“MGNREGA is Hope of the Poor”. In nutshell, “It is like virus in the computer

system, one has to remove virus, before it removes our files by adopting suitable

anti-virus”.92

2.1.1 Research Gap

From the foregoing analysis of relevant literature as also specific studies, it

is revealed that adequate research has not been done to study the role of Mahatma

Gandhi National Rural Employment Guarantee Scheme in Tamil Nadu unlike

other States, where the scheme is held successful. Further, the present researcher
 88

has not found any Ph.D. thesis carried out about the topic. Hence, the present

study was made to find the relevance of MGNREGS scheme in the selected area

of study.

2.2. THEORETICAL BACKGROUND

It is a universally accepted fact that the agricultural sector is by itself,

incapable of creating additional opportunities of gainful employment in the wake

of increasing population. In most developing countries, the rural labour force is

growing rapidly, but employment opportunities are not keeping pace with it. As

the land available for the expansion of agriculture becomes increasingly scarce,

the non-farm employment must expand if deepening rural poverty is to be

avoided. The non-farm employment (NFE) is becoming an important

phenomenon in the Indian Economy. The present scenario shows, especially since

1970s, an increasing rate of NFE not only in India, but also all over the world.

The proportions of NFE are found greater in the more developed countries than in

those of the developing countries. It has been estimated that non-farm activities in

rural areas are a primary source of employment and earnings for approximately

one quarter of the rural labour force in most developing countries and a significant

source of secondary earnings for the small and landless farmers during the slack

seasons. The growing non-farm employment, and its magnitude and directions

vary among villages depending upon their economic and location factors.

Agricultural sector alone cannot provide the ultimate solution for rural poverty,
 89

unemployment and underemployment. A long term strategy for structural changes

in employment and earnings may be necessary. In the rural households, out of

necessity, workers are being pushed into the non-farm sector, and pulled by the

dynamic rural non- farm opportunities. The non-farm employment may include

construction, quarrying, repair maintenance of farm implements, vehicles

servicing and several other petty semi – skilled works either within the villages or

in their urban or semi – urban neighborhood.93

Chandha examined the changing structure of employment and earnings

among the weaker sections of two highly populous and developing Asian

economies, India and Indonesia. The author first delineates three scenarios

epitomizing the changing level of development in rural Asia, general economic

backwardness, fairly developed agriculture, but where non-agriculture avenues of

employment are scarce and a well-developed agricultural sector combined with a

diversified network of other avenues of employment. The Researcher then

presents the results of his field survey in India covering over 1000 households

spread over six villages in three different states. These data are compared with the

situation pertaining to Indonesia based on an exhaustive survey of available

literature. Among the major conclusions of the study were the crucial role played

by non-farm employment in poverty alleviation; that it is futile to simply increase

employment opportunities without paying attention to productivity and that the

trickle-down effect actually works in practice.94

 90

Higher levels of earnings resulting from the process mentioned above

would enable workers to spend more on education and skill formation of their

children, thus raising the productive capacity of the future workforce, and

creating necessary conditions for achieving higher levels of economic growth.

The process would thus complete the virtuous circle of economic growth

leading to poverty reduction via growth of employment with rising

productivity, and reduced poverty creating the possibility of further increases in

productivity and higher rates of economic growth (see Figure 1). The kind of

growth with such a virtuous circle in operation can be termed as pro-poor

growth.

Figure 1: Virtuous circle of links between growth, employment and poverty

reduction

Economic Growth

Increased Productive Productive Capacity

capacity

Higher Expenditure on
health, education and skill Employment with rising
development productivity

Higher income of the

poor
 91

Indeed, the conceptual framework outlined above for analyzing the linkage

between economic growth, employment and poverty basically follows a demand-

supply approach. The variables that are expected to influence incomes of the poor

from the demand side include employment intensity of growth, shifts in the

employment structure towards higher productivity sectors, technology, creation of

assets for the poor, etc. From the supply side, an important factor is the ability of

the poor to integrate into the process of economic growth and get access to the

jobs that are created. Levels of education and skills of the workforce are amongst

the key variables that determine the ability of the poor to integrate into and benefit

from the growth process.95

Indira Hirway and Piet Terhal stressed that these rural employment

programmes must be transformed into a modern instrument of general

development policy, as they have tremendous potential to alleviate poverty. To

achieve this, the single most important factor, as the authors argue, is the political

commitment of the government. Secondly, as rural public work programmes are

often based on short-term and ad hoc considerations, a far bolder and long-range

application of these programmes is needed to realize their potential as a strategic

development instrument.

The authors reviewed the case studies outside and within India. The outside

countries case studies were based on secondary data. The positive aspect observed

from the Netherlands case study, namely the productivity of work, contributed to
 92

development of the Netherloands, particularly of its wasteland and agricultural

resources. Regarding Bangladesh, the idea of combining important assets creation

and public investment is extremely valuable in region like East Pakistan, which is

characterized by a seasonal lack of productive employment and lack of productive

rural investment. In this regard, China is successful because of the support

extended by all political leaders to the scheme, which provided long – term basis

instead of prt-time and ad hoe basis.

Based upon field survey and the primary data collected within India, the

impact of the National Rural Employment Programme (NREP) and the Rural

Landless Employment Guarantee Programme (RLEGP) on the beneficiaries is not

very positive. Though the programmes are more or less targeted, their size has

been too small to make any significant positive impart on the situation of the poor.

In India, the additional income earned by the beneficiary household was not

sufficient to create any substantive and permanent impact. From this, it clear that

assets created was only tenuously linked with the logic underlying the

programme. Similarly, in the absence of adequate attention to the end, use of the

assets in the employment generation in the post-construction phase also tends to

be limited.96
 93

After 25 years of pioneering work in the promotion of employment-

intensive infrastructure investment, the International LabourOrganisation (ILO)

has learnt a number of important lessons. The ILO formally recognises the

limitation of short-term employment, arguing that employment in programmes

such as the Employment Intensive Infrastructure Programme (EIIP) may have

only a temporary impact on poverty. ... labour-intensive investment can open

doors for community development and provide a temporary boost to the incomes

of people living in poverty, but sustaining progress requires linked action to

promote longer term employment opportunities, for example in micro and small

enterprises. (ILO, 2003: 44, emphasis added) The ILO also argues that what is

required to address poverty on a sustained basis is social security, which ‘

enhances productivity by providing health care, income security and social

services ’ (ILO, 2001: 2). According to this approach, ‘income security’, the

aspect of social security conferred through the wage, is defined thus: Income

security is about living in a situation in which basic needs, such as food, housing,

health care and education, can be secured in an uninterrupted way. This requires

having both an adequate and regular source of income ... (ILO, 2006: 9) The

implication is that the kind of employment required to contribute to social security

and by inference to deliver sustained social protection benefits, is employment

which offers ‘adequate and regular income’. Hence, the critical determinants of an

effective programme are 1) the matching of PWP payment duration with the
 94

duration of need for income and 2) the provision of an adequate wage. By

addressing these two issues, a programme could potentially confer both transfer

and stabilization benefits, serving a risk insurance function, smoothing

consumption and potentially also enabling the accumulation of assets. This

supports the argument that, by definition, short-term PWP employment does not

provide the regular income flow required in the context of chronic unemployment.

Most PWPs implemented in situations of chronic poverty do not offer the regular

or ongoing support which would be required to meet the ILO income security

objective, or provide stabilization benefits in the medium to long term. Devereux

and Solomon noted the impact of employment duration on expenditure patterns,

and the implications for investment decisions and capital accumulation: Workers

employed for less than one month [spent] their wages entirely on basic

consumption [...] while others who were employed for longer [...] hired labour,

purchased fertilizer and started or expanded small business enterprises. (ILO,

2006: 25).97

The study of National Rural Employment Programme (NREP) in East

Godavari district of Andhra Pradesh found that a substantial proportion of the

beneficiaries were Scheduled Castes and that the female proportion was so low to

receive the benefits that the ratio of male to female employment was 4:1. The

contractors paid the beneficiaries the market wage, which were lower than the

minimum wage and major deficiency in the implementation of the programme

 95

was the non-involvement of the voluntary agencies. A large part of employment

under NREP was just substitution for public sector employment, as the works

were not taken up for execution during the lean periods, and two-thirds of the

employment generated had gone to the poor, showing that the incidence of

poverty declined by four percentage points.98

The generation of employment in the Rural Non Form Sector (RNFS) is

important not only with respect to poverty alleviation, economic growth and rural

development, but is also known to enhance sustainability of use of natural

resources and food security in rural areas.

Analysis and results in this paper are based on unit level data available

from National Sample Surveys (NSS) on employment and unemployment

situation. Data from five quinquennial rounds, viz, 38th (1983), 50th (1993-94),

55th (1999-2000), 61st (2004-05) and the data available at the time of writing

(2012) on employment and unemployment in the 66th round (2009-10) have been

used for analysis of distribution of the rural workers usually employed in the non-

farm sector across employment status. Also, the analysis is restricted only to the

rural workers usually employed, taking into account both principle and subsidiary

statuses. However, the current status and industry of the rural workers has been

taken into consideration, first, to estimate the rural workers in casual public works

under the Mahatma Gandhi National Rural Employment Guarantee Scheme

(MGNREGS), and second, to calculate the average nominal wages and salary
 96

earnings of rural workers in the farm and the non-farm sectors. The primary

objective of the paper is to identify the drivers of RNFS employment.

The participation of rural workers in the non-farm sector has gone up since

1983, though there has been a deceleration of growth in this sector in the most

recent period under consideration. There has however been a boom in casual

employment in the non-farm sector, which has been particularly high for female

workers. This has led to a process of feminization of casual employment in the

non-farm sector. Also, there is adequate evidence to conclude that the last five

years of economic growth have been associated with a shift from self and regular

employment to casual employment among both males and females, both in the

farm and the non-farm sectors. The growth in the non-farm sector has thus come

from expansion of casual employment, mainly in public works, which, in turn,

appears to have been driven by MGNREGS as has also been pointed out earlier.

The analysis points towards the fact that unemployment and other

associated distress factors are converting land-based livelihoods in agriculture and

self-employment and regular employment in the non-agricultural sector into

casual wage based ones both in the farm and the non-farm sectors. Indications that

such outflows have been absorbed so effectively by opportunities provided by the

MGNREGS which provides only manual work lead us to question the quality of

other work available in the RNFS. The deceleration of the non-farm work would

have probably been more acute had it not been for the introduction of the
 97

MGNREGS. The impact of the MGNREGS has been far more significant on

female employment and this observation is supported by the unprecedented

growth of female casual employment in public works both in the farm and the

non-farm sectors between 2004-05 and 2009-10. Thus, there is a great potential

for providing an impetus to female non-farm employment provided that localized

opportunities are available to them. Apart from the scheme, this can only be

supported by a growth of RNFS induced by investments of agricultural surplus.99

2.3. METHODOLOGY

The present study on the role of MGNREGS on poverty eradication has been

undertaken in Tirunelveli district of Tamil Nadu State, covering three administrative-

cum-development blocks among the beneficiaries of the scheme. An attempt has been

made to gauge the poverty eradication in terms of its effect on rural development from

the point of view of beneficiaries. Lacunae of the scheme have been identified and

presented wherever relevant.

A vast amount of empirical evidences were gathered by administering interview

schedules for supporting the study. In addition, case study method was also employed

to get some minute and in-depth details from the beneficiaries about the performance

of the scheme. Data collected from the field were compiled by using Statistical

Package for Social Science (SPSS) and further subjected to statistical analysis.
 98

2.3.1 Selection of the Study Area

Tirunelveli district was selected for the present study. Tirunelveli District

is one of the four districts in Tamil Nadu and among the 130 districts at the

national level in the second phase selected by the Government of India for

implementation of the Mahatma Gandhi National Rural Employment Guarantee

Scheme (MGNREGS). In addition, the district has received ‘Rozgar Jagrookta

Puraskar’ award from the central government in the year 2009 for implementing

this scheme successfully. Hence, the above District was purposefully selected for

the present research.

2.3.2. Sampling Framework

The present study has followed stratified sampling method. In order to get

adequate representation from different sections of the beneficiaries all the

nineteen Development Blocks of Tirunelveli District were first ranked as More

Developed Blocks (MDBs) and Less Developed Blocks (LDBs) based on

Composite Development Indicators (CDIs) constructed by employing four

development indicators viz., area cultivated more than once in a year, rural

literacy rate, non-agricultural workers and households above poverty line to elicit

salient features of differential contributions of Blocks in their development

perspectives in the district. While construction the Composite Development

Indicators (CDIs) each of these development indicators were standardized by

 99

taking its ratios in relation to that of the district and then non-weighted average of

the four standardized were derived for construction Composite Development

Indicators (CDIs (table 2.1). Then, all the nineteen Development Blocks were

ranked in descending order of Composite Development Indicator (CDIs) and

grouped them as blocks having Composite Development Indicator (CDIs) above

0.06 as More Developed Blocks (MDBs) and between 0.01 and 0.05 as Less

Developed Block (LDBs). After grouping the blocks, one block from each group

was selected randomly. Further, the number of Job Cards issued under the Scheme

was employed as a criterion for identifying Gram Panchayats below the level of

Administrative Blocks. After obtaining the list of beneficiaries for each identified

Gram Panchayat as mentioned above, 10 percent from among the beneficiary

households who have received Job Cards before 31st March 2012 were drawn as

sample randomly (table 2.2).

Hence, the present research work covered six hundred and thirteen (613)

beneficiary households located in eight Gram Panchayats under two Development

Blocks in Tirunelveli district.

 100

TABLE 2.1

COMPOSITE DEVELOPMENT INDICATORS (CDIS) OF GRAM

PANCHAYATS IN TIRUNELVELI DISTRICT

Ratio to that of the District

Area Non-
Cultivated Total Agricul- Non-
Sl. more than Households Rural tural
Block weighted Group
No. once in a (Above Literate workers Average
year (area Poverty Rate
in Line)
hectare)
1 Keelapavoor 0.08 0.08 0.08 0.10 0.09
2 Kadayam 0.09 0.07 0.06 0.06 0.07
3 Ambasamudram 0.13 0.03 0.03 0.07 0.07 More
4 Manur 0.07 0.08 0.06 0.04 0.06 Developed
Blocks
5 Alankulam 0.04 0.07 0.08 0.06 0.06
(CDIs
6 Tenkasi 0.09 0.04 0.03 0.09 0.06 above
7 Vasudevanallur 0.11 0.05 0.04 0.03 0.06 0.06)

8 Cheranmahadevi 0.13 0.02 0.02 0.06 0.06

9 Kadayanallur 0.07 0.05 0.04 0.06 0.06
10 Pappakudi 0.08 0.04 0.04 0.04 0.05
11 Radhapuram 0.00 0.07 0.07 0.06 0.05
12 Sankarankoil 0.00 0.06 0.06 0.07 0.05
Less
13 Valliyoor 0.00 0.05 0.08 0.06 0.05 Developed
14 Shencottai 0.07 0.02 0.05 0.04 0.05 Blocks
(CDIs
15 Palayamkottai 0.03 0.06 0.04 0.03 0.04 between
16 Kuruvikulam 0.00 0.06 0.06 0.04 0.04 0.01 &
0.05)
17 Nanguneri 0.00 0.06 0.07 0.03 0.04
18 Melaneelithanallur 0.00 0.06 0.05 0.03 0.04
19 Kalakadu 0.02 0.03 0.04 0.03 0.03
Source: Computed based on the data available in the G-Return 2010, Tirunelveli
District, Tamil Nadu.
 101

TABLE 2.2
LOCATION OF SAMPLE GRAM PANCHAYATS AND SAMPLING
FRAMEWORK

Beneficiaries
Group Sample Gram
DISTRICT

Panchayats (10% of the total

(Employing Sample
Block beneficiary
four Blocks (Selected based on Job
households from
Development Card Issued upto 31st
each Gram
Indicators*) March 2012)
Panchayad)
Keelapavoor Highest Two
Kadayam (1) Moolachi 67

CHERANMAHADEVI
Ambasamudram (2) Pudukudi 65
More
Developed Manur Least Two
Blocks Alankulam (1) T.Ariyanayagipuram 24
(CDIs above Tenkasi (2) Venkatarengapuram 25
0.06)
Vasudevanallur
Cheranmahadevi Sub Total (1) 181
TIRUNELVELI

Kadayanallur
Pappakudi Highest Two
Radhapuram (1) Karivalamvandanallur 192
Sankarankoil (2) Kalappakulam 191
SANKARANKOIL

Less Valliyoor Least Two

Developed
Blocks Shencottai (1) Poigai 21
(CDIs Palayamkottai (2) Punnaivanam 28
between 0.01
& 0.05) Kuruvikulam
Nanguneri
Sub Total (2) 432
Melaneelithanallur
Kalakadu
Grand Total (1+2) 2 Blocks 8 Gram Panchayats 613 Households
* Four Development Indicators deployed are: Area cultivated more than once,
Total households Above Poverty Line, Rural Literate, Non agricultural workers.
 102

2.3.3. Sources of Data

The present work being an empirical based research, both primary and

secondary data were gathered and analyzed for drawing inferences and reporting

research results.

2.3.4 Methods of Data Collection

The study employed a combination of methods, such as field survey,

employing a pre-tested interview schedule, interviews with key informants and

review of secondary sources of data.

2.3.5 Primary data

The primary data were gathered from beneficiaries by contacting them at

the worksites of the scheme and at their residences through personal interview.

This was collected during the period between August 2012 and November 2012

on whole time basis. The data were collected by administering a pre-tested

interview schedule.

2.3.6 Secondary data

Besides the primary data, secondary sources covering aspects relating to

performance of MGNREGS, quantum of employment generated, works

undertaken and financial position at National, State, District and Sample Blocks

level were included. For the collection of information and data on the above

mentioned specific aspects, numerous documents were perused and official

records such as published and unpublished reports obtained through various

 103

sources such as Ministry of Rural Development, Office of the Assistant Director

of Statistics, Tirunelveli District, District Rural Development Agency, Block

Development Offices situated at Cheranmahadevi and Sankarankovil block and

Gram Panchayat Offices at Moolachi, Pudukudi, T.Ariyanayagipuram,

Venkatarengapuram, Karivalamvandanallur, Kalappakulam, Poigai and

Punnaivanam. The study also utilized materials and information from various

libraries sourced from different institutions both within and outside Tamil Nadu

State.

2.3.7 Period of Study

The study covers a period of six financial years between 2006-07 and 2011-12.

2.3.8 Tools of Analysis

In order to analyse the extent of inequality in the distribution of per capita

income of MGNREGA workers in the study area, correlation, multiple regression

analysis, Lorenz Curve, Gini co-efficient, variance of logarithms and disparity

ratio were used in the present study.

Lorenz Curve

Lorenz curve was used to study the inequality in the distribution of per

capita income. The curve fell entirely within unit square and the curve hung below

the diagonal joining (0, 0) and (1,1) when there was perfect equality the curve
 104

coincided with the diagonal. If the curve was further away from the diagonal then

it shows a greater inequality.

Gini Co-efficient

The following formula was computed for measuring Gini co-efficient.

1 2
G = 1 + ------- - -------- ( ny1 + (n-1) y2 ……. + 2yn-1 + yn-1 + yn) --- (2)
n n2 y
where
G - Gini co-efficient
n - number of individuals
Yi - Income of individual rank i ( y1 <= y2 <. . yn-1<= yn )
Y - mean income

Variance of Logarithms

To test the Gini co-efficient the variance of logarithms was used, the

following formula was employed for calculating the variance of logarithms.

1 N _
--- ! log (Zi/Z)2
N i=1
where
Zi - Per capita income of ith individual
Z - Mean income of all the individuals.
N – Total sample size.
 105

To test the difference , the following F- test has been used.

"12
F = ---------- --------------------------(4.3)
"22
where
"12 - variance of before MGNREGA,

"22 - variance of after MGNREGA,

Disparity Ratio

To find out the extent of inequality, disparity ratio was also used in the

present study. It is the ratio between the mean value of per capita income of the

top and bottom decile groups. It has been used as a measure of concentration.

Symbolically,

I = M10 / M1……………….(4.4)
where
I = Disparity Ratio
M10= Mean value of per capita income of tenth decile group
M1 = Mean value of per capita income of the first decile group
The minimum value of this measure was unity implying perfect inequality,

larger deviations from unity implied greater inequality and vice versa.

In order to determine the volume of savings of the sample household of

before and after MGNREGA, the following form of multiple log-linear regression

model was estimated.

Log Y = #0 + #1 log X1 + #2 log X2 + #3 log X3 + #4 log X4 + #5 log X5 + u

 106

where
Y = Volume of savings in rupees per annum,
X1 = Annual family income (in Rs.),
X2 = Asset value (in Rs.),
X3 = Educational status,
X4 = Family size (in number),
X5 = Number of earners (in number) and
U = Disturbance term.
The above Model was estimated by the method of least squares.

In order to examine the relationship between the level of awareness and the

socio-economic variables of the respondents, the Chi-square test has been used by

adopting the following formula.

(O $ E ) 2
Chi-square = ! with (r-1) (c-1) degree of freedom
E

where O – observed frequency

E – Expected frequency

Row total x Column total

E=
Grand total

c = Number of columns in a contingency table

r = Number of rows in a contingency table.

 107

2.4. CONCEPTS

The various concepts used in the study are given below. Since these terms

can be variously defined and understood, it becomes necessary to define them in

their present use.

2.4.1. Household

A “household” is a group of persons who commonly live together and take

their meals from a common kitchen, unless the exigencies of work prevent any of

them from doing so. A household may comprise of persons related with blood or a

household of unrelated persons or having a mix of both.

2.4.2. Household Income

Household income represents the sum of the earnings of all the earning

members of the household from all sources during the reference period under

study. The various sources of income are identified as follows:

(i) Income from Employment

Wages received from work which the respondents are performing are

included here. Both the cash receipts and the receipts in kind, such as grains,

meals, clothing and the like are also included. Computed money value equivalents

of the receipts in kind were calculated and added on to the cash receipts to arrive

at the wage income of the households.

 108

(ii) Income from Livestock

Income form livestock includes the sum received from the sale of milk and

milk products, poultry and its products, sale of sheep, pig, goats and also by the

way of sale of manure.

(iii) Farm Income

Farm income refers to the sum of receipts from the sale of the crop output

and the by-products and the value of products retained for self consumption

computed at the sale price.

(iv) Income from Garden Produce

The income from garden produce is calculated in the same manner as that

of the farm income.

(v) Other sources of Income

Other sources of income include hiring out animals, carts and implements,

remittances, small business receipts, interest receipts, deposits drawn from banks,

borrowings, etc.

2.4.3. Beneficiaries

Beneficiaries are those who were given unskilled work under Mahatma

Gandhi National Rural Employment Guarantee Scheme from the period of

2011-12 in Tirunelveli District.

 109

2.4.4. Poverty

Poverty is multi-dimensional in character and it manifests itself in a variety

of socio-economic characteristics. Since poverty is a complex phenomenon, it

cannot be reduced to a single definition, applicable to all societies and for all

times. It has to be defined in relation to the average living standards in a society

and the social norms and customs acceptable to it at that point of time. For

example, some people would be delighted to live a bit below the U.S. poverty line

and would consider themselves quite prosperous. Similarly, the standard of living

of what we call now “poor” would probably not have been considered so in

America in 1990’s and certainly not in Europe during the middle ages. Different

times and different places apparently call for different poverty lines.

But for any given society, it is possible to have a definition of absolute

poverty in terms of the basic necessities required for maintaining the physical

health and working capacity of an individual. Even so, an index of poverty is

bound to be based on value judgements about the content of a basic subsistence

level.

Over a period of time various researchers and organizations have attempted

a rigorous value-free definition of an individual’s nutritional requirements

allowing for differences in sex, age, body weight and nature of work. There is

now some consensus on the nutritional requirements of a so called reference man,

 110

woman and child for different age groups, from which it is possible to calculate

the average income for measuring the poverty line.

On the basis of nutritional requirement norms, ‘Poverty Line’ can be

determined in terms of the value of consumption baskets of food that would

provide minimum subsistence for a family as a whole or for each member of the

family separately. The consumption basket would be different for different

regions, different income groups and at different periods of time depending on the

different customs, habits and economic conditions. The value equivalent of such a

consumption basket of household on per capita basis can be considered as a

dividing line or a bench-mark, and those who can earn or spend less than this

value are considered as ‘poor’ and those who can earn or spend more than this

figure as ‘not poor’. This is called critical poverty line.

Poverty line is a term which delineates the poor from the non-poor. When

we say that an individual is in poverty or below the poverty line, we mean that the

person’s standard of living falls below a minimum acceptance level.

2.4.5. Poverty Alleviation

Kirit S. Parikh and Shankar Subramanian revealed that policies for

poverty alleviation may be divided into two. (1) Policies that redistribute income

under the first category; and (2) policies that seek to alleviate poverty by changing

the content of growth: it’s sectoral composition or the choice of technology.

 111

Under re-distribution policies, come direct measures of redistribution, such as

taxes and transfers and other necessities increasing the price of factors that the

poor are relatively well-endowed with, namely, unskilled lablourer and increasing

the demand for such labour through employment programmes. Of course, this

division is by no means water tight, promotion of growth may also redistribute

income, perhaps even worsen the condition of the poor and redistributive

measures may affect growth in anything but the short run.100

Department of Evaluation and Applied Research observed that, because

of poverty alleviation programmes, the Work Participation Rate (WPR) i.e., the

proportion of workers to total population in Tamil Nadu had increased for 41.7

percent in 1981 to 43.3 percent in 1991. Between 1981 and 1991, the WPR for

rural areas had increased form 46.48 percent to 48.49 percent. The female WPR

had been substantially higher (29.9 percent) than that of several states.101
 112

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