MGNREGA workers clearing irrigation canal in Kashmir

-Indian Journal of Human Development

MGNREGA workers clearing irrigation canal in Kashmir
The labour market is very dynamic; therefore, changes are inevitable with the entry of a new, or exit of an existing, source of livelihood from it. Examining these changes is important in order to understand the new directions of the labour market. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) entered into the rural labour market as one such new source of livelihood in 2005 and was extended to the entire India by 2008–2009.

The act is a universal Social Protection Programme (SPP), with the aim of providing unemployment security to overcome the livelihood crisis in the rural labour market. As a Public Work Program (PWP) it guarantees 100 days of employment per household in a year. Unlike the earlier and other existing PWPs in the developing world, it is unique in its design and application. It incorporates all the features of Transformative SP framework—it is protective, promotional and transformative (Sabates-Wheeler & Devereux, 2011).1

  • Protective: It primarily aims to protect the income and consumption shortfalls of the rural labour force by entitling them to surrogate unemployment insurance through a legal guarantee of 100 days of work in a financial year (FY) (Subbarao et al., 2013).2 The work is self-selective in nature and is provided at a statutory minimum wage notified for the programme by respective state governments, which in most of the cases is below the existing market wage (Dutta et al., 2014).
  • Promotional: By providing public work, it aims to promote the rural economy through investment in productive assets.
  • Transformative: By providing the public work, it also aims to transform gender relations through reservation for women in the workforce at a wage rate equal to that of men (Malla, 2014MoRD, 2012).

Owing to its universal nature, it covers more than 10 per cent of India’s labour force (MoRD, 2010), and has emerged as the largest publicly financed, and financially inclusive PWP in the developing world (Gupta & Mukhopadyay, 2014Philip, 2010).

Similar to other states of India, MGNREGA was extended to the state (now a union territory) of Jammu and Kashmir (J&K) in 2005 (Malla, 2014). It was received with a lot of hope and optimism because of several reasons. First, unlike most of the other parts of India, J&K is caught in a unique political fragility, where the lives, livelihoods and the freedom of people have been seriously curtailed due to the political interests of various parties (Habibullah, 2009Navlakha, 2007Schaffer, 2005).

The continuing fragility over the last 70 years has left the region with severe livelihood crises and vulnerabilities. The unemployment rate in the region is 3.61 per cent, compared with the 2.19 per cent all-India average, and rural unemployment is 2.5 per cent, compared with all-India rural unemployment of 1.7 per cent (NSS 68th Round). 

Second, the dependence on the informal sector has increased, and the people who are already in the informal sector are getting into severe livelihood vulnerabilities because the growth and contribution of agriculture (the main source of livelihood for the informal sector) are declining (NSS 2011–2012).3 Third, due to conflict disturbances and the poor functioning of the regional administration, the rural infrastructure continues to be at the peripheries of development (Malla, 2014).

The entry of such a type of PWP into the regional labour market is entirely new. Though some residual PWPs were in place earlier, nothing as universal and significant as MGNREGA was there.

Considering the unique nature and local need of the policy, it is important to understand the changes in the labour market after its initiation. Further, equally importantly, a scrutiny of the implementation of the programme in this region and its reach among the intended rural households assumes significance. This article aims to serve this purpose and explore the issues in its implementation.

The remaining part of the article is divided into six sections and subsections: empirical work on MGNREGA, methodology, household distribution, targeting outcomes, labour market outcomes and concluding remarks and a way forward.