MacroScan - Social Inclusion in the NREGS

The NREGS is a particularly important strategy in the current economic context of global economic crisis and national economic slowdown, when raising aggregate demand is a major task for the government. Fiscal policy that provides more wage income directly to unskilled workers and in rural areas is likely to be much more effective in increasing aggregate incomes than other forms of public spending, because of the higher value of the multiplier in such expenditure.

So this ''inclusive'' form of public spending is not only desirable from a social or welfare perspective - it also provides very direct economic benefits because it is much more effective in dealing with the economic situation of credit crunch and aggregate demand slowdown. Because wage employment schemes tend to be self-targeting in terms of increasing the incomes of those who are most likely to spend their income rather than save it, they necessarily imply a higher multiplier effects that make the public expenditure more effective in reviving output and indirect employment. Therefore the NREGS is about more than equity; it is also a macroeconomic weapon against slump, and this is at least partly so because it does generate more equity.

In addition, what is especially attractive about the scheme if it is properly implemented, in addition to direct employment and output effects, is the potential it has to increase both labour productivity and the quality of life in rural areas.

It is also increasingly recognised that the NREGS has the potential to transform rural economic and social relations at many levels. It is this capacity to engender change that is at once a source of strength and a weakness for the implementation of the programme. This is because it unleashes forces in the rural economy, society and polity which necessarily threaten the status quo and therefore also those who benefit from it, and so it is precisely where it is most needed that there is likely to be the most resistance to effective implementation. In fact, the huge potential of the NREGS has already been evident particularly in the enthusiastic response of local people, landless and marginal farmers and women workers in particular, wherever information about the programme has been properly disseminated.

But there is also no doubt that this enormous potential is still incipient and requires to be substantially supported in many different ways. This is because the way that the NREGA has been framed, and the desired mode of implementation, amount to no less than asking for a social and political revolution. The programme reverses the way the Indian state has traditionally dealt with the citizenry, and envisages a complete change in the manner of interaction of the state, the local power elites and the local working classes in rural India. The NREGS is therefore completely different in conception from earlier government employment schemes since it treats employment as a right and the programme is intended to be demand-driven. Furthermore, the Act and Guidelines anticipate very substantial participation of the local people in the planning and monitoring of the specific schemes, to a degree which has not been at all common.

Obviously, all this will take time to permeate down to the local levels. So to start with, it is only to be expected that there will be an uneven record of implementation as well as the presence of a large number of problems that require correction. There are bound to be difficulties and time lags in making local officials and others responsive to this very different approach. And of course, the NREGS necessarily challenges the prevailing power structures, in some cases quite substantially. Therefore attempts to oppose or subvert the correct and full implementation of the scheme in rural areas are only to be expected.

Even so, the extent to which the scheme is being implemented with even partial success in many parts of the country, including some very backward pockets, is already a source of optimism.

The NREGS is necessarily ''inclusive'' at the most basic level in economic terms, because it self-targets those who are willing to engage in arduous physical work for a daily wage, in other words the poorest sections of society. But it is also emerging that the NREGS tends to be more socially inclusive as well, that is that it disproportionately involves women, SCs and STs as workers in the scheme. This was not entirely expected when the law was framed. In fact, it was deemed necessary to ensure a minimum reservation of 30 per cent of the jobs for women. And fears were expressed that the more marginalised social groups would also be excluded from the benefits of wage employment through this scheme.

Table 1 describes the participation of women in the NREGS thus far, and compares it to the rural work force participation of women by state as well as for all-India (in terms of share of all workers, both principal and subsidiary status). The share of rural workforce data relate to 2004-05; the share of NREGS work relates to all work from inception until November 2008. Of course it should be noted that the official data on women's work participation excludes the unpaid work especially in social reproduction, which most women are necessarily involved in and which is largely unrecognised and unrecorded. But as far as recognised economic activity goes, it is clear from Table 1 that for India as a whole, women are participating in NREGS much more actively than they participated in all forms of recorded work.

For India as a whole, women workers account for nearly half the work days in NREGS so far, while they accounted for only 36 per cent of all rural workers in 2004-05. This amounts to a difference of more than one-third. But this varies widely across states, and the pattern of state-wise variations is extremely interesting. Women's involvement is much higher than their overall work participation in the southern states, and especially in Kerala, where women's participation in paid work has traditionally been low. Tamil Nadu, which has had high women's work participation, shows even higher involvement in the NREGS, with women accounting for nearly 80 per cent of the work under this scheme.
Table 1 >>

Among the northern and eastern states, however, thus far the pattern has been generally different, with proportionately fewer women working in the NREGS than in other rural work. These gaps are especially marked in Punjab, Uttaranchal and Jammu and Kashmir. The outlier in the north is Rajasthan, where well above two-thirds of the work days have been by women, which is more than fifty per cent higher than women's share of all rural workers. In several states women's participation is not only lower than their share of total workers, but is also well below the mandated 30 per cent. This needs to be investigated further, and corrective actions will be required.

Where the NREGS has led to a significant increase in women's paid work, there are likely to be substantial social changes as well. These would be in addition to other changes that have already been noticed during field studies, such as the decline in distress migration and the improvement in food consumption among certain families. Not only does the NREGS provide money incomes directly to those women participating in it, in many states the wage delivery mechanism is linked to the opening of post office or bank accounts. This involves the access of a much greater number of women in institutional finance from which they have been largely excluded. Intra-household gender relations are also likely to be affected, but these changes will occur over a longer time and would require more extensive sociological study to identify. Nonetheless, this greater participation of women in the NREGS, particularly in some states, is clearly a positive indicator that shows the inclusive potential of the programme in unanticipated ways.

Other social groups that tend to be economically marginalised in India include Scheduled Castes and Scheduled Tribes. For these categories as well, there appears to be disproportionate participation in NREGS, relative to their share of population, as indicated in Tables 2 and 3. In the case of SCs, this is not unexpected, because they typically also lack access to land and other property and are disproportionately represented among rural labourers. Even so, the experience thus far suggests that fears of their exclusion from a scheme that provides wage incomes have been largely unfounded, at least according to the official records. Only in Jammu and Kashmir has their participation been significantly lower than their share of population - everywhere else among the major states it has been higher.

For STs, however, the higher rate of participation in the NREGS was not really expected, also because geographical remoteness and the difficulties of topography could be expected to make their access to work sites more difficult and because there is evidence that in many areas they have been generally excluded from government schemes that could add to their money incomes. Therefore, this trend is definitely to be welcomed. It should be noted, however, that one reason for the positive differences emerging in Table 3 could be the choice of districts where the NREGS has been implemented from the inception. Since the initial 200 districts were chosen on the basis of their backwardness, and these tend to be tribal-dominated areas as well in many states, it may not be surprising that tribals have been disproportionately working in NREGS at the aggregate state level.
Table 2 >> Table 3 >>