The digging-holes myth

The view of MGNREGA as a makeshift work programme is far off the mark.

Written by Jean Dreze | Updated: July 1, 2015 3:40 pm
mgnrega, nrega union budget, Mahatma Gandhi National Rural Employment Guarantee, MGNREGS, MGNREGA issue, MGNREGA, farmer suicide, farmers suicides, Indian express, Indian express news, express news, indian express, NREGA, NREGA labourers, IE column, Indian Express column Recent research suggests that the Centre has a misguided view of how MGNREGA works can be made more productive.

Few social programmes in India are more resented by the corporate sector than the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This is easy to understand, considering that one of the primary aims of the MGNREGA is to empower workers and reduce their dependence on private employers. Naturally, employers see this as a threat to the availability of cheap and docile labour. This resentment tends to generate a steady stream of criticism. Going by these reports, one would think that public works initiated under the MGNREGA are wholly useless. As a recent editorial put it, “…in most places across the country, this [MGNREGA] meant digging up trenches for no purpose whatsoever and then filling them up”. No evidence was provided for this sweeping statement.

During the last few years, I have seen hundreds of MGNREGA works, and I do not remember a single case that resembled digging trenches and filling them up. Sure, I have seen some useless MGNREGA works (like a pond being built at the top of a hill in Sonbhadra district, Uttar Pradesh), but I have also seen many useful ones. Given the lack of careful studies on the productive value of MGNREGA works, the larger picture is not very clear. But some recent studies suggest that the view of MGNREGA as a makeshift work programme is far off the mark.

Among them is a pioneering study by Sudha Narayanan and her colleagues at the Indira Gandhi Institute of Development Research, who examined 4,100 MGNREGA assets scattered over 100 villages of Maharashtra. Among the sample works, 87 per cent were functional and 75 per cent contributed directly or indirectly to better agriculture. An overwhelming majority (90 per cent) of the users of these MGNREGA works considered them “very useful” or “somewhat useful”. As the principal author notes, MGNREGA workers in Maharashtra have “replaced scrublands with forests, built earthen structures for impounding water and preventing soil erosion, cleared lands and levelled them to make them cultivable”, among other activities (available at arcg.is/1QYdt8y). This is hardly “playing with mud”, to quote another colourful description of MGNREGA work from the mainstream media.

While the Maharashtra study focuses mainly on people’s perceptions, another recent study (by Anjor Bhaskar and Pankaj Yadav at the Institute for Human Development) looks at the objective measures of economic returns on MGNREGA works in Jharkhand. This study inspected nearly 1,000 randomly selected dug wells constructed under the MGNREGA in the last few years. Interestingly, the proportion of completed wells in the sample (70 to 80 per cent depending on whether one insists on the construction of a parapet) was not too different from official estimates for the same gram panchayats. Further, most of the completed structures were very well used, especially to grow vegetables and other high-value crops, but also to bathe, water domestic animals and even grow fish, among other possible uses. Looking just at the impact on agricultural productivity, the authors estimate (from a sub-sample of about 100 randomly selected wells) that MGNREGA wells have a financial rate of return of 6 per cent or so in real terms. This is a very respectable rate of return, on par with many industrial projects. And please note, this estimate focuses on plain financial returns, not social rates of return — the latter would be higher, if only because the social opportunity cost of a day’s labour is typically lower than the MGNREGA wage. Despite considerable hassle at the construction stage, sometimes even leading them to sell some property, almost all well-owners were glad that they had built a well.

The study also sheds some useful light on the reasons for non-completion of a significant minority of MGNREGA wells in Jharkhand. In some cases, technical problems (for example, stony ground) were to blame, but more often, the well had collapsed during the monsoon because of delays in the reimbursement of material expenses. From these and other lessons, there are possibilities of ensuring even more productive projects in the future.

The findings cited are consistent with those of other recent studies in the same vein, notably by the Indian Institute of Science, the International Water Management Institute and the University of Allahabad. More evidence is certainly needed to form a clear view of the
productive value of MGNREGA works in general, but as things stand, there is no reason for despondency.

Finally, recent research suggests that the Central government has a misguided view of how MGNREGA works can be made more productive. The basic assumption tends to be that the best way to enhance the productivity of MGNREGA works is to raise the material-labour ratio. In fact, there is no evidence that material-intensive works (for instance, building pucca structures) are generally more productive than labour-intensive works (for example, land-levelling or contour-bunding). Most states today have an average material-labour ratio below the stipulated maximum of 40:60, and there is no obvious reason why this upper limit should be raised. A more effective step would be to improve technical support and supervision for all MGNREGA works, irrespective of the material-labour ratio. This would also be a good opportunity to enhance the skill-building role of the MGNREGA.

It is often said that the MGNREGA should be reoriented towards skill formation instead of casual labour. This overlooks the fact that the MGNREGA is already one the largest skill-building programmes of the Central government. Lakhs of women and men are learning technical, administrative and social skills as gram rozgar sevaks, programme officers, worksite mates, barefoot engineers, data entry operators and social auditors under the programme. Since MGNREGA functionaries are mainly contractual workers, many of them eventually move on and make use of these skills in the private sector. Building up these skill-formation activities as an integral component of the MGNREGA would be an excellent way of taking the entire programme forward, instead of planning for its quiet burial.

The writer is visiting professor, department of economics, Ranchi University.

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  1. P
    Prapur
    Jul 1, 2015 at 10:42 pm
    If the program was so good according to authur statistics than benefits reached to poor right? Now was this program corruption free, because even ex PM Rajiv had said only 10 or 15 paisa per Ruppe reached to actual beneficiaries of all government social scheme. How come scam ridden congress improve so much so fast in one program and looted billions from 2G, CWG, Coalgate, railway posting gate & so many?
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    1. S
      sachi
      Jul 1, 2015 at 3:35 pm
      I had worked as a head of various projects for state and Indian government. I had worked with women and children belonging to very-very marginalized groups. During my tenure, I had observed and noticed that a large number of women and children stopped migrating with male members in search of livelihood due to MGNREGA scheme from rural areas . The buoyant matter is that the children especially girls of marginalized communities were able to attend school regularly. The women started developing interests in social, political and religious activities also. The MNAREGA helped to boost up the confidence of women belonging to deprived groups and they were able to raise their voice in the local governance. The procedures like opening bank account, receiving knowledge on wage rules of MGNREGA , agitation for the equal and fair wedges, etc. have boosted up empowerment process of women and helped to establish their ideny in their communities as well as in their village. There are some irregularities also. For that , the supervision and monitoring system needs to be made more intensive and effective.
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        Abhishek yadav
        Jul 1, 2015 at 10:36 pm
        given the fact you are one of person who drafted this thing initially, therfore there are more chances of you being biased in its favour.
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          Akshay Kashyap
          Jul 1, 2015 at 7:16 am
          Having worked with the government in one of the district, there is nothing said in this article that I can't agree with. To take it further, I recently visited one of the districts in West Bengal which has done brilliant work in sanitation with help of MGNREGS. Same convergence literally stalled the sanitation schemes in jharkhand. In fact the workers trained as masons as well as junior engineers and other MGNREGS staff were critical in this success. I wonder why the government fails to see value in one of the first most empowering provisions.
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            A. Waraich
            Jul 1, 2015 at 11:55 am
            Here comes the great UPA Economist explaining and covering up the failures of MGNREGA. From about 6,50,000 villages in India, the study that you are quoting is based on 100 villages that too in one state. The sample size is very small and biased to explain the overall situation in India. Its very easy to formulate studies and so called research papers sitting in air-conditioned research insutes. But to feel the plight of farmers and what happens at the gr root level is incomprehensible and beyond the purview of a 4 page research paper. It is very much true that people dig trenches only to fill them up. The poor people for whom this scheme was insuted are getting no addition to their productivity and skills in any real terms. the 1 per cent of GDP which is being spent here could be well directed to education and health sectors to improve their efficiency. I ,being a resident of a village, have seen the dirty nexus between the sarpanch and his men who manite poor people, make them DIG TRENCHES for half day and pay half wages and eat away the rest. And the same structure of making the sarpanchs millionaires goes about in every neighbouring village. Will free cash transfers in the form of MGNREGA improve the productivity of economy? Never.
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            1. C
              Chalapati rao
              Jul 1, 2015 at 8:31 am
              I am sorry Gentlemen; I really can’t see usefulness of this scheme. MGNREGA is the curse for Indian Agriculture. Government is converting hardworking people into Lazy people for almost 150 days in a year. Please calculate productivity of these works. Please calculate waste of precious HR hours, which otherwise should have been used. I am a converted agriculturist from IT sector. Having worked for 22 years in IT sector, I ventured into Agri sector since 2007. For last 12 years, we have been facing sever workers shortage thereby it is killing my enthusiasm for agriculture. I agree MNREGS works are very good for photoshots. Please see hidden repercussions for Agriculture. Small land holders are finding very difficult to get workers for their work, hence they are leaving their fields vacant for almost half year. I would like to quote one real incident here. I met a family of 7 people in railway station. In the conversation, I came to know that they gave their 10 acre land on lease to somebody and they are going to Chennai for work. They say each of them earn almost Rs. 700/- per day, which means Rs. 5000/-per day, Rs. 1,50,000 per month. This scenario is replicated in almost every village (by land holders as well as landless people). This is one example how industrialization is affecting our agriculture? If someone wants to do an in-dept study of this scheme, Please go to villages and spend at least a year with farmers and workers. Then one can see how this scheme is killing our agriculture. What farmers/workers want is village road connectivity, water canals, better agri inputs ec. With road connectivity, workers are able to move around 360 degrees upto span of 50KM, thereby getting work for w year. With abundant water, farmers are ready to give work for 365 days. This means there is no paucity of work for workers. Our Industrialization is also providing ample opportunities for workers. I agree there might be some hill areas where people won’t have enough work. These people certainly need some mechanism. Yes, workers certainly need proper insurance facility, health facilities, education facilities which is the government’s duty to provide. If government wants to provide some financial succor to workers, they should do it in terms of festival bonus etc, but not lazy way. If we won’t wakeup, we will certainly end up importing all our food items like rice,wheat, cereals etc shortly.
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                P C
                Nov 24, 2015 at 9:28 am
                The author has given all the references on the basis of which he is presenting the arguments. It's at least expected that you go through the same references, check the veracity of his claims before resorting to mud slinging at Jean Dreze.
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                1. D
                  DA
                  Jul 1, 2015 at 4:42 pm
                  I know Mr. Dreze means well - but isn't he guilty of the same obfuscation and sweeping comments that he accuses his ideological adversaries of indulging in? Not ONE number or statistic is cited in this entire article to support the claims that have been made. Survey results such as useful and very useful are completely meaningless. Built a hooch shop, for instance, and most patron's would rate is indispensable. Means nothing. There is absolutely no build in metric to measure success, the value of that economic output, and if the ets created proved sustainable. And, what of corruption? I personally know of rich farmer's swindling the government - getting farm labour to work in their private farm at tax payers' expense. Not acknowledging such well known weakness erode's Mr. Dreze's credibility further. Let's just accept that this is a programme necessary for otherwise completely unemployable people, and get on with life. Even if they create useless ets, the inefficiency and waste can be accepted as the cost of restoring to people the dignity of labour and earned wages, rather than dependence on public charity. But that number of people has to be a small fraction of the potion - not the majority of it!
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                    Gopal
                    Jul 1, 2015 at 3:17 am
                    I have met those who have examined MGNREGA in UP and Bihar. To call it a disaster is an understatement. It is a fountain head of corruption and waste. Programs like this have no history of success in the world, much less in a country like India where the state is weak and incapable of delivering services. Why do we have politicized foreign scholars recommending programs that would never be accepted in their home countries?
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                    1. G
                      Gopikanta Ghosh
                      Jul 2, 2015 at 10:26 am
                      Unless it helps corporates present administration may not bother. Who bothers for poor?
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                      1. H
                        hinduWoman
                        Jul 1, 2015 at 1:56 pm
                        Finally the author claims that corporate sector is unhappy that MGNREA is depriving it of cheap and docile labor. In all truth, there are not enough industries to accommodate our "cheap and docile" labor, with or without MGNREA. Secondly to claim this we need to compare villages where MGNREA is implemented with industrial towns and cities where industries are "exploiting cheap and docile" labor. Somehow, in-spite of MGNREA, the village poor are migrating to big cities in search of "rozi-roti". If we care to take a global look, some nations that sided with "industries exploiting cheap and docile labor" seem to offer better wages to their "docile" labor than MGNREA.
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                        1. H
                          hinduWoman
                          Jul 1, 2015 at 1:40 pm
                          Though I could not go through The study by Anjor Bhaskar et al (It is not available on the internet perhaps), I went through Sudha Narayan's study (available on igidr site) to know the truth is Author's claim. The report merely surveys 7.3% of total work under MGNREA, that too in the blocks where it is "best implemented". The report does not do any cost-benefit analysis (claiming it to be too complex) and resorts to "subjective perception" and physical verification of the ets. One wonders how this study could be used as an evidence that MGNREA is successful? Sample size is hopelessly small (Merely 7.3 %) and that to chosen from "best implementation". No cost-benefit analysis and it is not sure if same ets could not have been created at lower cost. If we spend 100 Rs. and get ets worth 7 Rs., and show these ets as "success" of the scheme. we are merely deluding ourselves. Finally "subjective perception" is rather too weak a method to go by. If I don't have to spend, any improvement, however marginal, will p "subjective verification" test (If road conditions of my city improve without my paying any taxes, why would I not welcome it?). This report merely states that some ets have been created and are being used. Even a most inefficient scheme would do that much. It is ridiculous to claim this a "success" of the scheme.
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                          1. I
                            indian
                            Jul 1, 2015 at 8:57 am
                            1. If we were to consider corruption as an determinant for the implementation of every govt programme, no programme would ever be implemented. 2. It is ridiculous to state that MNREGA has led to shortage of farm labour - MNREGA is only for 150 days; the same labour would be willing to work for the rest of the year on farm lands. The farm owners need to learn to pay decent wages - whats wrong in improving the negotiating power of labour ? 3. The agri sector certainly needs major reforms - however, MNREGA is neither a cause for its woes nor its discontinuation, a solution.
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                            1. J
                              jstmessin
                              Jul 4, 2015 at 11:32 am
                              Ask the workers who benefited from it.Corruption is everywhere,dont be delusional.Who said it is not good work?
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                              1. J
                                jstmessin
                                Jul 4, 2015 at 11:40 am
                                Tell me which program succeeds in UP and Bihar? Not judging but it would make for an interesting study.
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                                1. K
                                  K M
                                  Jul 1, 2015 at 4:38 am
                                  Given the work culture, widely prevalent corruption in the society, it is difficult to believe the claims of good work done under this dig and fill scheme. This is sheer waste of money. It is even better to directly transfer money to the accounts of the beneficiaries even if they are not asked to do work as atleast intended money will goto the right hands without leakages.
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                                  1. K
                                    kapyS
                                    Jul 1, 2015 at 4:40 am
                                    The author is and Indian citizen
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                                    1. m
                                      my25pasise
                                      Jul 1, 2015 at 10:25 pm
                                      It would seem to suggest that the people from rural india should not dream big & continue to subsist on government handouts for generations on end. NREGA & other programs have made the honest & working people dole seekers , lazy & drunks. Look @ Utrranchal & you will realise the folly of doles & alcohol that services provide to their retired ex-servicemen.
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                                      1. R
                                        Ramesh Nittoor
                                        Jul 1, 2015 at 5:46 am
                                        DBT via AADHAR for old or infirm is ok, not for working age poor. It not only causes bad work ethics, creates lifetime consuency for dependency. The skilling component Jean Dreze speaks about through work is good karma, it creates a sound basis for social change and transfer of poce away from agricultural. Tackling corruption requires political will, it can be contained.
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                                        1. R
                                          Ramesh Nittoor
                                          Jul 1, 2015 at 4:33 am
                                          There is a sound theoretical framework for justifying MNGREGA. Implementation hurdles require better delivery process design, not avoiding such scheme. Realize that current NITI Aayog chief and his Guru think otherwise, but hopefully the review of this scheme will be done with no pre-conceived notions and such non-market inclusive growth mechanism be strengthened.
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                                          1. R
                                            Ramesh Nittoor
                                            Jul 1, 2015 at 4:08 am
                                            Though it began as a diatribe against Corporate sector, it makes a strong case for continuation of the MGNREGA. Bureaucrats and politicians, those with intent to make hay, may have diluted the audit mechanisms and avoided accountability via visibility of work done. But these can be corrected to reduce corruption and undertake productive work. AADHAR, it has already been stated can make a difference here. The importance of skilling rural work force, emergence of social ideny change via access to information and as meeting ground of new people, can not be understated. If the investment payoff is even half at 3 percent, the scheme should be considered a genuine success, specially if the roll-register access can be used to facilitate access to NGOs and other government welfare and atudnal information dissimination schemes.
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