Madhusudan Bhattarai

Has Profitability of Foodgrain Production Declined After Implementation of MGNREGS in India

Whether national rural employment guarantee scheme (MGNREGS) introduced during 2006 has increased the farm wage rate substantially to the point that has reduced farm profitability due to the programme. This is still an unsettled issue in the literature. Hence, in this paper, an attempt has been made to analyse these issues utilising cost of cultivation survey data published by the Commission for Agricultural Costs and Prices. With the data of different states from 2000–01 to 2010–11, the study has covered five different foodgrain crops namely paddy, wheat, jowar, bengal gram (channa) and pigeon peas (red gram) for the analysis. The study does not seem to support the argument that the profitability of foodgrain crops has declined after the introduction of MGNREGS. This is not only true with high area with high productivity (HAHP) states but also with high area with low productivity (HALP) states. However, this study shows that the real cost incurred on account of human labour has increased considerably in all five crops in both High and low productivity states during the MGNREGS period (2006–07 to 2010–11) as compared to preceding years. In fact, real profitability even after subtracting the cost of imputed value of family labour cost used in the cultivation of the crops (cost C2) has either increased or the losses incurred reduced in all five crops in both HAHP and HALP states. The number of years profit realised by the farmers has also increased in most crops during post-MGNREGS period as compared to pre-MGNREGS period (2000–01 to 2005–06). Increased productivity of most of these crops also might have helped to increase the profitability of farmers across the country, even taking account increase in human labour cost during the same period.

Inter-sectoral Linkages and Multipliers of MGNREGA in a Rainfed Village in Karnataka: Applications of Social Accounting Matrix (SAM)

This chapter examines inter-sectoral linkages of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) interventions in a village economy of Karnataka state. This is done using framework of social analysis matrix (SAM) in Markabbinahalli village, a predominantly a rainfed village, of Bijapur District in northern Karnataka. An in-depth survey was done in 2013, SAM of 82 × 82 column and rows (activities) was constructed to analyze direct, indirect and inter-sectoral linkages of village level activities for year of 2012–13, in relation to MGNREGA interventions. The SAM analysis suggests that additional investment of Rs. 1 million by MGNREGA in the studied village increased 1.1% of total income of the village, provided a full employment to 18 households at the rate of 340 days of work per person per household annually at a wage rate of Rs. 300 per day. Major share of the MGNREGA investment went to indirect impact (84%), also known as multiplier effects of the investment. The net impact of MGNREGA on labour income in the studied village was weak due to expenditure to several activities that were produced outside of villages such as machinery uses in construction, skilled labour uses, etc. We suggest that making the programme more demand driven, taking more labour intensive work activities under MGNREGA would also ensure more circulation of MGNREGA expenditures within the local economy, which would produces more employment and income locally due to increased feedback and inter-sectoral linkage (or multiplier) effects.

Economic Impacts of MGNREGA in Dryland Region of India: A Meso and Micro Study in Selected States

This chapter assesses impacts of MGNREGA in selected six states and selected sample households in four districts of Karnataka, covering both macro level and micro scale analysis. We analyze data on whether MGNREGA programme has been successful in providing 100 days of employment per annum to rural poor households, and to what extent the MGNREGA has offered social protection to the rural poor. Likewise, whether increase in agricultural labour wage rate in recent years is due to introduction of MGNREGS. The results indicate that at the macro level, the performance of MGNREGA is not even across the six dryland states selected here, even after a decade of its implementation. Only 7–12% of the households could receive 100 days of employment from MGNREGA in the six states studied. In Karnataka, over 60% of households were provided employment for less than 60 days. It was observed that the benefits obtained are largely at the community level through asset creation that includes desiltation of irrigation tanks, rural connectivity and construction of school buildings. Though MGNREGA works were able to assure sustainable development through improved Natural Resource Management in some regions, it failed in providing social protection where the leadership of implementing agencies was weak and lack of dynamism. Stringent rules and regulations resulted in inordinate delays in executing works and making timely payment of wages to workers. Addressing these issues in the implementation of MGNREGS would enhance its multi-dimensional impacts on rural poor across the India, and ensuring for sustainable development in rural India.

MGNREGS Implementations and the Dynamics of Rural Labour Markets

National economy of India has been growing rapidly in the last two decades; however, growth on employment level has not been commensurate with growth in the national economy. While faster growth of economy is beneficial to various stakeholders, employment growth is more important to reduce poverty in the economy. The experience of welfare programmes in India shows that considerable efforts have been made in terms of effectiveness in their implementations and providing wider coverage to all the needed population. This chapter evaluates differential impact of MGNREGA on the extent of fulfilment of the basic entitlements such as days of employment, wages and earnings and the extent of coverage of social groups like dalits, adivasis and women and vulnerable groups. There is a growing evidence of an increase in agricultural wages across the country over the period between 2006–07 and 2011–12, in which the impact of MGNREGA on the poor community is considerable. This review has also revealed a steep increase in female agriculture wages and a substantive decline in the male–female wage gap over the period. The search for information on the impact of MGNREGA on agricultural labour markets leads to some evidence on labour shortage, changes in wage structures, reduced distress migration, speeding up mechanization process, and peak season adjustment of work or adoption of MGNREGA calendar for its implementation.