Saving people's livelihoods

  • Blog Post Date 28 October, 2014
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Sudha Narayanan

Indira Gandhi Institute of Development Research

The new government is seeking to alter the essence of MNREGA based on the premise that it is not useful in its current form. In this article, Sudha Narayanan criticises the move and argues that despite its shortcomings, MNREGA is the best available institutional mechanism to preserve the resource base for food production and build resilience of Indian agriculture.

Recent pronouncements of the new government make it clear that it is seeking to alter the essential character of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). Among these prescriptions are that 60% of the works in each district should be devoted to agriculture and that a greater share of the cost of a work be devoted to material. This was followed by an explicit intent to restrict the MNREGA to a few “needy” areas. These are based on an ill-founded premise that the MNREGA is neither useful nor relevant in its current form. They ignore the growing evidence on the usefulness of MNREGA works where the Act has been implemented well.

Agriculture-related works under MNREGA

Already, well over 60% of the works have been supportive of agriculture. For example, a study of over 4,100 MNREGA assets across 100 villages in 20 districts in Maharashtra indicate that 87% of the works exist and function and over 75% of them are directly or indirectly related to agriculture. A bulk of the rest constitutes rural roads that connect habitations to farms and provides access to agricultural markets. The study also finds that 92% of the randomly selected users report that their main occupation is farming; half of them are small and marginal farmers, owning less than 1.6 hectares of land. An overwhelming 90% of respondents considered the works very useful or somewhat useful; only 8% felt the works were useless.

Asset creation

Contrary to the notion that people are paid for simply standing around in work sites or that the MNREGA merely involves some digging, workers have built roads to farms and fields where there were none. They have replaced scrublands with forests, built earthen structures for impounding water and preventing soil erosion, cleared lands and levelled them to make them cultivable. An Indian Institute of Science study of over 2,000 households in 40 villages in Andhra Pradesh, Rajasthan, Madhya Pradesh and Karnataka documents clear benefits in terms of reduced soil erosion, increased water availability, groundwater recharge and biomass. A series of studies by Tata-International Water Management Institute (IWMI) of the best examples of 140 MNREGA assets in 75 villages in Bihar, Gujarat, Kerala and Rajasthan suggests that for a majority of assets the recovery of investment happens within just one year of the completion of works. They found too that additional water availability led to savings in diesel costs.

There are also perceptible income gains to the users of these assets. An independent study of Jharkhand’s wells estimates an Internal Rate of Return of 2.29-4.09%. The study in Maharashtra documented self-reported benefits of Rs. 3 for every rupee spent on horticultural works within just three years of completion. All of these bear little relation to the relative costs of material and labour. Farmers consistently viewed water conservation and harvesting works as enabling diversification of crop production for the market and for enabling them to maintain livestock, expand area under cultivation and area under irrigation. Farmers report that the planting of nitrogen-fixing trees such as ‘gliricidia sepium’ under the MNREGA has rejuvenated soil health.

Furthermore, a majority of MNREGA works are well maintained by their users if not by local authorities. The Maharashtra study indicates that the MNREGA roads were all-weather roads and were used regularly throughout the year. Afforestation works surveyed indicate that six out of 10 trees planted survived, which compares favourably with many afforestation projects worldwide.

Admittedly there are several problems with the MNREGA. While the best examples of MNREGA assets are very good, the ability of the MNREGA to create durable assets has been variable at best. But to suggest that the MNREGA therefore does not lead to asset creation or that it does not work for agriculture is to confuse the issues.

Strengthening MNREGA

Even with all its shortcomings, the MNREGA is the best institutional mechanism available to cope with two profound challenges India will face in the coming years. The first is to provide and preserve the resource base for food production. With growing urbanisation, vast swathes of productive cultivable land are being converted to non-agricultural uses. That the area under cultivation has remained virtually unchanged over this period is indicative of increasingly marginal lands coming under cultivation. As the frontiers of agriculture expand, there is a deep need to augment the productivity of these marginal lands. The second challenge pertains to building the resilience of Indian agriculture. Conservative estimates suggest medium-term declines of food production of 1.5-5.8% with climate change, with more serious consequences for rainfed regions. It is unlikely that massive irrigation projects reach the scattered nooks occupied by these marginal farms. Farm-level structures that support smallholders hold the key to tackling these twin challenges.

Evidence that a well-implemented MNREGA can play a critical role offers ‘proof of concept’ of what can be achieved. We already have in place a suitable architecture for better implementation of the MNREGA. The time has come to strengthen the programme through improved design of assets, careful selection of works and local involvement in planning. To weaken the programme would be both irrational and short-sighted.

This article first appeared on Live Mint.

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