32
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
NREGS as highly inefficient in transferring
income to the poor. The calculations on
expenditure incurred under the Scheme
showed that 30 per cent of the expenditure
was incurred onmaterials and 70 per cent on
wages. Looking at minimum wages of
`
130
and overall expenditure of
`
186 including
material had to be incurred to employ one
worker per day. They argued that the work-
ers had other opportunities but at lower
wages from which they shifted to NREGS
work. It is assumed that a net increase of
`
50 per day is achieved when job card hold-
ers cease to do the other work and do work
under NREGS. In effect for an incremental
income of
`
50 in the hands of a person,
the government spends
`
186. After taking
in to account the leakages, government is
estimated to spend five rupees to deliver one
rupee of benefit under the scheme to people
as wages. While the calculations seem to
indicate that NREGS is a highly inefficient
mechanism of providing employment, one
also notices that the value of assets created
and their impact on the ground have not
been considered at all. It has been assumed
that the work done under NREGS does not
produce any other benefits apart from the
increased income for the duration of work
given. The restructuring of Scheme is on
the basis that the work done under NREGS
can be gainfully utilised to create long-term
beneficial impact through focussing on infra-
structure that can add to production and pro-
ductivity such as in irrigation, afforestation,
soil conservation and the like. Applying the
asterisk of efficiency as argued in this article,
perhaps no government-funded projects
can ever be justified. Moreover, where pro-
jects do not create local employment and
eventually do not create tangible benefits
for lack of involvement of people and lack
of consultation with the local villages, the
benefits might seem negligible.
The efficiency of the Scheme has so far
beenmeasured in terms of number of person
days of employment generated, number of
households that were covered and number
of households which could actually benefit
from the 100 days of work during the year
(originally promised in the legislation). As
per the reports available, almost all those
asking for work were provided the same,
though the assurance of 100 days of work
to each household each year has been
observed more in the breach. However, of
the 270 million registrants, only 72 million
demanded work under the Scheme. Even if
‘active workers’ are considered, against 91.5
million persons considered active, less than
80 per cent demandedwork. The reasonwhy
demand for work under the Scheme is low
should be studied. The higher wages prevail-
ing in rural areas is a possible dampener
that limits demand. As observed elsewhere,
more women come forward for work in
many locations as wages of males are higher
in these areas and hence wean away male
labour to lucrative alternative employment.
But this does not explain why allocations are
made to states where the demand might be
very limited and why a larger allocation can-
not be made to other states with potentially
higher demand for work.
The comfort in reporting that more than
99 per cent of households that demanded
work (Figure 3.2) had been provided work
is false and diverts attention from changes
needed to improve the Scheme. Why only
a limited number of households demand
employment is a critical question. The
falling rates of employment provision to
households in terms of person days also
points to problems of adequacy in work
generation. Social audits in several blocks
Figure 3.2:
Per cent of households given jobs
Source:
NREGS MIS sourced from MoRD website.
2006
–07
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
2012
–13
98.0%
98.50%
99.0%
99.50%
99.18%
98.78%
99.11%
99.37%
98.55%
99.05%
99.06%
