NREGS must focus on creating productive assets: CSE study

According to a comprehensive new report by the Centre for Science and Environment, the National Rural Employment Guarantee Scheme must be strengthened and revamped to provide not just wages for work done but work that will make ecological regeneration possible

A comprehensive assessment of the National Rural Employment Guarantee Scheme (NREGS) by the Centre for Science and Environment (CSE), Delhi, says that the scheme has huge potential for regenerating the village economy in India, but only if its focus remains on the creation of productive assets.

The National Rural Employment Guarantee Act (NREGA) was implemented in select districts in the country two years ago, and is slated to cover all districts from April 1, 2008. The CSE study, 'NREGA: Opportunities and Challenges' looks at the Act's implementation across nine states and 12 districts. The objectives of the study were to find out whether the NREGA was being used for productive asset-creation, to gauge the development potential of the Act, and to examine the village planning process crucial to the Act's success.

Over the two years that it has been in existence, the NREGS has already created half-a-million assets and provided jobs to around 3% of India's population, according to the study.

More than 10,000 villages are implementing the NREGA. During 2006-07, each village spent an average of Rs 900,000 to create productive assets like water conservation structures. In the last two years, each district has spent around Rs 44 crore.

However, the report says, if it is to reach its potential of changing the lives of 45 million rural households, it must be 'strengthened and revamped to provide not just wages for work done but "work" that will make ecological regeneration possible'.

Key findings

Creating productive assets

Though the focus of the scheme is on job-creation, there is a drop in demand for employment under it. The report attributes this to imperfections in the scheme itself, not to the fact that people in rural India do not need jobs.

Crucially, governments have failed to articulate the Act's development potential, it says. The focus should have been more on the real impact of the scheme on local development through productive asset-creation, not so much on job-creation.

Most NREGS money, the survey found, has gone towards road construction projects instead of works related to water conservation and harvesting that are listed as priorities under the NREGA. Of the 27 states where the NREGA has been implemented, only five have made substantial allocations to water conservation. During 2006-07, Andhra Pradesh alone accounted for around 67% of the country's total water conservation works under the NREGS.

The report gives the example of Hiware Bazar village in Maharashtra which has used the state's Employment Guarantee Scheme (EGS), predecessor to the NREGA, over the past 14 years to increase per capita income by 16 times. It gave top priority to water conservation structures and reforestation and the village has since become a water-surplus one from a water-scarce one. It now witnesses reverse migration from urban areas for better economic opportunities.

The emphasis on road construction rather than water conservation, the study says, is because irrational wage calculations have made water conservation projects less lucrative. Under the 'task rate wage payment', a worker gets paid based on the task completed. This leads to anomalies such as the case of Sakhi Soren, a daily wage earner in Surma village, Pakur, who worked on digging a pond for 13 days and should have got Rs 996.84 (basic minimum wage). But he only got Rs 750 because payment was done according to the amount of earth he dug, which was less than the stipulated 100 cubic feet per day. Going by the wage calculation, he would have got the basic minimum wage constructing a road, as road construction has a different wage rate based on per day wage payment without the attached task rate conditionality.

Bad planning, no maintenance

The scheme is also plagued by incomplete and abandoned works, and lack of maintenance of completed works.

Out of a total of 769,582 works under progress, only 158,277 (20.56%) have been completed. Till August 2007, only about 14% of water conservation works under the NREGS had been completed.

The study found that bad planning in the case of water conservation structures puts a large number of created assets into disuse. For instance, water harvesting structures are built without any provision for catchment protection. In Kanchanpur village in Sidhi district, three huge tanks were built under the NREGS but their catchments are in forest areas. Most catchments are degraded and the forest department doesn't allow anyone to treat them, a social worker told the CSE team. So, in two years, the tanks silt up.

On top of this, 'maintenance work' is not a permissible activity under the NREGA. 'This alone has the potential to undo whatever has been achieved,' says the report. It also points to how it becomes a problem for districts that already have several water harvesting structures and want to use NREGS money for maintenance, but cannot do so.

Village communities are being bypassed

Most states have not devolved the necessary function, funds and functionaries to panchayats for effective implementation of the NREGA.

Though panchayats are nodal bodies in the NREGA, they are fast turning into implementing agencies without any say in planning. The complex and cumbersome implementation procedure, which takes up to four months for a project to be approved and funds released, causes huge delays. There is also a shortage of technical staff at the panchayat level to evaluate works. All these difficulties lead to district line departments taking over the role of the panchayat for faster plan approval and completion; as a result, panchayats end up merely maintaining records.


The CSE study's recommendations include:

InfoChange News & Features, April 2008