Abstract
The pursuit of neoliberal economic reforms in India since 1991 has resulted in a high growth rate in gross domestic product, which is, however, unequally distributed across various sectors of the economy, leading to rising inequality and lower job creation. The high growth rate has been achieved mostly through the service sector, with a lower elasticity of job creation. Moreover, the service sector has created jobs for highly skilled labor. Unequal growth has also resulted in increased regional disparities; growth has been generated mostly from western and southern states. Realizing the consequences of rising inequality, jobless and exclusionary growth, the Eleventh Five Year Plan (2007–12) focused on promoting inclusive growth with employment centric strategy. The Mahatma Gandhi National Rural Employment Guarantee Scheme1 (MGNREGS), a rural workfare program, which originates from the MGNREG Act (MGNREGA, 2005), was envisaged as a component of inclusive growth strategy.
The book by Ashok Pankaj, titled Inclusive Development Through Guaranteed Employment: India’s MGNREGA Experiences, deliberates on inclusive growth and development strategy and argues that, given India’s conditions, especially abundant unskilled labor heavily underemployed in agriculture, the employment guarantee scheme (EGS) is an instrument of promoting inclusive growth and development in the short to medium run. It goes on to argue that EGS entails removing structural barriers to ensuring equal participation by “capability enhancement” in the long run that has been explained as “growth with justice” (chapter 3).
Although India has experimented with a number of employment generation programs as a poverty alleviation measure, especially since the 1970s, the MGNREGS is a major departure by being a rights-based program originating in an Act of Parliament, which guarantees 100 days of employment in every financial year to rural households whose adult members volunteer to do unskilled work. Important features of the workfare program, that is, the main conveyer of guaranteed employment, are: demand- and rights-based employment; community-centric programs; provision for workers’ rights and facilities; statutory minimum wages; compensatory allowances and robust transparency and accountability provision. The workfare program, though drawn on past experiences, in particular, the Maharashtra Employment Guarantee Scheme (MEGS), has made significant improvements in design. Implementation experiences suggest that notwithstanding weak institutional capacity at the grassroots level, that is, the Panchayati Raj Institutions (PRIs), the program has worked better than erstwhile rural employment programs including MEGS, which demonstrates the superior design of the program.
Chapter 1 of the book provides the context of the program, tracing the origin of public works programs to the famous ancient treatise on statecraft, the Arthashastra by Kautilya. It, then, explains that the pursuit of economic reforms since 1991 and its adverse consequences leading to unequal and jobless growth is the immediate context of the MGNREGS. This chapter also discusses the functioning of the erstwhile rural employment programs and various other poverty alleviation schemes.
Chapter 2 explains EGS as a measure of promoting inclusive growth and development that the author describes as “growth with justice.” This is the author’s real contribution to developing a nuanced understanding of linking the employment guarantee as a tool to ease not only “opportunity exclusion” but also “capability exclusion.” The author argues that “growth with justice” emphasizes creating enabling conditions for all, with a focus on the marginalized and excluded population and their participation in the growth and development process. It also aims for the removal of structural and other barriers to equal participation in the growth process. A matrix provided in Chart 1 of this chapter elaborates this idea and shows how “growth with justice” can be ensured through the EGS, with wage, income, and labor market effects.
Chapter 3 discusses various features of the MGNREGS and then explains its inclusive development characteristics, which are universal coverage of population, entitlement of employment days, fixation of minimum wage rate, lean season employment generation, creation of productive assets, and special provisions for women. The main features of the Act are also explained in detail.
The next chapter, “Seamless Reach unto the Last,” provides an account of the overall coverage of the MGNREGS. It shows that the MGNREGS has an outstanding record in reaching out to the most deprived rural poor and vulnerable households, across states. This demonstrates the inclusive character of the MGNREGS that has ensured higher participation of Scheduled Castes (SC), Scheduled Tribes (ST), and women. Combined participation of SC and ST has remained at nearly 38%–40% over the last few years. Women too constitute a sizable portion (51.2%) of the total MGNREGS employment days, cumulative of the period between 2006–2007 and 2019–2020, though their share varied across the states. The author delves into the details of state-wise variation in participation in this section. The arguments are further strengthened with support from the field observations, citing various studies including the author’s own extensive field observations on inclusion criteria, self-selection, and extent of work provided through MGNREGS. The author also shows that the MGRNEGS qualifies as the world’s largest public work–based employment generation program due to its massive coverage. For instance, in 2019–2020 there were 135 million registered job cards and 265 million registered workers, out of which 81.2 million job cards and 126.3 million workers were active. The coverage is massive, as the number of registered MGNREGS workers exceeds the total population of any country in the world, except China, the United States, and Indonesia.
Chapters 5 and 6 capture the impact of the MGNREGS through employment and income effects, wage effects, poverty reduction, and asset creation effects. MGNREGS has provided not only direct income but also additional income whose marginal utility is considerably higher due to the scarcity of cash income among the rural poor. Indirect benefits of the MGNREGS include reduced gender wage disparities, especially from 2004–2005 to 2011–2012, which also saw a higher growth rate in female farm wage rate compared to the male farm wage rate. Similarly, asset creation through MGNREGS has led to the regeneration of natural resources such as land, water, and forests. This has also helped in reducing the workload of rural women in terms of lesser efforts needed to collect fodder, fuel, and fetching of water from far-flung areas. These impacts of the program demonstrate that the MGNREGS has promoted employment-centric inclusive growth and development whose main beneficiaries are the deprived rural poor. However, one of the shortcomings of the benefits of individual assets of MGNREGS is that it has benefited those who have land, leaving landless, who should be the real target of individual assets, in the lurch. This argument is taken up by the author as a corrective measure for the program in chapter 8.
Chapter 7 highlights the benefits of the MGNREGS in bringing about the social and economic empowerment of rural poor, including women, through reduction in borrowings, distress migration, and enhanced bargaining position. As a result, they are able to negotiate higher wages and better working conditions in the labor market. Social security, enhanced fall-back position, liberating effects of lean season employment, women’s empowerment, and political capacity building of the poor are the main empowerment effects. The potential of the program is immense for women’s empowerment due to their high levels of participation. For instance, participation of women is high in states such as Kerala, Tamil Nadu, Telangana, and Himachal Pradesh, although it is not even across states, as pointed out in this chapter, and state-wise detailed data are provided in the annexure. Furthermore, the author rightfully asserts that the MGNREGS has provided income security and reduced dependence on powerful actors such as landowners or moneylenders (market or community domain) and husbands (household domain). Here one can argue that reduced dependency does not necessarily imply greater freedom and empowerment due to deeply entrenched hierarchal social structure and patriarchal norms that remain a potent source of disempowerment for the poor and women.
Though the focus of chapter 8 is on the achievements of the MGNREGS, which have been discussed throughout the book, it also highlights the major weaknesses of the program. There are three weaknesses in the implementation of the program: it has been mainly supply-based across the states against the provision of demand-based employment; employment generation has remained inadequate leading to rationing of jobs; and only one-tenth of the participant households at the all-India level get the full quota of 100 days of employment. The other challenges in implementation are delayed payment of wages and nonenforcement of compensatory provisions, such as unemployment allowance and compensation for injury. The author also argues that in some cases, asset creation has remained marred by poor selection, questionable quality, durability, and doubtful utility. Interstate and intrastate variations in the implementation of the program create serious equity implications. For instance, states with high incidences of rural poverty, such as Uttar Pradesh, Bihar, Jharkhand, Odisha, Assam, have remained laggards, whilst states such as Kerala, Tamil Nadu, Andhra Pradesh, Telangana, and others, with low incidences of rural poverty, have been the front runners. These variations are mainly due to variations in administrative capabilities and political interests in carrying out the program well. The weak capacities of local institutions like PRIs are the other challenge. The author has talked in detail about the achievements as well as the failures of the program, which makes the book more balanced.
In the concluding chapter, the author suggests some measures for further increasing the efficacies of the MGNREGS for promoting inclusive development. It recommends enhanced coverage, higher intensity of employment generation, rationalization of wages, focused creation of productive assets, better targeting of individual assets, enhanced community participation, enforcement of transparency, and accountability mechanisms and ensuring demand-based adequate employment generation. The book pleads for a similar program in urban India to enhance overall inclusive development impacts of guaranteed employment; of course, the nature and design of the urban EGS would be different. Some states such as Madhya Pradesh, Rajasthan, and Himachal Pradesh have already introduced urban EGS, but that needs to be more innovative. This book also suggests that Afro-Asian countries (for example, South Africa, Nigeria, Ethiopia, Zimbabwe, Pakistan, Afghanistan, Bangladesh, Nepal, Myanmar, etc.) with low levels of development and acute problem of unemployment can emulate India’s MGNREGS, tweaking the design as per their local conditions.
The ideas discussed in the book are crucial in understanding an inclusive and rights-based approach for promoting development in developing countries. Overall, this book is one of the finest attempts in providing an extensive account of the impacts of the MGNREGS on the rural poor and local economy and clearly demonstrates that it has resulted in improvement in the conditions of the rural poor. This book provides an excellent account of the economic and social impacts of the MGNREGS. However, a reader would expect a discussion on the issues of implementation of the MGNREGS in much greater detail, though it is not the focus of the book.
The book is a timely publication as the critique of the MGNREGS has become aggressively vocal and assertive. There has been a debate on cash transfers versus EGS from the very beginning of the program. However, the protagonist of the cash transfers that include critiques of MGNREGS became emboldened by a statement of Prime Minister Narendra Modi in 2016, on the floor of the Lok Sabha, who called it out as a “living monumental failure” of 70 years of development. The book amply demonstrates the continued utility of the program (chapters 5–7) and also shows the advantages of EGS over cash transfer programs (Postscript 1) at least in the present context of India. The book is a valuable addition to the literature on the EGS and makes a distinct contribution by the way of arguing and demonstrating that the EGS is also an instrument for promoting inclusive growth and development in India and other similar developing countries.