An autonomous research institute under the Ministry of Finance


NIPFP blog author image

[Co-authored with Yadawendra Singh]


Globally, a direct employment transfer - a job guarantee programme - is an “employer of last resort” fiscal policy, which envisions the government bearing a guarantee to provide paid work opportunities of predictable duration at a predetermined wage for public works. Though many such job guarantee initiatives have been introduced over the years across the world, the popular and largest in scale are the US New Deal programmes ex-post to 1929 Great Depression, the Jefes programme in Argentina and the Expanded Public Works Programme (EPWP 2004-05) in South Africa, other than the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in India. These programmes are targeted at labour-intensive work in the field of environmental interventions and also in providing public benefits in asset-creating public works.1


The National Rural Employment Guarantee Act of India was enacted by the Indian Parliament on September 5, 2005. This Act guarantees 100 days of employment per year for individual households willing to do manual unskilled labor at the statutory minimum wage. It was later renamed as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on 2nd February, 2006.
The MGNREGA scheme is fully funded by the Union government of India in the form of a directed specific purpose transfer to the states. It is a demand driven scheme. As specified in the Act, for the purpose of funding and the implementation of MGNREGA, the Centre’s obligation would be to make payments of wages for unskilled manual workers under the scheme, upto three-fourths of the material costs of the scheme including wages to skilled and semi-skilled workers and a certain percentage of the total cost of the schemes determined by the Centre. The state government shall have to make payments of the cost of unemployment allowance. Apart from the mandatory provision of resources required for the implementation of the MGNREGA, its success in enhancing the “livelihood security” of rural households would critically depend on the effective implementation of the scheme. The present blogpost analyses the impact of direct fiscal transfers for employment in creation of job with a particular focus on gender differential impacts of employment guarantee programmes across states in India.
Integrating gender in direct employment transfer design
First, at the policy formulation stage itself, the Act was gender focused.2 The Act mandates that one-third of the job guarantee programme’s beneficiaries should be women. Two, it envisages a distance criteria that the work has to be within the stipulated 5 kms from the residence of the job seeker, with preference to women and the aged. Three, it prescribes equal wages for men and women in public works programmes. Four, it envisages a “labour entitlement” of 100 days to the members of the household (not confined to one person in the ‘household’). This gives more scope for women to participate in the programme. Five, a gender-aware financial inclusion practice was emphasized in its operational guidelines, which recommended the local government to facilitate opening individual bank accounts for men and women instead of joint bank accounts for the wage payments. Six, it prescribed provisioning of care economy infrastructure at the worksites such as child care to enhance the work force participation of women. Has this gender aware direct employment transfer policy design translated into better female labour force participation across States in India?
Gender differential effects of employment transfers across States
MGNREGA is based on the principle of self-selection, and it is a step towards legal enforcement of the right to work, as an aspect of the fundamental right to live with dignity.3 This programme aims to redress the seasonal, cyclical and structural unemployment in the country by providing the low-skilled poor a work entitlement thereby ensuring that when all else fails, the government acts as “employer of last resort”.  If we consider state-wise data on women’s participation rate provided in the MGNREGA portal for the year 2016, the female labour participation rate in job guarantee programme was more than 60 per cent only in Kerala, Tamil Nadu, Goa and Rajasthan. In many States, the female labour participation rate could not even cross the minimum threshold of 33 per cent as mandated in the Act.  The States where this rate is lower than 33 per cent are Jammu & Kashmir (25 per cent), Uttar Pradesh (29 per cent), Arunachal Pradesh (31 per cent) and Nagaland (31 per cent).
Moreover, there is no one to one correspondence between women’s participation in MGNREGA and the person days of employment per household data in the MGNREGA portal for the same year.  The percentage of households completing 100 days of employment is less than 20 per cent in all the states except Tripura where it is around 50 per cent. Further, the states which had higher person days per household had also higher percentage of households completing 100 days of employment. These data only revealed that the scheme is working below its potential.
What are the reasons for such a low turnout of women for work under MGNREGA in most states? We have obtained unit record data from The National Sample Survey 68th round on “Employment and Unemployment for the period of July 2011-June 2012 – the latest employment data available - to get useful insights to this question. The data shows that at all-India level 71% of males are registered with MGNREGA job card and it is only 50% for females. The lower registration of women for MGNREGA job card indicates that significant share of women is excluded from the non-farm employment (since MGNREGA provides non-farm employment in rural areas) in the first step itself. The data also reveals that the female registration is as low as below 30 per cent in States including Jharkhand, Meghalaya, Odisha, Bihar, Uttar Pradesh, Assam and Jammu & Kashmir.
It should also be noted that holding MGNREGA job card per se does not guarantee work under the scheme. The individual might be having the card but might not seek for work under the scheme. Further, the individual might have sought the work under the scheme, but could not have got the work. The data reveals that only 51 percent of those who have registered in MGNREGA have actually received the job guaranteed under the MGNREGA as per the 68th rounds of National Sample Survey.  The state specific differentials showed that Madhya Pradesh, Maharashtra, J&K and Bihar had shown dismal performance in terms of female employment in MGNREGA.
The percentage of MGNREGA job card holders who have ‘sought work, but did not get’ is an indication of exclusion after registration in the scheme. Such exclusion might be due to the flaws in implementation, not in the design of the scheme. At all India level, while 17 per cent of women registered under MGNREGA job card sought but did not get work, the same for males was 20 per cent. It implies that exclusion of females is relatively less at this stage as compared to their male counterpart. For females, Maharashtra performed the worst on this front followed by Bihar, Karnataka, Gujarat and Punjab. On the other hand, the states such as Goa, Manipur, Kerala, Meghalaya and Nagaland performed well on this front. 
Ironically, at all India level, 33 per cent of women who ‘have job card, have not sought for work’ whereas it is 29 per cent for males. The State-wise analysis showed that the women ‘with job card who did not seek work’ was strikingly high in Madhya Pradesh (68 per cent), J&K (55 per cent), Odisha (40 per cent) and Gujarat (38 per cent).
The recent NSSO (68th round) round on “employments and unemployment” has also incorporated codes on care economy activities and asked questions related to willingness to go for regular employment under MGNREGA by women. The analysis revealed the willingness of women to work in spite of their current domestic duties and this percentage is the highest for the category ‘women who sought but did not get work’ (43.5 per cent) followed by the women who have worked (42.4 per cent). This finding only implies the significance of care economy infrastructure to ease their work burden and strengthen women’s participation in the wage economy. This inference gets further strengthened when the NSSO rounds further explored about the “nature of work acceptable to women” – whether regular or causal. The estimates revealed that relatively large proportion of women who have worked demand regular ‘part time’ work (67.6 per cent) compared to regular ‘full time’ (26.7 per cent).  As the prominent reason for preference for ‘part time’ regular work was their “time poverty” due to care economy activities, it has public policy implications in terms of providing social care infrastructure investment. To explore the full potential of women’s labour force participation and to bring them to market economy as ‘regular’ rather than ‘casual’ workers, we need public infrastructure investment in the care economy. This would in turn strengthen the intra-household bargaining power of women which would have direct impact on education and health entitlements of her children.
To conclude, the gender differentials of MGNREGA is varied across States. However, the National Sample Survey estimates revealed that the female labour force participation rates (LFPR) of MGNREGA is 697 per 1000 women, which is more than double of LFPR of non-MGNREGA card holders. The estimates also revealed that Unemployment Rates among the non-MGNREGA card holders is ten times higher than that of MGNREGA card holders.
The potential of MGNREGA – a directed fiscal transfer for employment - for its macroeconomic stabilisation and social transformative effects cannot be undermined especially when our nation engages in the debate whether poor need “participation income” (wages from job guarantee) or “universal basic income”.
Dr. Lekha Chakraborty is Associate Professor, NIPFP. Click here for detailed profile. Yadawendra Singh is former IDRC Project Associate at NIPFP.
The views expressed in the post are those of the author only. No responsibility for them should be attributed to NIPFP.
blog comments powered by Disqus