India’s Development Outcomes through Right-Based Policy Initiatives : Case of MGNREGA

Photo Source: Ministry of Rural Development, GOI

There has been a paradigm shift in the development outcomes of Indian states in post 2005-06 period with many of the backward states performing better than earlier. Thus Bihar, Odisha, Assam, Rajasthan, Chhattisgarh, Madhya Pradesh, Uttarakhand and to some extent Uttar Pradesh, have demonstrated improvement in socio-economic performance. This was largely possible due to various right-based and redistributive policy initiatives of UPA government to reduce the gaps between the rich and poor, rural and urban, backward and advance regions, and to achieve a better development outcome with an inclusive agenda. Bharat Niram Yogona, Indira Awas Yojna, Prime Minister’s Gram Sadak Yojna, Sarva Shiksha Abhiyan, National Rural Health Mission are some such remarkable policies that India has undertaken in the period of last 10 years to attain development outcomes in infrastructure, poverty alleviation, education and health in a more balanced manner.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is another such historic anti-poverty policy step that India has laid down in the year 2005, which came in force in 2006. It addresses the issue of India’s massive rural unemployment challenge by creating a right-based framework and guaranteeing 100 days of wage-employment to a rural household, whose adult members volunteer for unskilled manual work. It makes government accountable for providing employment to those who ask for it and guarantees right to employment. In the larger context, it aims at enhancing livelihood security, social protection and capital asset creation to develop long term sustainable model for local and rural economy of India.

MGNREGA began its journey with 200 most distressed districts of India, and within this short span of 7 years time till 2013, it has covered all the 644 districts with a massive expansion across 6576 blocks and 778134 villages. The average wage per day per person is Rs 132.6. The All India minimum average daily wage rates in different occupation in both agricultural and non-agricultural sectors also have gone high substantially. But MGNREGA has ensured to give equal wage to both men and women, which so far was unimaginable in rural India. Such increase in wage rates has helped to boost the consumption pattern in rural India. Thus according to NSSO estimates the rural MPCE has gone high from Rs 579.17 in 2004-05 to Rs 953.05 in 2009-10 and then to Rs 1287.17 in 2011-12. The food expenditure share has gone down to 53%, with 10%, 8%, 6% and 8% in cereal, milk & milk products, vegetables and beverages & processed food. While in non-food category, the share is almost equal for major items like clothing (8%), medical (7%) and education (7%). This is an encouraging scenario reflecting better living standard in rural India. The rural poverty ratio in India has also gone down to 25.70% (2166.58 lakhs persons) in 2011-12 from 33.8% (2782.1 lakhs) in 2009-10 and 42% (3258.1 lakhs) in 2004-05. MGNREGA is the first ever act globally which guarantees employment at an unprecedented scale, touching to 732 lakhs rural population by the year 2013-14. It targets the most vulnerable and marginalized sections where women share almost 50% (351 lakhs), SCs share 23% (167 lakhs) and STs share 18% (129 lakhs) of total employment.

With such scale and coverage, MGNREGA certainly has penetrated the challenge of unemployment in rural India. But while critiquing many are of the opinion that MGNREGA has failed utterly in asset creation and has not optimally achieved the objective to strengthen natural resource management through works that address cases of chronic poverty like drought, deforestation, soil erosion, and to have a long term sustainable development frame. The total sanctioned work under MGNREGA in 2012-13 was 70.50 lakhs, of which only 10.21 lakhs (15%) projects are completed; where works like water conservation constitutes 60%, irrigation 12%, rural connection 17%, land development 8% and rural sanitation 0.22%. It is also being argued that as the scheme targets the unskilled workers, who henceforth do not develop any skill for their future workforce participation. Therefore to make it more useful, the workforce can be exposed to certain skill development programme, which later can be used at least for self-employment opportunities. In terms of financial leakages, it is being argued and verified by CAG reports that there is large scale of misappropriation of MGNREGA funds across some states in India. The states therefore need to be highly vigilant and pro-active as the expenditure of the scheme is incremental. For example in 2012-13, the total fund allocation has gone high to Rs 39735.4 crores from Rs 37072.7 crores in 2011-12 (7% rise by an year) with wage expenditure alone sharing around 75%. There are also serious problems of state-level delivery in wage and employment days, and there exists huge inter-state variation in the performance outcome of MGNREGA. Thus household employment in the year 2012-13 was highest in Tamil Nadu with 64.8 lakhs and lowest in Punjab with 1.7 lakhs. The women share in employment in the same year was 94% in Kerala and 19% in Uttar Pradesh with national average of 53%. Thus both social and financial audits need to be more rigorous and regular along with the role of states at implementation level. Finally to attain optimum development outcome from MGNREGA as one of the most successful right-based employment policies in the world, it may need certain revision at structural level by incorporating more voices of rural India.

Rakhee Bhattacharya

 Data Sources

·         Annual Reports, Ministry of Rural Development, GOI

·         NSSO reports, Ministry of Statistics and Programme Implementation, GOI

·         Annual Reports, Ministry of labour, GOI

·         Press Notes, Planning Commission, GOI

 

Economic Recovery: Policy Imperative for Job Upturn in India

Photo Source: The Economic Times

The impending 16^th Lok Sabha election is going to be one of the most promising and extravagant events in Indian political history costing its exchequer about Rs 3,500 crores, excluding the expenses on security and individual political parties. The post-election scenario therefore legitimately awaits a new phase of  Indian political-economy. It beckons the hope of millions to find ways for economic recovery and job upturn, especially for the growing youth population in India, when present demographic profile is almost divided into two halves, the youth and the rest, a large part of which needs immediate attention for productive economic engagement.

 

According to National Sample Survey Organisation (NSSO), in 2011-12 unemployment rate (ratio of total unemployed to total laboure force) in usual status is nearly 2 percent at all-India level with about 2 percent in rural areas (for both male and female) and about 3 percent in urban area (3 percent for males and 5 percent for female). Thus with estimated 40 percent population belong to labour force as per the NSSO, India has a little high about 80 lakhs unemployed. The youth unemployment scenario is even worse, and according to Labour Bureaue estimates in 2013 about 4.7 percent is the youth unemployment rate in India with 4.4 percent in rural area and 5.7 percent in urban area. The all-India Youth Labour Force Participation is 50.9 percent with 52.8 percent in rural sector and 46.1 percent in urban sector. Amongst them, female LFPR is significantly lower (22.6 percent) as compared to male (76.6 percent) under the usual principal status approach. For 15-29 years age group, Labour Force Participation Rate and Unemployment Rate under the usual principal status approach is estimated to be 39.5 per cent and 13.3 per cent respectively. 

Such alarming situation is primarily for poor sectoral economic performance in India. For example, job creation in 2013 is worst affected with the manufacturing sector being the worst hit by the slowdown and projects being stuck due to lack of clearance and approval. Thus Indian companies have hit a three-year slump as slowing economy persists where a large number of development projects remain stalled despite the government trying its best to get them moving amidst efforts to accelerate investment and get growth back on track. The decline in hiring in 2013 was visible in sectors such as automobiles, capital goods, tyres, shipping, paper, construction, power generation and retail in line. Similar is the situation even in service sector, where job has declined by 31 percent by 2012, mostly from IT, telecom, financial services and hospitality services. A drop in GDP percentage from about 9 percent to about 4.5 percent from 2011 to 2013 had alarmingly taken away about 30 lakhs jobs from Indian market.

Despite persistent attempts by the UPA government to face such challenge through several centrally sponsored schemes like Swarna Jayanti Shahari Rozgar Yojana  for urban  India, and Mahatma Gandhi National Rural Employment Guarantee Act, Sampoorna Gramin Rojgar Yojana, Swarna Jayanti Gram Swarozgar Yojona for rural India, joblessness, especially amongst the youths remains a glaring issue. There possibly needs a much robust approach and planning where job creation needs to feature as a prime element in any development policy in India. It is being argued that non-farm job creation and productivity growth are fundamentals with more labour-intensive manufacturing, construction and service units. There are four major areas, where India can depend in the next phase of change, viz., IT, telecom, healthcare, infrastructure and retail. High-value-added manufacturing sector and increasing non-farm sectors, reformed labour laws in informal sector and raising shares of organized enterprises, linking skill-development prograrrme to all centrally sponsored schemes are the needs of the hour. Along such line of reform measures, India needs to deploy public investment to create ‘job creation engines’ like industrial clusters, tourism circuits and food-processing parks to expand the options for poorest citizens of the country.     

Lastly a congenial relation between industry and government is extremely important. According to a report by McKinsey Global Institute (2014), ‘India’s leadership can hit the reset button and redefine this relationship for a new era. Rather than taking a prescriptive approach that tightly manages industry, policy makers can adopt a new mindset-one focused on competitive market environment that allows business to thrive. By sweeping away arcane regulation and antiquated procedures, India can build a more efficient engine of job creation. Combining a bold reform agenda with forward-thinking investment in job creation engines of the future could generate opportunities for millions of Indians to obtain better jobs, attain a better livelihood, and reach the next rung on the economic ladder’ 

Rakhee Bhattacharya  

References

Press Note, Key Indicators of Employment and Unemployment in India, 2011-12, Press Information Bureau, GOI at http://pib.nic.in/newsite/erelease.aspx?relid=96

Press Note, Third Annual Employment & Unemployment Survey Report, 2012-13, Labour Bureau, GOI at http://labourbureau.nic.in/reports.htm

Report, Indian Labour Journal, No. 12, Volume 54, December 2013

Report, The Economic Times, 04.10.2013

Report, ‘From Poverty to Empowerment: India Imperatives for Jobs, Growth and Effective Basic Services’, McKinsey Global Institute, 2014

 

Skilling India’s Youth for Better Employability: Policy Evaluation

Students being trained at ITI Gurgaon; Source: www.livemint.com

During past nine years, the idea of skilling youth has attracted attentions both nationally and internationally and there has been a continuous large scale ongoing debate on this issue even in India along with transformation. The major driving force behind such transformation is actually rooted to the persistent rise of economic aspirations of different sections of the society, especially amongst its growing youths, who are seriously exposed to the challenges unemployment and opportunities. The untiring strive for collective efforts to improve the systemic delivery of services in skill training is rather very impressive.

As per Census 2011, India has 583 million of youth population aged between 10-35 years, out of which 398 million (68%) are in rural areas. About 68% of India’s population is below the age of 35 years, increased from 60% in 2001. The dropout rate for Classes I-X in school education is about 60% in 2007-08. The dropout rates for SC and ST students are even higher at 68% and 78% respectively. As per NSS data, in the age group of 15-29 years, the proportion of persons received formal and informal vocational training is very negligible at 2% and 8% respectively. There is also a huge mismatch between skills trained and needs of the market. In fact, the issues of employability become a major concern implying that the youth lacks not just generic skills but huge technical skills which market demands. This shows that our youth are in big trouble, who are neither in school nor in training institutions for skilling. This is a big threat to the much cherished window of demographic dividend. The United Progressive Government (UPA) has taken several meaningful policy measures to arrest this trend and improve the employability of youth.

 

There has been a paradigm shift since 11^th Five Year Plan with regard to the public policies on skill development in India. An inclusive framework was devised involving subject experts, industries, civil society and international community through the Coordinated Action on Skill Development, which was created with a three tier institutional structure in 2008, including (i) Prime Minister’s National Council on Skill Development (PMNCSD) for overall policy directions, (ii) National Skill Development Coordination Board (NSDCB) under the Planning Commission for policy coordination among different stakeholders, and the (iii) National Skill Development Corporation under the Ministry of Finance in public private partnership mode to foster and catalyze the efforts of private sector involvements in skilling the youth in India.

Subsequently, the Government of India also announced the National Policy on Skill Development in 2009 with an objective to provide skill training to 500 million persons by the year 2022 when India become 75 year after Independence. This policy is the guiding document for the country as a whole and provides a very comprehensive set of innovative and radical policy measures for addressing the major challenges faced by the skill training sector in India. Besides, several measures for systemic and structural reforms, the Policy promotes greater Choice for trainees and Competition among training institutions with transparency and accountability. It also paves practical ways for skilling informal sector workers who constitute more than 94% of workforce.

Thus, both the Coordinated Action on Skill Development and the 2009 Policy played vital role for several innovative skill training schemes/programmes in the last 7-8 years initiated by both Central Ministries/Departments and State/UT governments. In fact, almost all the State/UT governments have established the State Skill Development Missions of their own with inclusive framework in order to bring necessary structural changes for improving employability of youth.

There are two major players in skilling the youth which are NSDC and Ministry of Labour & Employment. Till November 2013, the NSDC has partnered with 2,202 training institutes including mobile training centres and trained about 9.91 lakh persons, out of which they have placed 6 lakh persons (60.5%) since 2009. The Ministry of Labour through its Skill Development Initiative (SDI) Scheme based on Modular Employable Skills (MES) trained about 16 lakh persons since 2007-08.

However, in order to address the skilling issues to a greater extent by bringing systemic and structural reforms, the UPA government has set up a dedicated permanent institutional structure, namely the National Skill Development Agency (NSDA) under the Ministry of Finance by subsuming the PMNCSD and NSDCB in 2013. The NSDA is an autonomous body and aims to coordinate and harmonize the skill development efforts of the Central and State Governments and the private sector to achieve the targets of skilling youth. Moreover, the NSDA has mandate to bridge the social, regional, gender and economic divide in skilling youth through ensuring the skilling needs of the disadvantaged and marginalized groups like SCs, STs, OBCs, minorities, women and differently-abled persons. The NSDA has also been asked to take affirmative action as part of advocacy by the NSDA. The quality of training is something which the NSDA should address holistically by partnering with industry and civil society and by ensuring both supply and demand sides of the skilling youth. Such measures hopefully can help in addressing the challenges of skilling youth in India with better employability and future.
 

B.Chandrasekaran