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LATEST NEWS UPDATES | Demand, not supply

Demand, not supply

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published Published on Jul 9, 2012   modified Modified on Jul 9, 2012
-The Business Standard
 
MGNREGA review should be based on more research

Both acclaim and accusations have been hurled at the UPA’s landmark scheme, the Mahatma Gandhi National Rural Employment Guarantee programme, or MGNREGA. Usually, the reasons for the criticism or praise are less-than-completely supported. For example, it has been both praised and condemned for providing local wage employment to the jobless, thus curbing outmigration; similarly, it is claimed that the scheme has pushed up agricultural wages — thus either uplifting the living standards of the rural poor or contributing to agricultural crisis and food inflation, depending on one’s view. Farmer organisations, in particular, have focused on what they have said is a labour crunch acute at peak times, such as when sowing and harvesting are to occur. This cry is loudest in the intensively farmed northwest and south. Some have called for a dilution of the scheme — perhaps a halt during peak agricultural seasons, or by allowing labour under the scheme to be performed on privately owned fields as well.

That view is increasingly questioned by the evidence, which reveals that some common beliefs about the scheme and its impact are ill-founded. Recent work collated by the rural development ministry suggests that “trends of reduced labour force in agriculture precede MGNREGA”. A sequence of recent reports in the media, too, filed from intensive agricultural areas and during the kharif sowing season, does not endorse any dip in the seasonal labour migration. Nor do these reports attribute the rise in wages to MGNREGA-related factors. After all, implementation problems continue to bedevil the scheme, which hasn’t managed to offer employment for 100 days with fixed, timely wages everywhere. In Bihar, the state that accounts for the highest outmigration, just nine per cent of households got jobs under the scheme in 2011-12; and they averaged only 38 days of employment. Reportedly, few received full, on-time wages — something invisible to official records. Thus, the total earnings of an MGNREGA worker may not exceed Rs 2,000 to Rs 3,000 in a whole year; whereas the same worker migrating to, say, Punjab could easily make around Rs 8,000 in the short paddy transplanting season of less than a month. The MGNREGA, therefore, can hardly dissuade workers from migrating. Indeed, the rural development ministry’s collation of research suggests that only distress migration has been impacted, not seasonal migration.

More and more agricultural economists and bureaucrats attribute labour shortages and higher wages in agriculturally progressive states to a surge in demand instead of a supply constraint. The pattern of farming has undergone significant changes in these states. For example, while wheat cultivation has been fully mechanised, paddy farmers are growing almost the same set of varieties requiring planting almost at the same time. The sowing season has been statutorily shortened to save water and electricity; labour demand has thus been concentrated to a few weeks rather than being evenly spread over months, as earlier. It appears more likely that, implementation issues apart, the MGNREGA is working as advertised — as a support to rural incomes. Calls for its dilution should wait for systematic, nationwide data.

The Business Standard, 9 July, 2012, http://www.business-standard.com/india/news/demand-not-supply/479829/


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