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Resource centre on India's rural distress
 
 

Rural India goes urban by Rajesh Shukla


Most discussions on the National Rural Employment Guarantee Act (NREGA) have focused on one of few things, the leakages in the implementation of the scheme, the inadequate number of jobs created, and some even talk of how NREGA has resulted in food inflation going up in various districts as well as increasing mechanisation due to unavailability of farm labour. It is, of course, true that you can’t have food inflation and disappearance of labour due to NREGA if its implementation is not good—critics have to decide which way they’re going, they can’t have both views at the same time.

What is true, and NREGA may have something to do with it, is there has been a sea change in rural India in even just the last five years. The NREGA Website tells us that 45 million households have NREGA cards. That’s equal to around 30% of all rural households. It is clear that not all these households have got jobs from NREGA, nor is it true that all of them have got the legislated 100 days of employment in a year. But what NREGA has done is change the way rural folk view employment. In 2004-05, NCAER conducted its National Survey of Household Income and Expenditure across the country—a survey we have been conducting almost annually since the mid-1980s. What it showed was that 41% of the rural population was drawing their income from self-employed in agriculture; 35% reported labour as their major source of earning and 11% said they were salaried.

In 2009-10, we repeated the exercise in the form of the National Youth Readership Survey. This showed an interesting shift. Those reporting themselves as self-employed in agriculture fell to 23% and those who earned their principal income from labour rose to 42%. You could argue both are essentially related to agriculture, so the change isn’t that high. That’s not true, since the proportion of households reporting their principal income as coming from salaries rose from 11% in the 2004-05 survey to 19% in 2009-10. But surely the fact that a lot more persons, even if they continue to remain within agriculture, are reporting labour as their income source. This is the real victory of NREGA: the change in perception of labour as a means of livelihood.

Equally interesting, according to a NCAER-PIF study, Evaluating Performance of NREGA (Sharma, 2009), there has been a 49% jump in employment generation for women, leading to the fulfilment of one of the key objectives of the programme, viz 33% share for women. It must be pointed out here that the credit for the national average striking 43% in this area goes wholly to the southern states—elsewhere, female participation rates ranged from 1% in J&K to 19% in West Bengal.

The shift of rural folks from agriculture to labour may be seen in the wider context of falling levels of protection, reducing acreage and lowering of social security nets in the sector. The Economic Survey (2009-10) says that public investment in agriculture, in real terms, has steadily declined in the Sixth and Tenth Plan periods (1980-2007 at 1999-2000 prices). In the first two years of the Eleventh Plan, the agriculture and allied sector recorded a growth of 4.7% in 2007-08 and 1.6% in 2008-09. All of which would suggest agriculture is less of a lucrative profession nowadays.

The news isn’t all good though. The National Youth Readership Survey (2009) found that of the total literate youth population (333 million), 62%, or 207 million, lived in rural areas. Not all these youth can find satisfying jobs in rural India. Logically, the solution has to be more urbanisation. But with urban India not able to absorb them, urban slums are the result. NREGA can help reduce the pressure for migration for a while, it cannot provide a permanent solution, and it cannot provide a solution for the educated. The policy message is: do not restrict NREGA to digging trenches and sinking wells but link it to skill development for the younger generation through entrepreneurial education and training so that there can be micro industrialisation in rural areas, both farm and non-farm based.