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Resource centre on India's rural distress
 
 

The MGNREGA index -Shobhit Mathur & Nomesh Bolia
-The Hindu

Figuring out key parameters on which to measure a State’s performance provides a playbook of best practices for others to follow.

The Mahatma Gandhi National Rural Employment Guarantee Act of 2005 (MGNREGA) aims at “enhancing the livelihood security of people in rural areas by guaranteeing 100 days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work.” In the financial year 2015-16, Rs.42,084 crore was spent on MGNREGA. As there has been no serious attempt to rank the implementation of MGNREGA across States so far, we assessed the implementation of the Act by the States between 2015 and 2016.

Performance indicators

We selected three performance indicators to rank the States: average days of employment per household, percentage wages paid within the promised 15 days of enlisting to work, and the work completion rate. Each indicator measures the implementation of MGNREGA in the State on an important output. Collectively the three indicators capture the key aspects of MGNREGA implementation, namely, employment generation, wages paid in time, and assets created as promised.
 
MGNREGA index
First, even though MGNREGA guarantees 100 days of employment, the national average has always been below 50 days. Comparing this value across States, we found that Tripura was able to provide 95 days of employment on average. Manipur and Goa were at the lower end, providing 16 and 18 days of employment, respectively.

We selected three performance indicators to rank the States: average days of employment per household, percentage wages paid within the promised 15 days of enlisting to work, and the work completion rate. Each indicator measures the implementation of MGNREGA in the State on an important output. Collectively the three indicators capture the key aspects of MGNREGA implementation, namely, employment generation, wages paid in time, and assets created as promised.

First, even though MGNREGA guarantees 100 days of employment, the national average has always been below 50 days. Comparing this value across States, we found that Tripura was able to provide 95 days of employment on average. Manipur and Goa were at the lower end, providing 16 and 18 days of employment, respectively.
 
 Second, MGNREGA requires that wages be paid within 15 days of closing the muster roll. Last financial year, only 40 per cent of the wages were paid within the stipulated time of 15 days. Manipur stood out in this case with 82 per cent of wages being paid within 15 days while Meghalaya was only able to pay wages for 4 per cent of the people on time.

Third, work completion rate refers to the number of works completed compared to works started, in percentage terms. Mizoram performed best in this case with a 92 per cent work completion rate. Tripura, Haryana, Madhya Pradesh, Himachal Pradesh also had work completion rates of above 80 per cent. Arunachal Pradesh was at the bottom at just 20 per cent work completion rate.

Performance score

The absolute values of each performance metric are scaled to a value between 0 and 10 by dividing with the highest value across States (to get a value between 0 and 1) and multiplying it by 10. We added up the scores across all performance indicators to come up with the score out of 30. The stacked bar chart ranking the States on their overall score out of 30 is shown in the graphic.

Findings

It is interesting that two north-eastern States are at either extreme of the ranking: Tripura on top with a score of 26.8 and Arunachal Pradesh at the bottom with a score of 7.1. Mizoram was a close second with a score of 26.3. Chhattisgarh, Goa, Meghalaya and Punjab all ranked second from the bottom with a score of 12.7. Andhra Pradesh and Jharkhand were two major States with a high ranking. West Bengal, Bihar and Uttar Pradesh were major States with a low score of 14.

This ranking intends to give an overview to the policymakers of what works in each State and what doesn’t. The implementation practices from the high-ranking States in each category could be replicated in other States. For example, looking at the macro picture it is not clear why MGNREGA is able to provide below 50 days of employment on average nationally. This is possible due to shortage of funds or due to lack of demand for work due to low wage rates. The reasons could vary across and within States. Analysing the State-wise data, we see that Tripura was able to generate about 95 days of employment per household. The reasons for the high employment days in Tripura need to be studied, so that they can be replicated in other similar States. Similarly, a big State such as Andhra Pradesh was able to pay 80 per cent of the wages within the promised 15 days of enlisting to work, and Madhya Pradesh was able to achieve 82 per cent work completion rate. The best practices in each of these high-performing States should be documented and shared with the other States, so that the performance of each State can go up. For example, Andhra Pradesh is known for widespread computerisation of the processes which reduces corruption and ensures timely transfer of funds.

The Centre seems committed to MGNREGA. About 2 per cent of the Union Budget or 0.3 per cent of the GDP is allocated to the scheme. Ensuring that this amount reaches the people who opt to work, while creating durable rural assets, is important. This mega scheme needs local fixes and innovations to become more efficient and effective. This points out the aspects of implementation lacking in various States and gives an idea about where to look to make implementation successful. The ranking also recognises States that are performing well, and can be used to allocate funds and resources in a targeted manner.

Shobhit Mathur is Executive Director of Vision India Foundation. Nomesh Bolia is an associate professor at IIT Delhi.