International Journal of Pure and Applied Mathematics

Volume 118 No. 20 2018, 4149-4157

ISSN: 1314-3395 (on-line version)
url: [Link]
Special Issue
[Link]

SOCIO-ECONOMIC IMPACT OF NREGA ON

WORKERS AND EFFECTIVENESS IN ITS
IMPLEMENTATION-A STUDY OF SOUTHERN
KERALA
Abymon A, Asish Cherian Sunny, Jibin Oommen Babu
Department of Commerce and Management

Amrita School of Arts and Sciences

Amrita Vishwa Vidyapeetham

Amritapuri

Email: abymona@[Link]
ABSTRACT—NREGA is a social security tool launched in 2005 to enhance the livelihood security of the rural poor
by providing them with 100 days of guaranteed employment in a financial year. Any adult who is willing to do
unskilled labour can register under NREGA and demand for work. NREGA has helped in assuring a minimum
financial security to the rural sections and has contributed to the overall economic and social well-being of its
members. The efficiency in its implementation by the gram panchayaths has also played a major part in ensuring its
success. In the World Development Report of 2014, NREGA was reported as a peerless example of rural
development. The present study aims to evaluate the socio-economic impact of NREGA specifically on its women
workers and the effectiveness with which it is being implemented in Kerala.

KEYWORDS: NREGA, livelihood security, Socio-Economic impact.

I. INTRODUCTION
National Rural Employment Guarantee Act 2005 (which was later known as Mahatma Gandhi National Rural
Employment Guarantee Act), is a guaranteed rural employment program aimed at providing 100 days of wage –
employment to the adult members of rural households, who are willing to perform unskilled labour. The
inherent objective of NREGA is to supplement the livelihood security of the rural sections of India. The concept
of NREGA which was initially put forward by P.V Narasimha Rao in 1991 was accepted by the Indian
parliament in the year 2005. In 2006, NREGA was implemented in 625 districts of India and it was further
implemented in all the districts across the country on 1st April 2008, based on the pilot experience.

NREGA provides employment to all those rural adults who are willing to do unskilled manual work. Those who
are registered under the scheme should be provided with 100 days of employment within 15 days of application
and also within 5km distance from their home. The wages of the workers are directly credited into their aadhar-
linked bank accounts. The gram panchayaths are responsible for the actual implementation of the Act. Major
works which are undertaken under NREGA includes creating facilities for water harvesting, construction of
canals, ponds, wells etc. NREGA has contributed to the economic as well as social development of the rural
sections. Apart from all the economic benefits of NREGA, it has also contributed to ensuring social equality and
empowering rural women. It has helped in improving the standard of living of the poor sections of the country.
NREGA has played a major role in the economic as well as social development of Kerala. The average wage
rate provided per day under NREGA in Kerala is Rs.260 which is the highest when compared to all the other
states. Highest women participation is also a unique feature of NREGA in Kerala. The success of NREGA in
Kerala can also be attributed to the efficient implementation of the Act by the gram panchayaths. NREGA has
been a major source of employment and livelihood support for the rural population of Kerala with very low
educational qualification and economic background.

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The economic and social benefits of NREGA and the effectiveness in its implementation, in Kerala context,
with special reference to women workers have not yet been adequately examined in the existing literature.
Therefore, the objectives of the present study are:

 To evaluate the economic benefits of NREGA by analyzing whether the workers whose only source of
income is the wages from NREGA, has been able to increase their savings with the income from
NREGA.
 To evaluate the economic benefits of NREGA by analyzing whether the workers whose only source of
income is the wages from NREGA, has been able to repay their debts with the income from NREGA.
 To evaluate the social benefits of NREGA with respect to its impact on social recognition and
improvement in skills of the workers.
 To assess the effectiveness in implementation of NREGA in Kerala.

This study aims to provide a clear understanding about the impact and the usefulness of NREGA and also to
help the policy makers understand about the effectiveness in its implementation. The study evaluates the
economic benefits by assessing whether the workers whose only source of income is the wages from NREGA,
has been able to increase their savings and repay their debts with the income from NREGA. The effectiveness in
the implementation of NREGA from the point of view of number of work days provided, effectiveness of
training provided, facilities provided at work sites and awareness about NREGA have also been analysed
through this study. This will surely help in providing an insight into the various aspects related to the
implementation of the scheme. The study has analyzed whether the scheme has helped in improving the social
recognition and skills of the workers.

II. HYPOTHESIS OF THE STUDY

HYPOTHESIS 1:

H0: There is no significant association between increase in savings with wages from NREGA and NREGA
being the only source of income.

H1: There is significant association between increase in savings with wages from NREGA and NREGA being
the only source of income.
HYPOTHESIS 2:

H0: There is no significant association between the ability of the workers to repay debt with the wages from
NREGA and NREGA being the only source of income.

H1: There is a significant association between the ability of the workers to repay debt with the wages from
NREGA and NREGA being the only source of income.
HYPOTHESIS 3:

H0: There is no significant relation between increase in social recognition of the workers and NREGA being the
only source of income.

H1: There is a significant relation between increase in social recognition of the workers and NREGA being the
only source of income.
III. REVIEW OF LITERATURE

The study analyzed the impact of MGNREGA from the point of view of ensuring financial inclusion of the
rural poor by specially considering the SC and ST women. Authors have also examined the level of change from
unskilled to skilled workers, increased wages and also how income from agricultural activities have increased
after introduction of MGNREGA[1]. In the article, examined how the political reservation has been used to
analyze the effectiveness of women leaders in implementing programs such NREGA and it was found that
women leaders take up projects that provide direct benefits for women. It was also concluded that there were no
difference between male and female in employee generation[2]. This study is to understand the implementation
of MGNREGA in agriculturally backward and agriculturally advanced area in terms of employment, income so
as to understand their socio-economic status and also to identify the reasons for non-adoption of the program[3].
The study is on how the MGNREGA could have an impact on the economic scarcity of labour and the result
showed that the program provided those 100 days employment but bought a shortage of labour in agriculture[4].

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The article showed how the MGNREGA had an impact on employment, income and savings of the workers and
the result stated an increased percentage of the implementation of the program whereby increasing income in the
agricultural sector[5]. In the research study the role of MGNREGA in providing employment opportunities and
how it could help in allocating the fund and how these funds can be spent in different in rural communities in
order to generate employment and thereby attain rural development is studied[6]. The study conducted has
evaluated the differentiating impact of basic entitlements fulfilments with the extent of coverage of social
groups like dalits, adivasis, women and poverty alleviation and has came up with the result that there was a
steep increase in agricultural wage of women and a decline in female-male wage gap[7].

The article aimed to evaluate the socio-economic impact of MGNREGA on women empowerment, where the
risks faced by women due to the program are analysed. The study came up with the result that when compared
to the previous programs, there is an increase in income and expenditure of households[8]. In the study ,it
showed a decline in how the MGNREGA had a socio-economic impact on the rural poor in whom agricultural
labours and small farmers were included and it showed sufficient changes in the education level, per capita
income, savings of the households who work regularly for the program[9]. From the article ,the research studied
how the Information and Communication Technology (ICT) can be used to enhance the effective
implementation of MGNREGA in India, to overcome any obstacles while bringing together ICT with the
MGNREGA and also to provide support for the program in India[10]. In the research study it is argued that
MGNREGA has made no social transformation in the lives of women by redefining their roles with that of men,
even though the major objective of the program was women empowerment by experiencing their collective
strength[11]. In the research it is studied how the nutritional security and food consumption of households had
an impact on the implementation on the MGNREGA. It has revealed that the program has benefited with an
increased percentage to the workers and also was beneficial in alleviating poverty to an extent by providing
employment without any partiality[12]. The study, assessed the salient features of the MGNREGA and how
these features can be used to overcome the problems related in reference to Kerala and it also looked into how
the implementation of the program would lead to the socio-economic development of the nation[13]. The study
showed how the MGNREGA has been used to alleviate poverty by employing them for 100 days and it was
concluded that MGNREGA helped in raising the standards of the households thereby reducing poverty in the
State[14]. This research has pointed out that the participation of scheduled caste and scheduled tribe has made
the MGNREGA a success and also stated that even though the program is growing at a slow pace, its benefits
are seen as increased income and productive asset in villages[15].

IV. RESEARCH METHODOLOGY

Data was collected from Clappana and Kulashekharapuram panchayaths of Kollam district and Arattupuzha
panchayath of Alapuzha district. A total of 150 samples were selected using random sampling method. Data was
collected directly from the women participants of NREGA using survey questionnaire. Questions relating to
increase in savings, extent of repayment of debt and increase in social recognition were asked to evaluate the
socio-economic impact of NREGA. Questions relating to number of work days provided, facilities provided at
worksite, the promptness in addressing the problems faced at the worksite, were asked to evaluate the
effectiveness in implementation of the scheme. The analysis of relevant aspects were conducted using Chi-
square test and descriptive analysis.

V. DATA ANALYSIS AND RESEARCH

To have an insight into the overall educational and economic background of the workers, the following
questions were asked:

 Educational background of the respondents:

As shown in table A, majority of the respondents have very low educational qualification. Only 3 respondents
have educational qualification above higher secondary

Table A: EDUCATIONAL QUALIFICATION OF WORKERS

OUTCOME PERCENTAGE
BELOW 5TH LEVEL 29 19
5TH TO 8TH 35 23
8TH TO 10TH 58 39
HIGHER SECONDARY 25 17
DEGREE 02 01
POST GRADUATE 01 01

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 Whether NREGA is the only source of income:

As shown in table B, NREGA is the only source of income for 66% of the rural respondents.

Table B: whether NREGA is the only source of income

OUTCOME PERCENTAGE
YES 99 66
NO 51 34

The social and economic impact of NREGA has been analyzed by taking into consideration, the 3 main aspects
such as growth in the savings of workers with the income from NREGA, ability of the workers to repay debts
with the income from NREGA and the impact of NREGA on the social recognition of the workers. An attempt
has been made to evaluate the socio-economic impact of the NREGA, specifically on those workers whose only
source of income is the wages from NREGA. For this purpose, Chi-square test has been conducted to find out
whether there is an association between NREGA being the only source of income and the above mentioned 3
aspects of evaluation.

Table 1: Increase in savings of the workers with the income from NREGA and NREGA being the only source of
income.

Only source of income * Increase in savings Crosstabulation

Count
Increase in savings
Yes No Total
Only source of income Yes 97 2 99
No 20 31 51
Total 117 33 150

Table 1.1 : Chi-square test with HYPOTHESIS 1

Chi-Square Tests
Asymptotic
Significance (2-
Value Df sided) Exact Sig. (2-sided) Exact Sig. (1-sided)
Pearson Chi-Square 67.736a 1 .000
Continuity Correctionb 64.355 1 .000
Likelihood Ratio 70.195 1 .000
Fisher's Exact Test .000 .000
Linear-by-Linear Association 67.285 1 .000
N of Valid Cases 150

As shown in Table 1.1, there is a significant relationship between increase in savings of the workers and
NREGA being the only source of income (chi-square with 1 degree of freedom, p=0.000)

Table 2: Ability to repay debts of the workers with the income from NREGA and NREGA being the only source of
income.

Only source of income * Repayment of debt Crosstabulation

Count
Repayment of debt
No To some extent Completely Total
Only source of income Yes 23 73 3 99
No 44 5 2 51
Total 67 78 5 150

Table 2.1 : Chi-square test with HYPOTHESIS 2

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Chi-Square Tests
Asymptotic
Significance (2-
Value Df sided)
Pearson Chi-Square 56.489a 2 .000
Likelihood Ratio 62.248 2 .000

As shown in table 2 there is a significant relationship between ability to repay debts of the workers with
NREGA as the only source of income.(chi-square with 2 degree of freedom, p=0.000)

Table 3: Increase in social recognition of the workers with NREGA as the only source of income.

Only source of income * Increase in social recognition Crosstabulation

Count
Increase in social recognition
Yes No Total
Only source of income Yes 98 1 99
No 51 0 51
Total 149 1 150

Table 3.1 : Chi-square test with HYPOTHESIS 3

Asymptotic
Significance (2-
Value Df sided)
Pearson Chi-Square .519a 1 .471
Continuity Correctionb .000 1 1.000

As shown in Table 3: there is a significant relationship between Increase in social recognition of the workers
with NREGA as the only source of income.(chi-square with 1 degree of freedom, p=.519)

We have examined the effectiveness in implementation using five core aspects such as:

 Whether the workers are being provided with adequate number of work days. As shown in table 4,
only 24% of the workers have been provided with full 100 days of employment, while it is mandatory
that 100 days of employment is to be provided for those who register under the Act.

Table No 4: number of work days provided

OUTCOME PERCENTAGE
BELOW 25 19 13
25-50 39 26
50-75 30 20
75-90 26 17
90-100 36 24

 Whether the training provided to the workers before beginning a particular work is adequate
or not. As shown in table 5, 100% respondents are of the opinion that the training provided is
adequate.

Table No 5: satisfaction with training provided

OUTCOME PERCENTAGE
YES 150 100
NO 0 0

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 Whether the workers are fully aware of the allowances of the scheme. As shown in table 6,
100% of the workers are fully aware about the various allowances receivable under the
scheme.

Table No 6: Awareness about allowances of the scheme

OUTCOME PERCENTAGE
YES 150 100
NO 0 0

 Whether problems of the workers at worksite are addressed timely and effectively. As shown in table 7,
91% of the workers are of the opinion that their problems at the worksite are being addressed timely
and effectively.

Table No 7: Are the problems at work site addressed effectively and timely?

OUTCOME PERCENTAGE
YES 137 91
NO 13 09

 Whether the women workers are provided with crèche facility at the worksite. As shown in table 8, the
workers are not provided with crèche facility, which is provided in almost all the work sites in the
northern states.

Table No 8: Availability of creche facility

OUTCOME PERCENTAGE
YES 00 00
NO 150 100

VI. DISCUSSION

Table A and Table B gives a general idea about the educational qualification and the economic background of
the respondents. From Table A, it can be observed that there are only 2 women respondents with educational
qualification above higher secondary. Table B points out that NREGA is the only source of income for 99
women respondents.

From the economic point of view, we have found that NREGA has been beneficial in aspects such as growth in
savings, and repayment of debt. . NREGA is one of the main sources of employment for many of the rural
households in Kerala. As shown in Table A Since NREGA is the only source of income for 99 respondents out
of the total of 150 respondents. As shown in Table1, 97 respondents having NREGA as the only source of
income has been able to increase their savings with the income from NREGA, it is clear that NREGA has
played a pivotal role in the economic development of the rural population. From the Chi-square test conducted,
we have been able to reject the first null hypothesis that there is no significant relationship between NREGA
being the only source of income and the increase in savings of the workers. From Table 2 , it can be observed
that 73 respondents with NREGA as the only source of income, has been able to repay their debts atleast to
some extent. Since Asymptotic Significance (2-sided) =0.000 in Table 2.1, which is lower than 0.05, we rejected the
second null hypothesis that there is no significant association between NREGA being the only source of the
women workers and their ability to repay debts. As majority of the rural women has only very low educational
qualification, they are unable to find any other jobs to earn a livelihood. Even in the case of those who have
some other kind of occupation, it is not regular or available throughout a year. As the wages of NREGA are
directly credited to the bank accounts of the workers, it automatically becomes a kind of savings which can be
used by them to meet their necessities and support their families. From all the above-mentioned data, it is clear
that NREGA has been useful in providing adequate financial /economic support to its employees.

NREGA has provided an opportunity to the rural women to come forward, to work in a group, to increase their
group dynamics and acquire new skills. It has provided the rural women with more exposure to the outside
world. All these have in turn contributed to women empowerment. As sown in Table 3.1, since p=0.519, we
rejected the third null hypothesis that there is no significant association between NREGA being the only source
of the income of the women workers and the increase in their social recognition. NREGA has helped the rural

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women with very low educational qualification, to earn a livelihood for themselves, which inturn has helped in
increasing their social recognition and self esteem.

From the implementation point of view, we have found that there has been effective implementation of NREGA
by the panchayaths. As shown in Table 5, all the respondents are fully satisfied with the training provided to
them before beginning a particular work. As it can be observed from Table 6. all the respondents are fully aware
about all the allowances and benefits of NREGA. Since majority of the employees are of very low educational
qualification, it is the duty of the implementing body to take necessary steps to provide adequate awareness.
From Table 7, it is evident that 91% of the respondents are of the opinion that their problems at the worksites
are being timely and effectively addressed by the panchayaths. This fact also signifies the effectiveness with
which NREGA is being implemented by the panchayaths.

From Table 4, it can be observed that only 24% of the respondents are provided with 90-100 days of work. The
panchayaths should try to generate more number of workdays in order to enable the workers to derive the full
economic benefit of the scheme. The implementing authority should try to provide crèche facility at the work
sites, which will be very useful for women workers with kids at home. Steps should be taken to provide the
employees with enough training to take up skilled labour so that they can earn more wages.

VII. Limitations of the study

The present study has got certain limitations which actually paves way for future researches in this area. The
limitations are:

 We have considered only 150 samples. We recommend future researches using more samples so that
generalisations can be made.
 We have analysed samples from only from 2 districts of Kerala. Future researches can be undertaken
by conducting study in more districts/areas.

Reference

1. Prasanna, N, Natarajamurthy, P, Kurinjimalar, R, 2014, Socio-economic impact of MGNREGA in

Tamil Nadu, India
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program,
3. Usha Rani Ahuja, Dushayant Tyagi, Sonia Chauhan and Khyali Ram Chaudhary, 2011, Impact of
MGNREGA on Rural Employment and Migration: A Study in Agriculturally-backward and
Agriculturally-advanced Districts of Haryana, Agricultural Economics Research Review
4. P.S. Srikantha Murthya and S. Indumati, 2011, Economic Analysis of MGNREGA in the Drought–
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12. Praduman Kumar and P.K. Joshi, Household Consumption Pattern and Nutritional Security among
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