India’s National Rural Employment Guarantee Act (NREGA)

1. INDIA’S
NATIONAL RURAL EMPLOYMENT
GUARANTEE ACT 2005
Reetika Khera
November 2011
Brasilia 1

2. Employment Guarantee and
the Right to Work
a step towards the right to work, as an aspect of
the fundamental right to live with dignity
Article 39 of Directive Principles of the Constitution:
The State shall, in particular, direct its policy
towards securing—
(a) that the citizens, men and women equally, have the
right to an adequate means of livelihood;
(b) that there is equal pay for equal work for both men
and women
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3. NREGA in a Nutshell
The National Rural Employment
Guarantee Act 2005 is a law whereby:
any adult who is willing to do unskilled
manual work at the minimum wage
is entitled to being employed on local
public works within 15 days of
applying.
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4. The Unemployment Allowance
If employment is not provided within 15
days, the applicant is entitled to an
unemployment allowance:
At least one fourth of the minimum
wage for the first 30 days.
At least one half of the minimum wage
thereafter.
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5. Workers Entitlements
 Demand-driven, 100 days/household/year
 Payment of minimum wage, within a
fortnight
 Worksite facilities: water, shade,
medicines, crèches
 At least 33% of labourers should be
women
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6. NREGA: Cost sharing
 Central Government to pay for:
 wage costs,
 75% of material costs, and
 some administrative costs.
 State governments to pay for:
 25% of material costs
 other administrative costs,
 unemployment allowance.
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7. NREGA - The larger vision
 Social security, protection against hunger
 Right to life with dignity
 Asset creation in rural areas
 Unique opportunity for women
 Revitalizing local government institutions
and decentralized planning
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8. Asset creation under NREGA
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10. NREGA: Employment Generation and
Expenditure, 2007-8*
Total:
• Employment 144 crore person-days
– Expenditure Rs. 15,857 crores
– Expenditure (as % of GDP) < 0.5%
• Employment per job card: 22 person-days
• Employment per rural household: 42 person-days
employed on NREGA
• Expenditure per district: Rs. 48 crores
* Data pertains to the 330 districts covered under NREGA at the time. 10

11. Share of Disadvantaged Groups in
NREGA Employment
• Women: 42%
• Scheduled Tribes (ST): 29%
• Scheduled Castes (SC): 27%
• SC/ST Combined: 56%
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12. NREGA workers belong to the most
disadvantaged social groups
Proportion (%) of sample workers who are:
Men Women
 SC/ST 71 75
 Illiterate 52 82
 In “kachha” homes 81 81
 Without electricity 77 62
Source: Drèze and Khera (2009). 12

13. Minimum wages: getting there…
Men Women
(Rs./day)
 Agricultural wages 53 47
 Other casual labour 71 53
 NREGA wage* 85 85
 Minimum wage* 88 88
* Unweighted average of worksite-specific figures.
Source: Drèze and Khera (2009). 13

14. The Challenge(s)
 Political will vs politicization
 Awareness levels
 Delays in wage payments
 UID-type of disruptions
 Administrative capacity
 Corruption
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15. Awareness levels are still very low
Proportion (%) of sample workers who were
aware of their entitlement to:
 100 days of work 52
 Minimum wage 56
 Timely payment of wages 56
Source: Drèze and Khera (2009). 15