Indira Gandhi Institute for Development Studies(IGIDR), and the International Food Policy Research Institute (IFPRI) on ‘Harnessing Opportunities to Improve Agri-Food Systems’ on July 24-25 , 2014 in New Delhi. The two day conference aims to discuss the agricultural priority of the government and develop a road map to realise these priorities for improved agri food systems.

1. The MGNREGA in India
What does it imply for agriculture
and rural development?
Sudha Narayanan
(with Krushna Ranaware, Upasak Das
and Ashwini Kulkarni)
New Delhi, July 25, 2014

2. Background
• “MGNREGA has hurt agriculture”
• “Digging holes“ view of the MGNREGA
– Popular perception that assets have not been
created or that they are poor quality and hence
useless.
• Making MGNREGA work for agriculture
– At least 60% of the expenditure on works in a district
“directly linked to” agriculture (July, 2014)
Goal
To review current research and assess the
implications for MGNREGA for agriculture.

3. Outline
• The MGNREGA
• Conceptual framework for assessing impacts
• Assessing the assessments
– Reviewing the literature
– Survey from Maharashtra on the user perspectives
of the benefits and problems with the MGNREGA
works
• Implications for policy

4. The MGNREGA in India
• Minimum of 100 days of unskilled wage
employment per rural household, for adults
– Demand driven
– Equal wages for men and women
- Labour intensive. Labour material ratio is 60:40
- Must create “durable assets”
- Water conservation, Drought Proofing, Irrigation
facility, Land Development, Water harvesting, Flood
Control, Rural connectivity
- More recently vermiculture, livestock, many more

5. Which works are permitted?

6. Biomass
Soil quality
From MGNREGA to Agriculture
Inputs &
investment Adaptation
• Mechanisation?
• Cropping pattern
shifts?
Supply of
labour
Land levelling
Land & Soil
Livestock
Water availability
Connectivity
Water access
Wages
Work
Assets on
Private Lands
Public lands
Area cropped,
productivity,
cropping
pattern and /
or Incomes
Household

7. Existing Evidence
• Labour markets
– consumption impact positive. Effect has been seasonal and
for SC/ST & women (Klonner and Oldiges, 2014)
– Wages and private employment , welfare of top quintile
has been hurt in (Imbert and Papps, 2012, 13)
– General equilibrium effects (reduced migration (Das, 2014;
Imbert & Papps, 2013) increasing local labour supply)
• Farm response
– Adaptation has happened through mechanization of select
operations and in select size classes (Bhargava, 2012)
– MGNREGA participants increase input use for high return
crops because of the “insurance” through work (Gehrke,
2013)

8. Maharashtra Survey (Feb-Mar, 2014)
• Multiple components
– Verification Census of 4457 works
– User interview (4376 households sampled)
– Community questionnaire
– Administrative data (Government website)
• 20 districts, 20 blocks, 5 GPs in each block
• Complete asset verification
• Rule-based sampling of users. Two for work on
public lands (government / commons); one for
private lands
• Collaboration with agricultural colleges, funded
by Government of Maharashtra

9. Survey Area (20 blocks, 100 GPs)

10. What type of works?
• Regional variation in scale
and type of works.
– Wardha Nagpur
dominance of other works
– Pune Sangli Solapur
Ahmednagar land
development
– Latur, Gadchiroli, Gondia,
Parbhani & Thane, water
works
– Bhandara afforestation
• Owners and beneficiaries
• 161 hh benefit from
multiple assets
278, 6%
1,301, 31%
1,272, 30%
244, 6%
474, 11%
675, 16%
Afforestation
WC/WH on common lands
Land development on private lands
Horticulture
Rural connectivity
Other works

11. Who benefits?

12. How useful is the MGNREGA work?
34.41 32.9
63.52
31.3
51.66
79.29
51.27
51.61 56.97
32.19
49.59
41.29
13.61
40.38
9.68
7
3.2
14.23
4.98 4.44 5.84
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Afforestation WC/WH on
common lands
Land
development
on private
lands
Horticulture Rural
connectivity
Other works TOTAL
I do not care if it is useful to me or not Unable to say
Has been the worst thing that could happen to me Has made things worse for me
Not useful Somewhat useful
Very useful

13. How has your life changed because of it?
37.3 37.6
61.5
32.2
48.2
77.4
51.71
46.7
51.6
32.5
47.4
43.8
17.0
39.16
10.1
8.2
5.0
14.7
5.2 2.7 6.55
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Afforestation WC/WH on
common lands
Land
development
on private
lands
Horticulture Rural
connectivity
Other works TOTAL
I do not care Unable to say Much worse than before
Worse than before No change Somewhat better than before
Much better than before

14. Usefulness in what ways?
• Water Conservation and Harvesting
– Reduces wastage of water and runoff (72%)
– Timely availability of water for plots /protective
irrigation/control over water (69.5 %)
– Has increased availability of water in the wells in the
vicinity (69.5 %)
– Water source now closer (69.5 per cent)
• Connectivity
– Access to natural resources, fields (84%)
– Greater traffic to and from village (80%)
– Public transportation (79%)
• Land Development
– Expand area under cultivation (89 %)
– Higher yields
– Greater control over water

15. What is considered most useful?
– Water Conservation /Harvesting
– Rural Connectivity
– Afforestation/Land Development
• In majority of the cases, works were decided
locally in Maharashtra, but at various levels. In
contrast to other states that are top-down.
• Using MGNREGA asset as stepping stone.
– Highly or somewhat likely 83%
– Neither like nor unlikely 10%
– Somewhat or highly unlikely 7%

16. Among those who say works are not
useful, common reasons are
– Too early to tell (horticulture, afforestation)
– In poor condition (~30%)
– Incomplete (~20%)
– Faulty design (~30%)
Different across different works and regions.
– Implementation and oversight
– Limited local capacity

17. Quality and Condition
Percentage of households surveyed that said asset (is) in % Number of responses
Did not exist 2 4337
- of "acceptable /adequate quality'" 44
-"quite good" 37
- "excellent" 8
- "quite bad" 5
- " extremely bad" 3
- "better than" when constructed 71 4188
- "same" condition as when built 27
- "worse" condition than when built 3
maintained by owner 37 4188
maintained collectively by users 32
unsure 5
other (not maintained, no need to maintain, no
responses) 17

18. “the objective of asset creation runs a very distant
second to the primary objective of employment
generation...Field reports of poor asset quality indicate
that [the spill-over benefits from assets created] is
unlikely to have made itself felt just yet.” (World Bank,
2011)

19. Evidence on assets
• IISc Study (Rapid scientific measures) 2011, 2013
– reduced the vulnerability of agricultural production, water
resources and livelihoods to uncertain rainfall, water
scarcity poor soil fertility.
• Agarwal, et. al (2012)
– RoR 2.29-4.09% for Jharkhand wells.
• Tata-IWMI studies reported in Verma and Shah (2012)
– Additional water /protective irrigation leading to saving of
diesel costs
– Pisciculture
– Groundwater recharge
For a majority of assets, recovery is within a year of
completion of works.

20. Policy Implications
• MGNREGA promising instrument at the farm level
to cope with/ adapt to climate change
– Drought proofing and water conservation
• Possibly high returns on `investment’
• Convergence is working or not?
Policy focus: address “blindspots”
– Design and construction of works (the best is good,
can the bad get better?)
– Rationalize types of assets (e.g., wells, bori bundh)
– Mind the gap! (e.g., financing MGNREGA
beneficiaries, market linkages.)