The evolution of social safety Net (SSN) in India that started with the notion that a focus on growth was not enough because it left out those outside the market. Jawaharlal Nehru’s regime had set a target of 7% growth for India, but it wasn’t enough to reach out to everyone, hence they started targeted programs for poverty alleviation. Robert McNamara, former President of the World Bank, took up this idea and introduced global anti-poverty schemes in the agenda of the Bank. The difference today was that poverty alleviation programs had to go beyond being mere entitlements and move on to a rights based model. SSNs are required in india that has risks and where people are vulnerable to exogenous, random shocks. This could include people of all classes, even though the poor are most vulnerable. However, SSNs are meant to protect people from random shocks, whereas, most shocks are systemic and not always random. Economic reforms in this context are meant to bring in structural changes to usher in greater efficiency in the economy. This structural change could make certain populations vulnerable to risk. Thus these people need protection through SSN, especially in developing countries where there is an atmosphere of constant economic change. The immediate purpose of NREGA is to overcome deprivations faced by households by providing them work at guaranteed wage rates, the larger objective of the act was to address the social and power relations in the society. However NREGA has been faced with problems both at the implementation and policy levels. Problems like unavailability of the provision of work on demand, creation of unproductive assets, problems in wage calculations and payments, unscrupulous grievance redressal through social audits, access for all etc, but also in the form of the incentives it provides have not been able to counter the gigantic impacts on Neo-liberal policies in the labour market. There also has been a parallel rise in unemployment which has created a growing reserve of cheap and unorganized labour that can be used as per market terms and conditions. NREGA can also be seen here as an opportunity to organize these unorganized masses that find alternative sources of income through the NREGA programme and broaden our struggle. Since women form an essential part of the labour force that is engaged in NREGA works in most of our areas, it becomes essential to understand the problems they face with respect to the implementation of the programme as well as whether their participation can be used as a base to ensure the formation of an organization/ association that furthers their empowerment as a paid workforce and as unpaid labour in the domestic and social sphere. This paper traces the history of the act, critically analyzing its role as a social safety net. It presents an argument that public safety nets in themselves are not the only way forward towards securing the rights of the masses. It also explores the roles played by various actors like NGOs, trade unions, people’s organizations in providing a prolific partnership towards fulfilling the larger goals of the programme.

Key Words: NREGA, SSN, Safety.


The Social safety net concerned an extensive range of factors, having academics, social movement activists, political parties, trade unions and bureaucrats. Civil society has also been integral to the program’s design. Strong political willingness, huge public support and a strong empathy for the poor played a vital role in forming policy into legislation and attaining sustainable domestic funding. SSN, are non-participatory transfer programs ensuring to prevent the poor or those susceptible to shocks and poverty from declining lower than a certain poverty level. One of them is Cash transfers which are defined as the provision of support in the form of cash to the poor or to those who face a possible risk of falling into poverty if there will be no transfer. The basic motto of this initiative is to raise poor and susceptible households’ real income. Food-based safety net initiatives provide enough consumption and help in improving nutrition. Subsidies guarantee access to indispensable commodities at fair prices that one can afford. The rationale for using subsidies is based on the potential to shift consumption as well as on low operating costs as beneficiaries are not administratively targeted. Public works programs give unskilled workers with temporary labor-intensive manual jobs during lean periods. Public works can include road construction and maintenance, check dam construction, water harvesting and soil conservation. The impact is two dimensional: to increase income of the poor and creation public assets. The fee waivers, exemptions, and scholarships is to provide poor people with the financial resources to use public services like in education and health facilities. These systems are targeted to a focused group of people that would not have access to these services otherwise.

National Rural Employment Guarantee Scheme (NREGA), which now has been re-named as Mahatma Gandhi NREGA (MGNREGA), started in September 2005.The main aim of this scheme is to enhance livelihood security in rural areas by providing at least 100 days of guaranteed employment and wages, in a financial year, to every household, whose adult members volunteer to engage in unskilled manual work. The scheme is providing a strong social safety net for vulnerable groups, by providing a fall-back employment source, when other employment alternatives are scarce or inadequate. The Act seeks to strengthen the natural resource based on rural livelihood and create durable assets in rural villages. Initially, the scheme was notified in 200 districts in the first phase in 2006, and then, it was extended to an additional 130 districts, in the financial year 2007-2008.According to the scheme, adult members of a rural household, willing to do unskilled manual work may apply for registration in writing or orally to the local panchayat. The gram panchayat after due verification, will issue job cards.


To measure MNREGA as a social safety net for the poor.

To make critical analysis of MNREGA in Indian perspective.

To make a cost benefit analysis of MNREGA in recent past.

To analyze the extant up to which MNREGA providing social security and safety.

Literature Review:

The Indian government has a long history of social safety net interventions, dating back to before Independence in 1947. India is the only country in South Asia where, theoretically, 100% of the poor are targeted by either national or state-led social assistance programmes.1 In 2000, the poverty headcount in rural areas was highest among Scheduled Castes (SCs) and Scheduled Tribes (STs) – 45.8% and 35.9%, respectively –compared with 21% among non-SCs/STs.2  MGNREGA is one of the government’s flagship programmes within the overarching national development strategy, the 11th Five-Year Plan 2007-2012).4In 2009/10, over 43 million rural households received work, although implementation of MGNREGA varies widely between states. In Rajasthan, a total of over 344 million person days have been created, in Uttar Pradesh over 248 million and in Tamil Nadu over 222 million. Overall, however, only a national average of 7% of households employed under MGNREGA completed 100 days of work. 1 Baulch, B., Weber, A. and Wood, J. (2008) Social Protection Index for Committed Poverty Reduction Volume 2: Asia. Manila: ADB.

5In Rajasthan and Tamil Nadu, for instance, the proportion of women receiving days under MGNREGA was much higher than the national average, at 64% and 78%, respectively; in Uttar Pradesh, it was much lower, at only 14%.6in Andhra Pradesh, MGNREGA has reduced household vulnerability to external shocks and allows households to smooth consumption 7 and a study from Nuapada district in Orissa, where communities are highly dependent on forest land, found that 43% of the community felt that the availability of fuel wood and /or fodder had increased due to MGNREGA works.8

Furthermore, income from MGNREGA supports households to meet health expenses – one of the key drivers of poverty in India.9  A survey from six states in northern India  found that the majority (57 per cent) of the sample workers had used a part of their wages to buy medicine or treat an illness in the family.10In Andhra Pradesh, 13% of household earnings from MGNREA are spent on health security.11 In Andhra Pradesh 18% of household earnings from MGNREA is spent on education.12 Children are also more able to go to school because of the improved road connectivity generated under the public works.13Reductions in child labour and improvements in child health have also been noted where parents are MGNREGA participants.14

Methodology and Tools of the Study

Data Collection

Data for this research was collected through census data and survey report. A pilot survey was undertaken to identify the research problems and tools. The questionnaires were developed from the existing literature and self-created through the pilot survey. In the sampling stage, systematic random sampling, one of the probability sampling methods is used,


Census data show that between 2001 and 2011 India’s rural population decreased from

72 percent of the total to 69 .Given that rural areas have a higher fertility rate than

Urban areas, 3.2 and 2.2 children per women, respectively, the decrease in the rural population is likely due to rural-urban migration.

Table 1: Rural-urban population distribution in India

Distribution 2001 census 2011 census
Rural 72 69
Urban 28 31

Source: Ministry of Home Affairs, Government of India. 2001 and 2011 Census data retrieved from

MGNREGA is expected to have a large effect on migration, as rural workers have a

Guarantee of 100 days of employment close to home and therefore have less of an incentive to move to the cities.

  AVG 2006-07 AVG2009-10 RANGE2009-10
WOMEN 40 48.1 6.7-88.2
SC 36 20.7 0-100
ST 26 30.52 0-79
PERSON PER HOUSEHOLD 43 54 18.8-94.6

Average number of person days (work days) per household has increased since 2006-07,

From 43 to 54 days, but still remains well below the guaranteed 100 days. Although government data say around 99 percent of workers who demand jobs through MGNREGA get one, reports and interviews made by journals such as The Economist and The Wall Street Journal tell stories of disempowered workers not getting jobs, while friends and relatives of employment list administrators find jobs easily. Additionally, knowledge about the program and worker’s rights is low in some villages and it is likely that the average number of person days per household would be higher if all villagers were well informed.


NREGA is a landmark legislation that has been made as; it is a step towards the realization of wage employment as a right, providing a right to work and thus a right to life with dignity. It is also expected to enhance people’s livelihood on a sustained basis, by developing the economic and social infrastructure in rural areas. The Right to Information Act is supposed to act as its guardian and ensure transparency in the implementation of NREGA. Several studies have proved that this act has not only enabled generation of productive assets but has also led to higher food and income security for landless workers and other vulnerable sections of the rural poor, protecting environment, empowering rural women, reducing rural-urban migration and fostering social equity etc.

The MNREGA in general aims at:

  1. i) Providing an insured income to poor rural households;
  2. ii) Preventing distress migration; and

iii) Accelerating the growth of rural economy by developing crucial infrastructures.

The MNREGA in specific establishes the right of rural workers to:

  • payment of wages
  • equal wages for equal work
  • Minimum wages or the nationally established floor wage of Rs. 60 per day.
  • A 7-hour workday and a weekly day-off
  • A crèche, for children accompanying parent
  • Medical facilities and compensation, in case of worksite accidents
  • Unemployment benefit, if no work can be provided
  • Information, regarding every stage of the implementation of the Act as provided under the Right to Information Act and through the provision of public/social auditing processes.

Thus for the first time, rural communities have been given not just a development programme, but also a regime of rights. The security of the additional income to the rural workers provided by the NREGA will strengthen their bargaining power, which in turn will make it possible to raise the urban floor-wage of unskilled workers. Since the provision of work under the NREGA is demand driven, the creation of a sustained demand depends highly upon the unifying capacity of the people who want to work under this programme. The Act thus becomes a potential weapon to effectively accumulate the organizational strength of the rural poor to constantly demand for work thereby possessing the ability to bring about a change in the existing labour situation in the country. The MNREGA should consequently trigger labour intensive growth for the economy by the generation of assets that in turn generate employment. The Act strives to fill up the lean four non-agriculture months that an average Indian rural habitant faces. Though the Act doesn‘t limit the guarantee to any period, it is assumed that people will demand works only during the lean season.


Social security nets remains pertinent to the broader poverty reduction strategy of a country and can be provided by the public sector (the State and aid donors) or by the private sector (NGOs, private firms, charities, and informal household transfers).The most common safety net intervention includes: cash transfers, food-based programs such as supplementary feeding programs and food stamps, vouchers, and coupons, in-kind transfers such as school supplies and uniforms, conditional cash transfers, price subsidies for food, electricity, or public transport, public works, fee waivers and exemptions for health care, schooling and utilities. If placed in this background the MNREGA fits aptly into the definition of a public safety net. One finds that under the act wages are to be paid on a weekly basis, whether through the Gram Panchayat, the Post Office or through the banks, the information related to this is available to the public. A delay in wage payment entitles the worker registered under this Act to compensation by the State Government, as per the provisions of the Payment of Wages Act, 1936. If an individual is willing, the State Government may merge the pay with social security arrangements, earmarking a portion of wage to schemes such as health insurance, accident insurance, survivor benefits, maternity benefits, and other social security arrangements. But seeing MNREGA in an objective light brings about the fine contradictions that entail this view of a public safety net programme. Questions that arise are that whether the payment of this minimum wage as stipulated in the Act, would build a pressure on the wages actually paid in the rural sector for other works as well? The provision of un-skilled or low-skilled wage work at a rate higher than that paid in the informal labour market prove to affect the wages in the informal labour market too? The provision of creation of assets as per demand, take into account gender concerns and those who are socially disadvantaged? Will the potential of the MNREGA to provide for an opportunity to organize rural workers be able to fulfill the larger objective of the decentralized Panchayati Raj system of being a people‘s power/governing system too? Also will it be able to organize the women who stay back in the villages while the male members of the family migrate in search of work, to have a greater control in the productive and reproductive sphere of their social, economic and domestic life?


The history of labour spells exploitation in the Indian context. MNREGA was also hailed as a revolutionary act, as it fixed INR 60 as the minimum wage for rural workers. It was believed that this fixing of minimum wage would also transcend into other works, thereby leading to an upward push in the wage structure of agriculture and allied activities and also in the informal labour sector. But if reports are to be believed then, MNREGA itself has not been able to pay the promised minimum wage to the workers.

Instances of irregular and delayed payments too have been reported from several states. Many a times the laborers are asked to undertake new work without the clearance of former dues. Moreover, the payment process also forms a complicated process with the transaction done through banks or Post offices which creates a lot of problems for the rural illiterate folk. MNREGA also seeks creation of infrastructure in the form of natural asset creation inclusive of soil and water conservation in the rural areas. In many villages one can see that there has been immense development especially in the case of connectivity, but in many more, the case is otherwise, where it has been found that it has instead helped asset creation of private wealthy individuals. MNREGA is all about offering unskilled work, which does not add on any additional skills on women, only adding to the existent burden of work on them. Apart from a few success cases, where women have comparatively been able to achieve significant economic independence, MNREGA has not been able to bring about significant changes in the power relations between men and women. Social audits have also found inconsistencies between the number of job cards issued and the number of people working, indicating that local officials are inflating the number of workers and pocketing the funds Part of the reason why malfeasance takes place with MGNREGA is that the central government relies on state governments to comply with its operation guidelines, and it does not monitor how state and local governments are conducting the scheme. This arrangement leaves MGNREGA vulnerable to corruption and other irregularities. Corruption limits the impact of anti-poverty programs and taints their credibility, and unfortunately this is nothing new to India and for which measures are to be taken as early as possible to make this program more effective.


The government of India designed and implemented several issue based programmes aimed at rural development. But no programme gave a legal empowerment of benefit like MGNRGA. It only create employment and generate .income but also help in creation of productive assets. From the study we came to a conclusion that there are varied positive impact of MGNREGA relating to employment, consumption, migration, health, education, social restructuring employment of women and social deprived section of  rural areas. It also enhances the rural livelihood and ensures rural food and income security for the landless poor. It also protects the environment, increase the standard of living and foster social equity. So, it is an effective fall back employment option in the lean period of agricultural production. It is from the cost benefit analysis there are still remain huge bottlenecks in the proper and timely implementation of the program interventions. Problems like corruption, delayed payment, presence of ghost beneficiaries are becoming major impediments in the way of its success. However in these short span of its functioning the remarkable performance of MGNREGA established it as a very effective social safety net. Thus it is not panacea for all the problems of rural people but it will definitely help to address chronic problems like poverty, migration, food security, women empowerment, productive asset generation and in a more broad sense will help in sustainable rural development.



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[1] Sri. Rajesh Kumar Sain, Associate Professor, Of Business Administration, Ravenshaw University

[2] Mr. Jaya Prakash Rath Sr. Lecturer, Dept. Of Business Administration, Ravenshaw University