NREGA - a perspective

A First-Hand Experience of NREGA at a village on the international border in Rajasthan

Distance perpetuates poverty. As I travelled from the centre of the Sriganganagar district in Northern Rajasthan to the fringe, that is what I discovered - a parallel movement of the people working under NREGA from the centre to the fringes of their economic landscape.


The MGNREGA under the National Rural Employment Guarantee Scheme is indeed a commendable act. Every family in the specified rural areas, measured by the number of chulhas serving a group of people is entitled to 100 days of assured employment within 5 km of their house. I chose to survey two NREGA sites in the district on the basis of the diversification of work in these areas and to record the work progress and gauge the success rate.


The first site we surveyed was Mirzewala, 12 kilometres from Sriganganagar where the road widening work was in progress from 16.06.2011. The road I was told was a State Highway. The labor force of 65 comprised of mostly women, not very young. A possible reason was the job card. Since each family is allotted one job card, workers may choose to complete their stipulated 100 days of work in turns with their family members – each member in a family of four could contribute 25 days of work working together or in different shifts over the year. The NREGA in Rajasthan where the minimum daily wage, right now is Rs 119 thus promises a wage of more than 10,000 per year to every family (contingent on the task performed by the group under the group system). However the wage as we enquired first hand from the women laborers at this site varied from Rs 90 to Rs 100. NREGA permits wage payments on daily rate as well as on piece rate. Since Rajasthan has followed the piece rate system – wages are paid in proportion to the work performed; earning the minimum wage requires completion of the prescribed task for the group.


The rest 265 days of the year, the source of employment for the section of people is agriculture which by its basic nature is seasonal in nature but promises a daily wage of Rs 60-70 for each laborer. NREGA has undoubtedly raised the wage income of the people during the period of agriculture off-season (non-sowing and non-harvesting months). Direct personal interview with the laborers here revealed a significant level of contentment at the wages received which had improved their living although no assets had been created using the additional income.
The progress towards the second site at Sangatpura located right at the international border through the desert landscape was a drive towards an economic desert. No toilets, no pakka houses, no implements supplied by the NREGA reached the region.


Poverty has become such a mechanical term in textbooks and classroom discussions. The abstract version of the term was what I saw in the eyes of the people here. Some of the ladies started crying as truth slowly started emanating out of some feigned responses by the bunch of old ladies here. I was surprised to see the change in their tone as the Sarpanch joined us. They veiled their faces and replied rather laconically thereafter. Only some brave old ladies took courage and spilled the beans.


The heart of the matter, as it came up was that much of the consumption expenditure gets drained into feeding their alcoholic husbands. They were also victims of domestic violence by the husband.


“Bachat karte hain aap?” I asked amateurishly.


They looked at each other and smiled at the irrelevance of the question – There are no savings, the income ends in feeding the family and does not translate into assets. “Paise aande baad cha a, asi tan pehla kadhaan nu karde haan”, I was told in a Punjabi accent. (We desperately wait for them to credit our account with the fortnightly wage, which we withdraw completely right off the bat).


So while the policy framed by the government is excellent, its promulgation is smooth, this is where it ends in the end. The social complexities in a region where illiteracy is rampant clog the channels for economic development. It ends in the pockets of their alcoholic husbands; drug addiction among the male members eats up the wage that is earned. While the constant and reliant stream of income from NREGA will help them survive, I have doubts if it will lift them above the poverty line.


As per the act, the wage should be transferred within 15 days into the accounts of the laborers, the villagers told us sometimes it took about 2 months for the transfer to occur and that the bank was far – it took a “hefty sum of Rs 5 to the bank and back”.


The survey of the border regions at Sangatpura and Sahibsinghwala presents a paradox. While the NREGA implements are not reaching the area, the laborers are bringing their personal implements to level the ground which banks the H5 minor distributary – there is easy availability of rivers of alcohol. The statistics are encouraging, the work is encouraging but the condition of the laborers is not. You find a disproportionate number of ladies working on the sites, a cursory inspection of their pale hands and nails points to their anemic condition. While the nurse appointed visits the site regularly, she can do little to save them from the beatings of their drunken husbands.


As a first year economics undergrad student who was on her first ground visit, I discovered how these laborers could not be crystallized into mere statistics I was holding in my hand. The dupattas of the women laborers wet with tears had tales to tell while I could just be a mouthpiece of their woes.

Incentives and Education

I was always fascinated by the concept since the day I read about it. People respond to incentives. It is easy to end it with a full-stop there acknowledging the veracity of the fact and accepting it as gospel truth. It is only when you bump into the dividing line between the good and the no-so-good incentives that you feel the need to question. More than anything, the unease stems from the dehumanized, asocial and antiseptic worldview that economics as a discipline resorts to sometimes.

One particular occasion when I was incensed was when I read Mankiw’s views on education in the chapter on earnings. So why do people study and why do they spend so much on education?

There has to be an incentive.

And my book said the incentive was money. That was harrowing. I remember venting out my ire and discontentment on a page in my diary. Isn’t it cheapening of the entire concept of education by relating it with pecuniary objectives of profit maximization?

On one side, I found myself philosophizing on the ‘purpose’ of education in Dr. Gabriel’s English class and here the discipline I loved spelled out ‘purposes’ like those. It all seemed to imply that:

I was studying economics so that I could earn for myself tomorrow, and that if the prospects of earning for an economist were nil, I would not be studying economics.

What the hell!

I was critical of this view on education (although I read about the human capital view which chimed with my thoughts) until the following happened.

The first day, my friend Geetika and I went looking for kids to teach, we spotted a construction site with a lot of migrant laborer families residing there along with of course, a lot of their (non-enrolled) kids.

We called them out in the park, made them sit for some ice-breaking éclair session. I perfunctorily asked them their names and then raised a question.

“ Batao, humhe parhna kyon chahiye?”, I asked in an innocent voice pressing them to think for themselves.

A little girl (whose name escapes my memory right now) rose and answered in a squeaky voice,
“Kyunki, parhne se ‘payysa’ milta hai”
The way she stressed on the word ‘payysa’ in her native accent, it struck a chord.

I found bells ringing. She was not enrolled in a school and surely Mankiw couldn’t have whispered that into her ear or crossed her dreams last night.

The phenomenon was universal. I learnt vital lessons.

1. Just because I thought in a certain way did not imply that the world too thought on similar lines. In short, my personal views could be illustrative but not exhaustive.

2. It isn’t an economist’s business to judge about the morality of rationality. In fact rationality itself as Hume remarked is a ‘slave of passions’.

3. ‘Tis true that had it not been for incomes, some people indeed might not have gone to school and also that this is a well known fact.

So if education is sought for such bright incentives as seeking higher future incomes, does this imply that the poor in our country are irrational?
Why does the government have to entice the poor with mid-day meals and scrapping school fees under the RTE? Isn’t wage an organic incentive already?

Perhaps, the answer to the question no. 1 is YES. The little girl can earn more in the future even in present discounted terms that she could earn today as a domestic help in a 'kothi'.

But the hard truth is that ‘FUTURE’ is a vague term and that earning in the present is always more lucrative than tomorrow’s since that ‘tomorrow’ is so uncertain. Do you know the reason why people are lax about sustainable development despite such awareness campaigns and why the Copenhagen summit was a fiasco? I have found it. It is because sustainable development concerns concern for ‘future’ generations and future, as I said is so vague a term.

The solution in my view is that the incentive in all such cases has to concern THE INDIVIDUAL HIMSELF (since self-interest rules) and that too in the PRESENT, to be effective.
Development has to concern the present generation first to be sustainable. Education has to lure people today, to be universal.

The incentives in education, I believe have to be somewhat like Kerala, where kids get to carry bags of rice and wheat home from school for use of the entire family. Education in short promises income in kind today apart from income in cash tomorrow.

Aren’t those truly intelligently-crafted-incentives.

Correlation, Causation and superstitions

The chapter on correlation in my statistics course ended with a note which stayed with me for long. After learning all about the wonderful tools of regression and correlation, there I was presented with a WARNING : CORRELATION SHOULD NOT BE CONFUSED WITH CAUSATION.

Just to give you a flavour of the science I had learnt, correlation makes one capable of establishing if two variables move together in a particular direction. A positive correlation between say, population growth and pollution implies that when any one of the two variables increases, the other also increases since the variables are positively correlated. Yet this does not by itself imply that any one of them CAUSES the other. If X and Y are positively correlated, X may be causing Y, Y may be causing X or it may just be possible that both X and Y are being caused by a third exogenous variable!

A kingdom was once plagued by a pandemic that claimed a zillion lives. Tense, the king ordered a statistical enquiry. The statisticians presented the data - more the no. of doctors in the kingdom over the days, more is the occurence of the disease. The king took this relation of correlation for causation and ordered all the doctors in the kingdom to be executed!

Now lets apply the lesson - why do people believe in superstitions? A cat crossed the road before them, its a bad omen - they say out of experience. So if a sweet little pussy cat decides to cross the road just exactly when our jinxed hero steps out of his house, it makes him anticipate failure in his exam or the interview ahead. What explains this seemingly irrational and undoubtedly foolish viewpoint? Well, my theory goes thus. In the 'good' old days, it might have happened that in a good number of cases that the correlation between the 'crossing of a cat' and the 'occurence of failure' turned out to be positive, but people mistook the correlation for causation and concluded "Hence, the cat CAUSED the failure"!!!

Paul Samuelson listed something called a 'Post Hoc Fallacy' right at the beginning of his classic 'ECONOMICS'. The fallacy goes thus - If event Y follows event X, then you implicitly assume that Y was caused by X. If I sneezed before I slipped from the stairs, then the sneeze caused me to trip.

I guess our society needs to learn just a simple lesson and all the claptrap about black threads, wearing stones, reading horoscopes shall see the light of rationality.

P.S. If while reading this blog, lets say you slip off your chair ... kindly don't conclude that I caused it :P heehee :)