MNREGA and Poverty Alleviation: Case from Andhra Pradesh

Andhra Pradesh was perceived as one of the best performers in the country in MNREGA with its unique implementation arrangements.
by CH. Ravi Kumar
June 04, 2015: A man makes bundles of dry grass at a temporary shelter in Denganmal, Maharashtra, India. [REUTERS/Danish Siddiqui]


The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was enacted in 2005 with the main objective of enhancing livelihood security of households in rural India by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. Creation of durable assets through works like water conservation and harvesting, drought proofing, providing irrigation facilities, land development, flood control, road construction, etc., that strengthen the livelihood resource base of rural poor is also stated as an important objective of the scheme (Ministry of Rural Development, 2006). The annual expenditure on MNREGA Scheme, implemented in all the states, is around Rs 400 billion (US $6.7 billion) and covers about 80 million workers. In the wake of completion of 10 years of its coming into existence, it is appropriate to review its role towards alleviation of poverty of certain marginalised sections in the rural areas. While the effects and achievements of this legislation are multi-fold, this paper focuses only on the impact on rural agriculture workers with marginal holdings in the erstwhile, undivided state of Andhra Pradesh (AP), which is now divided into the states of Telangana and Andhra Pradesh from June 2, 2014.


Study Methodology

This paper is based on the compilation and analysis of information, data, observations, opinions and case examples from multiple sources till 2014. Primary data related to profiling of job card holders was used from four selected villages in four districts, i.e., Tamarapally in Visakhapatnam, K.N. Palem in Anantapur, Chowderpally in Mahabubnagar, and Devennapet in Warangal district. Perceptions and processes of change were captured through focussed group discussions with landless workers, small and marginal farmers, and other stakeholders from these villages. Household-level impact documentation was made from interactions with several households from various places in the state, of which a few selected case examples were presented.



Andhra Pradesh was perceived as one of the best performers in the country in MNREGA with its unique implementation arrangements (Dreze, 2008 and Khera, 2011). The salient features of implementation systems in AP were, an extensive and innovative use of information technology; a Rural Standard Schedule of Rates (RSSR) based on work-time motion studies; institutionalisation of an independent and regular social audit process; specific payment process schedule and compensation system for delayed wages; automatic payment of unemployment allowance to the workers in cases of failure to provide wage employment within 15 days of work application; promotion of organisation of workers in the form of Shrama Sakthi Sanghas (SSS), and partnership with civil society organisations, etc. Other key innovative features are: Prioritising works on the lands of Scheduled Caste (SC) and Scheduled Tribe (ST) communities, preparing village-level Natural Resource Management (NRM) plans, introducing new technologies like e-musters, and mobile-based monitoring.

With the above key features, MNREGA has been widely made accessible to the rural workers in AP, which is reflected in the performance indicators related to the number of registered workers, number of days, and number of works completed and assets built, which are relatively impressive when compared to the progress in other states. There are also some limitations in terms of enforcing the provisions of unemployment allowance, timely wage payments, and compensation for delayed payments, etc.

The Scheme has been in implementation in 69,071 habitations of 21,862 panchayats in 1,098 mandals of 22 districts in the state. Out of around 25 million registered workers belonging to 13.5 million households, 18.9 million individuals (around 75 percent) of 9.4 million households accessed wage employment in MNREGA up to 2013, since its inception in 2006. These figures indicate the coverage of most of the agriculture workers, whose number stands at around 17 million in the state as per the 2011 census, as well as significant number of cultivators or other categories of workers in the rural areas. Out of the total participating in the scheme, 10 million workers (53 percent) are women. Workers belonging to SCs are 4.8 million, and STs are around 2.6 million. Together SC and ST workers constitute nearly 40 percent of the total, which is higher than their proportion – around 24 percent – in the total population.


Benefits and Their Impact

In terms of benefits, a landless agricultural worker household can secure a maximum income of Rs 20,000 (US $300) in a year from MNREGA in the form of wages at current daily wage rates in AP, whereas a small and marginal land holder can secure benefit of up to Rs 100,000 (US $1,675) in the form of investment in addition to yearly wage income of up to Rs 20,000. A major part of investments from MNREGA have also been made directly or indirectly for the benefit of small and marginal farm holdings, particularly of SC and ST families. Development of individual fallow land and land under cultivation together constitute around 25 percent of the total expenditure on MNREGA works in AP Other major expenditure is related to the development of water resources, common lands and other works which also contribute to increasing productivity of the farmlands. Taken together, these constitute around 75 percent in number of the total MNREGA works as well as expenditure, which amounts to around Rs 200 billion (US S3.35 billion). The positive impact of MNREGA investments on farming, land and water resources development is well established by field research by the reputed institutions like Council for Social Development, Indian Institute of Science (Bangalore), KPMG, NIRD, Sambodhi, etc., which is also the case in the study villages.

June 15, 2015: Farmers plant saplings in a rice field on the outskirts of Srinagar in India.   [REUTERS/Danish Ismail]

The combined impact of wages and investments on small and marginal farmers has led to enhancement of their income and asset base and has also contributed to sustainability and profitability of their agriculture. Field-level findings and innumerable case studies documented by independent sources as well as the Department of Rural Development, GoAP establish the transformation of majority of the workers who have land, from agriculture workers to farmers, both materially, socially and psychologically, even in villages with below average level of implementation of MNREGA (GoAP-2012, KPMG-2012, Kumar-2014). Further, given their asset profile, this benefit triggers a wider chain reaction enabling the household to move up to the next level in the livelihoods ladder.

This can be captured from the experiences shared by a group of small and marginal farmers of SC community of Chowderpally village. “The present means of our livelihood are agriculture in own lands, wage employment in MNREGA and in others farms, in that order of priority. The importance of MNREGA is that it provides cash income in significant amounts periodically and at crucial times to use for farm investments for Kharif season. We get 2,000-3,000 rupees at once in contrast to small amounts of 100-150 rupees of daily agriculture wage income. On an average each family is earning 7,000-8,000 rupees in a year from MNREGA. Some families are even earning more than 10,000. As a result of this, the dependence on local money lender for small consumption and investment needs has reduced to a significant extent. Because of MNREGA, we have cut down participation as agriculture labor in other’s lands to around 50% and are able to concentrate and spend more time on our own agriculture. Through MNREGA an average investment of rupees 10,000 to 20,000 was made in our lands which helped to bring them into cultivation and improve the quality. The works that were taken up mostly are farm bunding and silt application. Now, mostly the persons who are indebted go to do farm work in the lands of respective lending farmer-cum-landowners involuntarily, whereas others are going on their own choice and terms. In this process, mutual exchange of labour has increased among small and marginal farmers, balancing the increased labour costs.

This enabling condition of MNREGA for the landed worker households and factors of unreliability – associated with the implementation of the scheme for the completely landless households – because of its unsure nature, limited employment opportunity and delayed wages are reflected in the higher participation of landed households than the landless agriculture labourers in the selected four villages. The number of households that have accessed MNREGA is more in the villagers where the landless households are very less and vice versa. The above findings are also supported by a comparison of agriculture worker population (Population Census, 2011) and number of people who accessed wage employment in the scheme (2012-13) presented. In the districts where agriculture worker population is high combined with high landlessness and prevalence of irrigation-intensive agriculture (Guntur, East Godavari, West Godavari and Krishna), the participation in MNREGA is relatively low; and, in the areas with significant agriculture workers combined with large number of small and marginal holdings and rain-fed agriculture (Mahabubnagar, Nalgonda, Prakasam and Anantapur), the participation in MNREGA is relatively high.



It is a fact that agricultural work for wages is not a voluntary profession for anybody. It is only undertaken under compulsion and in the absence of any other, better alternative, and in India, it is linked with caste oppression. The number of agriculture labourers has been constantly increasing at more than 20 percent for the last two decades between each census period of 10 years. MNREGA has increased the bargaining power of agriculture workers, particularly women, to the extent of restoring their statutory right to minimum wages, which lead to a marginal increase in their income. However, in the absence of any productive assets of their own, this increase does not have multiplier effect. In the case of landholding workers, MNREGA has helped wage workers to move up the occupational and social ladder as farmers. In the long run, this upward mobility is even likely to make MNREGA irrelevant for them.

Therefore, provision of agricultural land or any other supportive occupational asset to the landless agriculture workers would also enable them to step on this transformative path.

To realise the full potential of MNREGA, its implementation should be further strengthened in terms of better planning and maintaining quality of works, timely provision of works and payment of wages, etc., in addition to robust land reform measures. Diversifying, stabilising and making the farming of small and marginal farmers profitable and sustainable through appropriate agriculture policies would be another set of strategies. This would be possible if agriculture is perceived as a sustainable livelihood option that provides self-employment, dignity and food security to a majority; as a holistic process involving livestock, fisheries, poultry, value addition at village level and as a collective venture by groups of farmers in terms of sharing labour, preserving seed, crop planning, storage, processing and marketing, etc., rather than as a feeding ground for profit-making by a few corporates and a minority of large landholders, leaving the majority of the farmers and landless workers in poverty and distress.


The author, an independent researcher, worked with the Watershed Support Services and Activities Network (WASSAN) in Hyderabad from 2001-2014. As part of it, he worked on implementation systems and policy issues of MNREGA since its inception. He was a member of the National Consortium of CSOs on MNREGA.


Published in the ISSUE 3 of CHINA-INDIA DIALOGUE