KERALA INSTITUTE OF LOCAL ADMINISTRATION

KERALA AGRICULTURAL UNIVERSITY

PROJECT REPORT

A STUDY ON THE ROLE OF MGNREGS IN THE LOCAL ECONOMIC

DEVELOPMENT OF PATTAZHY VADAKEKKARA GRAMA
PANCHAYATH

Submitted by

Hrishikesh J | Bernard C W | Anjana Mohan | Shifana Fathima K | Aiswarya Ganesh

COLLEGE OF CO-OPERATION, BANKING AND MANAGEMENT

KERALA AGRICULTURAL UNIVERSITY
VELLANIKKARA, THRISSUR-680656
KERALA, INDIA
2021
DECLARATION
1
We hereby declare that this project entitled “A STUDY ON THE ROLE OF
MGNREGS IN THE LOCAL ECONOMIC DEVELOPMENT OF
PATTAZHY VADAKEKKARA GRAMA PANCHAYATH” is a bonafide
record of research work done by us during the course of internship at KILA and
that it has not previously formed the basis for the award to us for any
degree/diploma, associateship, fellowship or other similar title of any other
University or Society.

Thrissur Hrishikesh J
Bernard C W
Anjana Mohan
Shifana Fathima K
Aiswarya Ganesh

CERTIFICATE

2
Certified that this project report entitled “A STUDY ON THE ROLE OF
MGNREGS IN THE LOCAL ECONOMIC DEVELOPMENT OF
PATTAZHY VADAKEKKARA GRAMA PANCHAYATH” is a record of
research work done by Hrishikesh J, Bernard C W, Anjana Mohan, Shifana
Fathima K and Aiswarya Ganesh under my guidance and supervision and that
it has not previously formed the basis for the award of any degree, diploma,
fellowship or associateship to them.

Dr. Peter .M. Raj

Associate Professor
KILA

ACKNOWLEDGEMENT

3
The work presented in this project report would not have been possible without
our close association with many people who were always there when, we
needed them the most. Under this decorum, we would like to recall all of them
with at most gratitude.

This project report entitled ‘A STUDY ON THE ROLE OF MGNREGS IN

THE LOCAL ECONOMIC DEVELOPMENT OF PATTAZHY
VADAKEKKARA GRAMA PANCHAYATH’ is not the product of exclusively
our efforts. For the completion of this work we received magnanimous support
from many that, a comprehensive acknowledgement is almost impossible. Still
we would like to reckon from our inner heart deep gratitude and indebtedness
too.

We extend our heartfelt gratitude to Dr. Joy Elamon, Director General of KILA
for providing the great opportunity to be part of the training programme in
KILA. We are highly obliged to Dr.Peter M Raj Sir as our course director and
Bhaskaran Pallikara Sir as our course co-ordinator and K V Sajeev Sir for
their timely advices, encouragement and unswerving support showered upon us
throughout the training period.

We have no hesitation to declare that we were lucky to have such a director and
coordinator for our training. We express our sincere thanks to Kalidasan Sir
for providing us great help, guidance and advices throughout the period. We
would like to express our deepest gratitude to all the resource persons for their
informative and interactive sessions during the training period.

We express our sincere thanks to all the staffs working in the administrative
office and library for providing information’s regarding KILA. No words can
explain our gratitude to the staffs working in kitchen for serving delicious food
during the period.

4
We wish to express our sincere thanks to Dr. K.N. Ushadevi, Associate Dean
and Head of the Department of Rural Marketing and Management for including
such an informative training session in our course.

We extend our gratitude to Professor and ELCB Co-ordinator Dr. G.

Veerakumaran and Dr. K. A. Sunandha-KILA Training Co-ordinator of 2017
Batch and all other teachers for their support and encouragement for the
successful completion of the training programme.

We thank almighty for being with me always and for all his blessings all
through my life. We thank all the people for their help directly and indirectly to
complete our assignment. A word of apology to all those we have not mentioned
in person and note of thanks to each and everyone who have blessed us with
their prayers. Needless to say, we are solely responsible for any errors which
may remain…...

5
6
 CONTENTS
CHAPTER NO. TITLE PAGE NO.
1 INTRODUCTION

2 REVIEW OF LITERATURE

3 MATERIALS AND METHODS

4 RESULTS AND DISCUSSION

5 SUMMARY AND CONCLUSION

7
 LIST OF TABLES
Table no. Title Page no.
4.1 Total no. of works undertaken in each category

4.2 Total no. of works undertaken

4.3 Public works relating to natural resources

management (A)

4.4 Individual assets for vulnerable sections (B)

4.5 Rural infrastructure (D)

4.6 Employment generated

4.7 Amount utilized

8
 LIST OF FIGURES
Fig no. Title of figure Page no.
4.1 Total no. of works undertaken

4.2 Public works relating to natural resources management (A)

4.3 Individual assets for vulnerable sections (B)

4.4 Rural infrastructure (D)

4.5 Employment generated in Category A

4.6 Employment generated in Category B

4.7 Employment generated in Category D

9
10
A STUDY ON THE ROLE OF MGNREGS IN THE LOCAL ECONOMIC
DEVELOPMENT OF PATTAZHY VADAKEKKARA GRAMA
PANCHAYATH
Group members: Hrishikesh J, Bernard C.W, Anjana Mohan, Shifana Fathima K,
Aiswarya Ganesh
Place of study: Pattazhy Vadakekkara Grama Panchayat

ABSTRACT

Mahatma Gandhi Employment Guarantee Act 2005, is an Indian labour law and social
security measure that aims to guarantee the 'right to work'. This act was passed in September
2005 under the UPA government of Prime Minister Dr. Manmohan Singh. The works
undertaken by MGNREGS were classified mainly under 4 categories and they were Pubic
works relating to natural resource management (A), Individual assets for vulnerable sections
(B), Common infrastructure for DAY-NRLM complaint SHG (C) and Rural infrastructure
(D). The study mainly focused to analyse the local economic development on the specified
panchayath by analysing the total number of works under taken, total number of man days
generated and the amount sanctioned and utilized for the activities undertaken by MGNREGS
for the last three years under all these categories. The study was conducted based on the
secondary data collected from the records and also from an unstructured interview conducted
with the officials of the MGNREGS Department of Pattazhy Vadakekkara Grama
Panchayath. The study was conducted for the past 3 years, in which flood and covid-19
pandemic were an obstacle. But still, MGNREGS of Pattazhy Vadakekkara Grama
Panchayath was able to withstand these unpredictable hazards. MGNREGS of Pattazhy
Vadakekkara Grama panchayath was able to complete works as much as compatible to the
previous years and hence their generated employment and income for MGNREGS workers
during these struggling situations. The work generated by MGNREGS resulted in wealth
generation within the panchayath that improved the basis standard of living and needs of the
localities. It leads to the public economic enhancement that ultimately leads to the local
economic development of the panchayath.

11
INTRODUCTION

12
 CHAPTER 1

INTRODUCTION
1.1 Introduction

The Depression of the 1930s was notable among depressions not only for its severity
but also for its duration. In order to explain its duration, it is necessary to point out that there
are two related but distinct phenomena involved in such an economic crisis. First there is the
phenomena of an output recession. The production of goods and services declines and
consequently there is a decline in the number of jobs available. Usually this means there is an
increase in the unemployment rate. There is also a decline in the utilization of the plant and
equipment in the economy. A depression is when the economy is operating significantly
below capacity. This is often identified as an unemployment rate of 15 percent or above.

There is a pool of unemployed that does not necessarily get eliminated when the
recession ends and the economy begins to grow again. If the growth in output is normal then
it may prevent the unemployment from increasing but does not do anything about the pool of
unemployment created by the recession. It takes a supernormal rate of growth in production
to wipe out the accumulated pool of unemployment created by the past recession or
subnormal growth. Thus, the recession that produced a depression can end but the depression
can continue indefinitely.

This depression drastically affected India also. Hence, since 1960, 30 years were
expended in struggling to find suitable employment schemes in India's vast rural hinterland.
The experiences of these decades provided important lessons to the government. These
included the ‘Rural Manpower Programme’ (RMP) which exposed the tribulations of
financial management, the ‘Crash Scheme for Rural Employment’(CSRE) on planning for
outcomes, a ‘Pilot Intensive Rural Employment Programme’ (PIREP) of labour-intensive
works, the ‘Drought Prone Area Programme’ of integrated rural development, ‘Marginal
Farmers and Agricultural Labourers Scheme’ of rural economic development, the ‘Food for
Work Programme’ (FWP) of holistic development and better coordination with the states, the
‘National Rural Employment Programme’ (NREP) of community development, and the
‘Rural Landless Employment Guarantee Programme’(RLEGP) of focus on landless
households. The Planning Commission later approved the scheme and it was adopted on
national scale.

13
 On 1 April 1989, to converge employment generation, infrastructure development and
food security in rural areas, the government integrated NREP and RLEGP into a new scheme
Jawahar Rozgar Yojana (JRY). The most significant change was the decentralization of
implementation by involving the local people through Panchayath Raj Institutes and hence a
decreasing role of bureaucracy.

On 2 October 1993, the Employment Assurance Scheme (EAS) was initiated by the
then Prime Minister P.V.Narasimha Rao to provide employment to agricultural hands during
the lean agricultural season. P.V. Rao had started discussions on this act in the year 1991. The
role of PRIs was reinforced with the local self-government at the district level called the
‘Zilla Parishad’ as the main implementing authority. Later, EAS was merged with SGRY in
2001.

On 1 April 1999, the JRY was revamped and renamed to JGSY with a similar
objective. The role of PRIs was further reinforced with the local self-government at the
village level called the ‘Village Panchayats’ as the sole implementing authority. In 2001, it
was merged with Sampoorna Grameen Rozgar Yojana (SGRY).

In January 2001, the government introduced FWP(Food for Work Programme)

similar to the one that was initiated in 1977. Once NREGA was enacted, the two were
merged in 2006.

On 25 September 2001 to converge employment generation, infrastructure

development and food security in rural areas, the government integrated EAS and JGSY into
a new scheme SGRY. The role of PRIs was retained with the ‘Village Panchayats’ as the sole
implementing authority. Yet again due to implementation issues, it was merged with
Mahatma Gandhi NREGA in 2006.

1.1.1 Some of the employment generation programmes implemented in India

Development planning of India was always characterized by poverty eradication since the
starting of planning process in India in 1951. Wage employment programmes are the key
ingredients poverty alleviation schemes. Wage employment programmes were intended to
provide employment not only during agriculture season but also in times of natural calamities
like flood, droughts etc. These schemes aid create community assets like village ponds,
schools, rural roads etc

14
1.1.1.1 Rural Manpower Programmes (RMP): It was first among the various wage
programmes introduced in India and was launched in 1960-61. Main objective of the
programme was to provide 100 days of employment to at-least 2.5 million people by the last
year of third plan. In the starting stage it was introduced in 32 community development
blocks on a test basis then extended to 1000 blocks by the end of 1964-65. The programme
closed in the year 1968-69 after generating 137 million man-days of employment.

1.1.1.2 Crash Scheme for Rural Employment (CSRE): It was introduced in 1971-72 with
double edged objective of direct employment generation and creation of durable assets like
roads, culverts, soil conservation etc. The programme was expecting to crate 2.5 lakh man-
days per annum in each district. The implementation of the scheme was under the control of
State Governments even the full financial support was from Central Government. This
scheme was also not reached the expectation due to bad implementation and supervision from
the side of State Governments.

1.1.1.3 Pilot Intensive Rural Employment Programme (PIREP): Experience from the
implementation of RMP and CSRE, lead to the realization that more concentrated efforts
were needed to have considerable impact of the employment generation schemes. PIREP was
started in November 1972 in selected 15 Community Development Blocks for a three-year
period. The main objective of the scheme was to provide opportunity to unskilled labour and
creation of assets. The project completed its full term of three years and generated 18.16
million days of employment.

1.1.1.4 Food for Work Programme (FWP): By introducing this scheme Government of
India aimed to provide wage of employment fully or partly in food grains. This scheme was
introduced for generating additional employment opportunities for men and women in rural
areas and to create durable community assets. By 1978-79 this scheme was able to create
372.8 million man-days of employment utilizing 12 lakh tons of food grains. Due to
administrative and operational issues Government decided to revamp and restructure the
programme and it was renamed as National Rural Employment Programme in October 1980.

1.1.1.5 National Rural Employment Programme (NREP): NREP was implemented to help
rural population mainly depending on wage employment by providing additional gainful
employment during lean agricultural periods. The objective of the scheme was to create
durable commodity assets and raising the nutritional standard of the rural poor. It was
centrally sponsored scheme implemented in April 1981, but the financial burden was shared

15
between State and Centre on 50:50 bases. This programme created 1477.53 million days of
employment with an expenditure of Rs.2939.87 crore. On 1st April 1989, the scheme was
merged into Jawahar Rozgar Yojana.

1.1.1.6 Jawahar Rozgar Yojana (JRY): JRY was started on 1st April 1989 by merging two
wage employment programmes NREP and RLEGP. It was a Centre sponsored scheme with a
cost sharing basis of 80:20 between Centre and State. Objectives of the scheme were to
provide sustained employment to rural poor by strengthening rural economic infrastructure
and assets. Priority was given to enhancement of productivity of land. People belongs to BPL
category were the target group of this scheme. 22.5 % of the annual allocation was reserved
to SC/ST category and another 30% was reserved for women. Initially, the JRY also included
the Indira Awas Yojana (IAY) and the Million Well Scheme (MWS). Both these schemes
were made into independent schemes in 1996. JRY had been restructured and renamed as
JGSY with effect from April 1999.

1.1.1.7 Employment Assurance Scheme (EAS): This scheme was launched in identified
1778 backward Blocks situated in drought prone, desert, tribal and hilly areas on 2nd October
1993. The objective of the scheme was to provide 100 days assured casual manual
employment during lean agriculture season. The scheme was available to a maximum of 2
members from a family in the age group 18 to 60 years. EAS was demand driven scheme
with 75% Central assistance. The programme was merged into SGRY from September 2001.

1.1.1.8 Jawahar Gram Samriddhi Yojana (JGSY): This scheme was implemented on 1st
April 1999 to ensure improved quality of life of rural poor by providing them additional
employment. Primary objective of this scheme was to create infrastructure and durable assets
at the village level to ensure sustained employment. Gram Sabhas were the approval authority
of the various schemes under this programme. It was implemented as a Centre sponsored
scheme on cost sharing basis between Centre and State in the ratio of 75:25. Fund allocation
for the scheme was very less and only 6227.04 man- days of employment could be generated
under JGSY. Later the scheme was merged into SGRY during September 2001.

1.1.1.9 Sampoorna Grameen Rozgar Yojana (SGRY): Central Government of India

announced a new scheme on 25th September 2001 called SGRY to provide importance for
additional wage employment, infrastructural development, food security and improving
nutritional level in rural areas. Initial provision for the scheme was Rs.10000 crore and 50
lakh tonnes of food grains costing 5000 crores was also provided at free of cost. Programme

16
was open to all rural poor who were in need of wage employment and ready to do manual and
unskilled work in and around their village. This scheme was introduced through Panchayati
Raj institutions. Scheme was merged into MGNREGA from April 2008 onwards.

1.2 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): The
Government of India passed the Mahatma Gandhi National Rural Employment Guarantee
Act, 2005 in September, 2005. The Act gives legal guarantee of a hundred days of wage
employment in a financial year to adult members of a rural household who demand
employment and are willing to do unskilled  manual work. The Act will be applicable to
areas notified by the Central Government. The objective of the Act is to enhance the
livelihood security of the people in the rural areas by generating wage employment     through
works that develop the infrastructure base of that area.

1.2.1 Objectives of MGNREGS

 The Act offering life dignity to poor rural household in India by guaranteeing
minimum 100 days of wage employment to ensure minimum livelihood security.

 This scheme is a demand driven employment strategy allowing for the self-selection
of participants.

 Unemployment creates more issues to Government and inability of state to provide

employment may always be questionable. So, programmes like this help Government
officials to provide gainful employment.

 Since the NREGA was enacted in Indian Parliament it is a legal obligation to provide
fund for the scheme and not subject to budget allocation. So, the livelihood of poor is
not contingent upon the fiscal allocation.

 Another outstanding feature of this programme is that 60% of the total cost scheme
should be spent for wages for unskilled labour and the balance 40% on wages of
semi-skill, skilled and material cost.

 100% central funding is available for wage of unskilled labour and 75% funding from
Centre for wage of Semi-skilled, Skilled and Material costs.

 Fund allocation of the scheme is like non-lapsable corpus fund which can carry over
to subsequent financial years and not like budgetary allocation.

17
  MGREGA give emphasis on the work of water conservation and harvesting, both
very important in case rural people.

 Programme is designed as a decentralised implementation mechanism through PRIs.

 For ensuring transparency and accountability social auditing is also suggested under
the Act.

 Workers are provided with amenities like drinking water, shelter, first aid and
crèches.

 Under this scheme as possible no contract is permitted and use of machine also
banned.

 Act contains provision for appointing ombudsman and to arrange three-tier system for
grievance redressal mechanism.

 Under no circumstances shall the laborers be paid less than the wage prescribed in
the Act.

 Programme Officer and the Grama Panchayat may assign work to a person who
applied for employment under the scheme.

 Provision for regular inspection and supervision of works taken up under the scheme
shall be made to ensure proper quality of work as well as to ensure that the total
wages paid for the completion of the work is commensurate with the quality and
quantity of work done.

 All the accounts and records of the programme shall be made available for public
scrutiny and copies of the documents may be provided on demand after paying the fee
specified in the Act.

 Muster rolls of each scheme or project under the scheme shall be made available in
the office of the Gram Panchayat for inspection of any person interested, after paying
such fees specified in the Scheme.

All the above employment generation programmes had played an important role in
decreasing unemployment in India as well as also helped in socio-economic development of
the country as a whole

1.3 Statement of The Problem

18
 MGNREGS is generally considered as a unique weapon to activate and empower the
rural poor. There are number of precious assets and infrastructure which has been created
using manpower under MNREGS. From some corners, criticism has arrived showing that
asset generated under the scheme are lacking quality and not having long life. This
programme is implemented under the supervision of local bodies like panchayats and Block
panchayats. Moreover, there exists a multi layered social audit system with the participation
of citizens, which ensures the efficient implementation of the programme. In certain local
bodies supervision is not up to the mark and at grass root level proper planning is not done
which may cause for the wastage of fund. Some of the other issues are delay in issuance of
job card and this is leading to the delay in work under the scheme. Since, there are a lot of
problems in this sector, the activities undertaken by the scheme include various public
interest activities and infrastructural development activities which has resulted in the socio-
economic development of many panchayaths across Kerala. In this scenario it is very
significant to conduct a study on the local economic development caused after the
introduction of MGNREGS. In this study , we try to make analysis of situation in the
Pattazhy Vadakekkara panchayath of Kollam district in Kerala, where MGNREGS is very
successfully implemented and functioning very smoothly and has resulted in the local
economic development of the Panchayath.

1.4 Objective of The Study

The objective of the study is :

 To evaluate the role MGNREGS in the local economic development of Pattazhy

Vadakekkara grama panchayath.

1.5 Methodology

1.5.1 Data Collection

Secondary data collected from the records of MGNREGS Dept. of Pattazhy

Vadakekkara Grama Panchayath and also conducted a unstructured interview with the
MGNREGS workers of the same panchayath. Referred Research papers and Scholarly
articles.

1.5.2 Data Analysis

19
 The list of completed works for the three consecutive years 2018-19, 2019-20, 2020-
21 were collected form Dynamic Report for Monitoring from Pattazhy Vadakekkara Grama
panchayath office. The report included the district name, name of the block panchayath, name
of grama panchayath, financial year in which the work was started, work code, work name,
master work category name, work category name, work type, agency name, sanction amount
in lakhs, total amount utilised, total man-days, date in which work commenced and work
completed date. The works undertaken were categorized as A- Public works relating to
natural resources management, B- Individual assets for vulnerable sections, C- Common
infrastructure for day-NRLM compliant SHG and D- Rural infrastructure. Using this data,
total employment generated and the total amount utilised under each category were analysed.

1.5.3 Location and Period of Study

The study was conducted at Pattazhy Vadakekkara Grama Panchayath from 9 th March
to 16th March of 2021.

1.6 Scope of The Study

The study concentrates on role of MGNREGS in the Local Economic Development of

Pattazhy Vadakekkara grama panchayath in Pathanapuram block panchayath of Kollam
district. Study covers the Local Economic Development took place in the panchayath via the
assistance of MGNREGS for the last three years. Such information can help the researcher to
find out the contribution of MGNREGS in building local economic development features like
income sustainability, standard of life, creation of jobs, securing livelihoods, improving
infrastructure, and managing local resources. Besides this study provides key information
about the outcome of MGNREGS in the panchayath and livelihood of employees in the
scheme. The study was conducted in 13 wards of Pattazhy Vadakekkara grama panchayath
where MGNREGS is introduced and functioning properly.

1.7 Limitation of The Study

 This study was limited to Pattazhy Vadakekkara Grama Panchayath in Kollam
District and hence the inference and findings arrived at cannot be generalized.
  In-depth study was not possible due to time constraints and current pandemic
situation
 Study will be dependent upon secondary data also and all limitations of secondary
data are applicable to this study

20
 Methods used in the study has its own limitations. One cannot make an accurate
analysis, using the data of three years and come into a conclusion
 This research work is mostly based on informal discussions made with employees in
the scheme and the responses are not free from personal bias, it might have affected
the results of the study.

21
 REVIEW OF LITERATURE
CHAPTER 2

REVIEW OF LITERATURE
The study of any research problem requires referring the past works on the related topics by
other scholars which are directly connected to the objectives of the study. This helps to
proceed with work in the right direction. It acts as a guide and facilitates, for conducting
study and drawing conclusions in a systematic way. It assists in delineation of the objectives
and research procedure to be followed.

Numerous studies had been conducted at International level, National level and also at
regional level on various aspects MGNREGA. Since it is first initiation from a nation. All the
agencies like World Bank, ILO, UN, RBI etc. were very eager to know the performance and
impact of the scheme MGNREGS. Most of the studies make initiations to bring out the
impact created by the NREGA programme on the earnings, social status and asset holdings of
the rural women and other beneficiaries of the scheme and some of them reveal the barriers to
efficient implementation of the programme. Existing studies in this area are listed and a
profitable review of the relevant studies has been briefly attempted below. These listed
studies justify the relevance and importance the present study.

Chowdary (2015) conducted a study and revealed that during the introduction stage of
MGNREGA there was massive flow of workers from agricultural sector to MGNREGS
because of its high wage rate. Then the situation changed, and the agricultural sector
recovered its old status. The higher market wage rate has resulted in opposite flow of workers

22
back to their basic occupation. Those who had retired from plantations and sought a work of
lesser effort remained there. Women constitute a major portion of workforce of MGNREGS,
because women got wage equivalent to a male worker and it is a matter of status to them to
be a Government worker rather than a coolie. Women who were mainly housewives and
laborers of higher age group resorted to MGNREGS as it involves less toil and provides
guaranteed employment.

FICCI and KPMG (2015) in their report titled “Labour in Indian Agriculture: A growing
Challenge” says that Mahatma Gandhi National Rural Employment Act, have affected farm
labour adversely and can have negative impact on productivity and prices. The decrease in
supply of agriculture labour with support of various Govt. schemes like MGNREGA has
caused for the escalation in farm wages. This has an adverse impact on the profitability of the
farmers. This report also says that between 2004-2005 and 2011-2012, farm labour declined
31 million, even if the total work force continued rising. Share of farm work force in total
work force of the country decline from 57% to 49%.

Seenath P, Prema and Sulaja O R (2015) conducted a study on “Implications of

MGNREGA in Agricultural Labour Market” and found that majority of the Review of
Literature 24 workers registered under this scheme are females and their participation will
come around 95%. Agriculture was the major provider of employment in Kerala before the
introduction MGNREGA, but after its implementation MGNREGS took this position.
Though they were not completely abstaining from agricultural work, their participation in
terms of agricultural labour per year was decreased from 64.4 to 20.4 in Kasaragod District of
Kerala. Study shows that there was 68.42% reduction in average agricultural labour days per
year after implementing MGNREGA. This change indicates that MGNREGS is the
supplementary provider of employment in Kasaragod District. Annual income of the
participants of the scheme was increased by 142% after joining into the scheme.

Sardaprasad (2014) in his study titled, MGREGA: A strategy to overcome labour shortage
in agriculture has observed that the main four reasons for agricultural labour shortage in the
rural area are rural out migration, MGNREGA work and it wage rate, disinterest of rural

23
youth in agriculture, and political influence of leader on labour. According to him, the most
affected farmers are the medium and large-scale farmers, because they are not able to manage
agriculture only with the help of family labour and most of the time, they are not able to hire
labour because of the unavailability, even if they are ready to pay higher wage rate.

Roopa and Leelavathi (2013) mentioned in their studies that Indian agricultural sector is
often cited as a classic example for disguised unemployment. Labour abundance, low rate of
wages, and need for creation of other employment Review of Literature 23 opportunities for a
large number of work force have always been the central issues of debate throughout the
planning period. The study reveals that MGNREGA must be implemented in partnership with
local farmers in such a way that the local farmers will gain labour supply through
MGNREGS, and the state can also share the fiscal burden with the local farmers in season of
corps. In the off-season work force should be directed to the development of local
infrastructure and other related asset creation.

Zimmermann (2013) has conducted a study to examine the impact of MGNREGA on

private casual wage employment utilizing unit record data for 2007- 08 adopting a regression
discontinuity approach. Finding of this study suggest that MGNREGA has a significant
impact on public work employment and also finds evidence that suggests that people moved
out of private casual employment into self-employment due to the MGNREGA.

Azam (2012) examines the impact of MGNREGA on labour force participation and on
participation public work. This was one of the first papers to use the phase wise roll out of the
MGNREGA to identify the causal impacts using a DID estimator. He finds a positive impact
of the scheme on labour force participation, and also notes that this was driven mainly
through an increase in female participation. He also finds an increase in participation in
public works in Phase 1 and 2 districts, but the magnitude is modest.

Thadathil Mohandas (2012) found in their studies that MGNREGS had worthy impact on
the cultivation of Wayanad when it introduced in the year 2006. During this time District was

24
facing severe crisis in the agricultural sector, many farmers committed suicide due to loss
happened to them, as a result low prices for their products. Workers lost their employment
and those who had job were extremely low paid, nearly Rs.100/day for male workers and
Rs.70/day for female workers. This situation has caused for the massive flow of laborers from
agricultural sector to MGNREGS when the scheme is introduced. Later when the market
wage rate increased to considerable amount male workers started to leave the scheme and
shifted back to their earlier occupation

Alha and Yonzon (2011) expressed that agricultural sector in India has number of
characteristics like high supply of labour than demand, incredibly low rate of wages, large
area of agricultural land and opportunity to earn livelihood is limited. But Sector has
undergone for a huge change in recent couple of years. The reasons for this change are the
increased rural to urban migration, and the introduction MGNREGS and other public works.
Structural changes happened in Indian economy has caused for increased rate of male
migration from rural area to urban expecting a better earning. Schemes like MGNREGS not
attracted them because of the market wage rate, but these schemes are found attractive for
females in rural locations. This situation results in a shortage of farm labour and
consequently, an upward push in agricultural wages.

Channaveer (2011) had a study on “Impact of MGNREGA on Inputs use Pattern, Labour
Productivity and Returns of Selected Crops in Gulbarga District, Karnataka”. He was trying
to examine the impact MGNREGA in the selected two sets of Villages in the Gulbarga
District, one which utilized 75% of allocated fund and other utilized only 25% of fund under
MGNREGA. Result of the study reveals that cost of cultivation of Red Gram and Rabi Jowar
found higher by 23% and 16% respectively in fully implemented villages. Labour
productivity of male and female has been noticed lower in fully implemented villages, and
implementation of the scheme has caused for the hike in wage rate of fully implemented
MGNREGA villages.

Harish (2011) made a research on Impact and Implications of MGNREGS on labour supply
and income generation from Agriculture in Central Dry Zone of Karnataka. This study results

25
that the number of days of work in a year has increased to 206 in a significant manner along
with the introduction of MGNREGS, reflecting an increase of 16%. Regression analysis of
this research reveals that gender, education and family size of workers are important factors
influencing the worker’s employment.

Maheshwari and Gangwar (2011) went for a study on “Impact of Dairy Farmers in
Thanjavur District of Tamil Nadu” and found that after the implementation of MGNREGA
wage rate have significantly increased in the sector from Rs. 60 per day Rs. 110 per day. The
study observed that animals of some landless or small dairy farmers are maintained by the
children or aged family members, as majority of adult family members enrolled into
MGNREGS. But these workers are not getting guaranteed 100 days of employment in a
financial year, more over wage payment and issue of job cards are also getting delayed
always.

Murthy and Indumati (2011) conducted a study to know the economic impact of
MGNREGA in the Drought-prone State of Karnataka, Rajasthan, and Irrigation Dominated
State of Andhra Pradesh. This study revealed that 50% of the Review of Literature 19
households who registered under the Act, actually demanded employment. This is due to the
availability of favourable market outside the MGNREGA and outside the agriculture sector.
Of the total number of households demanding employment, 92- 97 % were provided in the
drought-prone states of Karnataka and Rajasthan, while for the irrigation dominated state of
Andhra Pradesh, it was reported that 107%. This means that in Andhra Pradesh, MGNREGA
is being offered even to those household who did not demand it.

Vanitha and Murthy (2011) conducted a research work on “Economic Analysis of

MGNREG Programme in Mysore District of Karnataka” and found that 70 % of the workers
enrolled to MGNREGA are agricultural laborers. Major portion of the Income earned by
those who got registered under the scheme are from agricultural sector (60.55%). Average
annual workdays generated by the MGNREGA were 75 days and about 68 % of landless
participants earned 28% of their house hold income from the scheme. Study also revealed
that there has been a decline in the supply of labour to the extent of 41 person days per year

26
on an average after implementing MGNREGS and suggest that works under the scheme
should be executed only during offseason.

Ahuja (2011) initiated a research work in both agriculturally backward and agriculturally
advanced districts of Haryana to know the impact MGNREGA on agricultural labour supply.
Study indicates that, for the backward and area resource scarce areas, MGNREGS is good
provider of employment. But in the case of developed districts the scheme could not stop
migration as the people were earning more income from migration.

27
 MATERIALS AND METHODS
CHAPTER 3

MATERIALS AND METHODS

3.1 General information

 Name of grama panchayath : Pattazhy Vadakekkara

 Date of establishment : 1979 January 19
 Block panchayath : Pathanapuram
 Area : 18.07 Sq. km
 Population ( as per 2011 census) : 15160
 Scheduled caste : 2681
 Scheduled tribe : Nil
 Female : 8078
 Male : 7082
 Literacy rate : 94.4%
 No. of wards : 13

3.2 Development Status

3.2.1 Landscape

Pattazi Vadakkekkara village of Pathanapuram taluk in Kollam district is

comparatively an undeveloped area. According to the landscape this area comes
intermediate tidal range, but there are many high hills.  About 50% of the area in the
panchayath belongs to the small slope section. Water scarcity is severely depleted during the

28
summer months due to the inability of rainwater to drain into the soil, and the widespread
conversion of fields continues to be a major cause of water scarcity. 

3.2.2 Economy

Rubber is cultivated in all 75 percentage areas of cultivable land.  Concentration in

monoculture system has significantly affected the survival of biodiversity.  Fluctuations in
rubber prices significantly affect the economic and social conditions of the people.  Scientific
farming methods are generally not followed in crops other than rubber.  Paddy cultivation has
been declining on a large scale from 150 ha to 15 ha in at least 20 years.  There has been an
optimistic change in vegetable cultivation in recent times.  There are a limited number of
families who have adopted animal husbandry as their main source of livelihood.  However,
animal husbandry is generally widespread as a sub-occupation.  Significant sections of the
population are engaged in labour, small business and cashew factories. A small minority of
the population is dependent on foreign employment and the service sector.  Despite the
declining number of agricultural workers, more workers are being offered jobs in the
construction sector. Poverty has almost disappeared as welfare pensions have become more
widespread. 

3.2.3 Infrastructure / Transportation / Drinking Water / Health

The two-decade-old people's plan management approach has significantly succeeded

in addressing infrastructure development issues.  However, the project planning and
implementation process has been streamlined by ensuring timely quality assurance in this
area through various development missions launched during the 13th - 20 th annual Plan
period.  During the Five Year Plan, Life Mission will provide safe housing to all people by
collaborating with various agencies to achieve self - sufficiency in this field. 

There are several roads connecting different parts of the panchayat. But except for the
main roads, they are not in good condition. Sloping terrain and increased rainfall pose a
challenge to the proper maintenance of roads. However, the panchayat is doing its utmost to
keep all the existing roads in good condition. Complaints regarding the road in the gram
sabha have been greatly reduced

The activities of Haritha Kerala Mission have been formulated with an emphasis on
increasing agricultural production, water conservation and waste management.  We aim to
make great strides in these areas during the five year plan.  Utilizing soil and water

29
conservation activities through the National Rural Employment Guarantee Scheme (NREGS)
is the only permanent solution to the widespread summer water scarcity in the panchayat. 
Sanitation and decontamination can only be successful with the participation of civil society. 
The ban imposed by the government has been very beneficial in controlling the use of
plastics which is a major cause of environmental destruction.  Plastic collection needs to be
continued through Haritha Karmasena.  Throwing away useless inorganic materials is not
good.  Every family should take special care in this regard and ensure that non-biodegradable
waste is not dumped.

There is one college, one high school, three UP schools and four LP schools in the
field of public education.  Public schools are in a good position in terms of infrastructure. 
The State Government's Public Education Protection Campaign is aimed at raising the
academic standards of public schools to national and international standards. Much progress
has been made in improving public schools into model institutions to achieve the goal of
providing better educational facilities to the common man.

3.3 Methodology used for analysis

3.3.1 Data Collection

Secondary data collected from the records of MGNREGS Dept. of Pattazhy

Vadakekkara Grama Panchayath and also conducted an unstructured interview with the
MGNREGS workers of the same panchayath. Referred Research papers and Scholarly
articles.

3.3.2 Data Analysis

The list of completed works for the three consecutive years 2018-19, 2019-20, 2020-
21 were collected form Dynamic Report for Monitoring from Pattazhy Vadakekkara Grama
panchayath office. The report included the district name, name of the block panchayath, name
of grama panchayath, financial year in which the work was started, work code, work name,
master work category name, work category name, work type, agency name, sanction amount
in lakhs, total amount utilised, total man-days, date in which work commenced and work
completed date. The works undertaken were categorized as A- Public works relating to
natural resources management, B- Individual assets for vulnerable sections, C- Common
infrastructure for day-NRLM compliant SHG and D- Rural infrastructure. Using this data,
total employment generated and the total amount utilised under each category were analysed.

30
31
 RESULTS AND DISCUSSION
CHAPTER 4

RESULTS AND DISCUSSION

The list of completed works for the three consecutive years 2018-19, 2019-20, 2020-
21 were collected form Dynamic Report for Monitoring from Pattazhy Vadakekkara Grama
panchayath office. The report included the district name, name of the block panchayath, name
of grama panchayath, financial year in which the work was started, work code, work name,
master work category name, work category name, work type, agency name, sanction amount
in lakhs, total amount utilised, total man-days, date in which work commenced and work
completed date. The works undertaken were categorized as A- Public works relating to
natural resources management, B- Individual assets for vulnerable sections, C- Common
infrastructure for day-NRLM compliant SHG and D- Rural infrastructure. Using this data,
total employment generated and the total amount utilised under each category were analysed.

4.1 Total no. of works under taken in each category

Table 4.1 Total no. of works undertaken in each category

PUBLIC INDIVIDU COMMON RURAL

WORKS AL ASSETS INFRASTRUCT INFRASTRUCT
YEA RELATING FOR URE FOR DAY- URE (D) TOT
R TO NATURAL VULNARA NRLM AL

32
 RESOURCES BLE COMPLIANT
MANAGEMEN SECTIONS SHG (C)
T(A) (B)
2018- 35 67 0 16 118
19
2019- 9 80 0 23 112
20
2020- 57 17 0 9 83
21
TOT 101 164 0 48
AL

Table 4.1 represents the total number of works undertaken in Pattazhy Vadakekkara
Grama panchayath from 2018-19 to 2020-21 under each category such as category A, B, C
and D. Category A includes construction of loose boulder check dams, masonry check dams,
brush wood check dams, gabion structures, gully plugs, farm pond renovation, farm pond,
renovation of streams (Km), road and river side tree plantation and Ela varambe with coir geo
textile (Km). Category B includes construction of cattle shed, goat shed, poultry shed, soak
pits, compost structure, nadep compost, bio gas plant- Deena bandhu model, Azolla tank,
well recharging, new well, construction of PMAY and other govt. scheme house’s unskilled
person days, construction of IHHL for PMAY and other govt. scheme houses, construction of
recharge pit for individuals, land development terracing, contour bund, contour trench,
development of fallow land community, development of fallow field cultivation community,
stone bund, farm ponds, orchards, tree plantations and fodder grass cultivation. Category C
includes construction of worksheds for SHG’s and material collection facility centre for dry
waste management. Category D includes construction of compound walls for govt. school/
anganwadis, kitchen shed for govt. school, dining hall for govt. school, anganawadi centres,
school / anganawadi community toilets, playgrounds, community toilets and earthen road.

4.1.1 Total no. of works undertaken

Table 4.2 Total no. of works undertaken

YEAR TOTAL NUMBER OF WORKS
UNDERTAKEN

33
 2018-19 118

2019-20 112

2020-21 83

Table 4.2 shows the total number of works under taken by MGNREGS workers of
Pattazhy Vadekekkara Grama panchayath. They include works carried out by the MGNREGS
workers under all the four categories during the last 3 years.

Fig 4.1 Total no. of works undertaken

TOTA L NO. OF WOR KS UNDERTA KEN

2018-19 2019-20 2020-21

According to Fig. in the year 2018-19 the total no. of works under taken by
MGNREGS is 118. Even though the very next year a slight decrease can be seen in the works
undertaken, but still it is almost close to the previous year. In these years MGNREGS
workers had did their part for reviving the damages caused by flood 1 and 2. But on the year

34
2020-21 the total no. of works undertaken has decreased to 83. The COVID-19 pandemic
conditions have resulted in the decreased no. of works during this particular year.

4.1.2 Public works relating to natural resources management (A)

YEAR PUBLIC WORKS RELATING TO NATURAL

RESOURCES MANAGEMENT(A)
2018-19 35

2019-20 9

2020-21 57
TOTAL 101

Table 4.3 Public works relating to natural resources management (A)

Table 4.3 shows the activities under taken by the MGNREGS workers under the
category of A- Public works relating to natural resources management. These activities are
mainly for the well maintenances of the publicly owned properties.

The activities under category A includes construction of loose boulder check dams,
masonry check dams, brush wood check dams, gabion structures, gully plugs, farm pond
renovation, farm pond, renovation of streams (Km), road and river side tree plantation and
Ela varambe with coir geo textile (Km).

Fig 4.2 Public works relating to natural resources management (A)

35
 PUBLIC WOR KS RELA TING TO NA T -
UR A L R ESOUR CES
MA NA GEMENT(A )
2018-19 2019-20 2020-21

In the year 2018-19 activities undertaken by MGNREGS under category A is about

35 and in the very next year this has been decreased to 9 However, in 2020-21 number of
works has increased to 57. In total MGNREGS workers has completed about 101 activities in
Pattazhy Vadakekkara Grama panchayath in last 3 years. From the table 4.3, it is understood
that the no. of works undertaken by the MGNREGS workers under this particular category is
based on the emerging needs within the panchayath.

4.1.3 Individual assets for vulnerable sections (B)

Table 4.4 Individual assets for vulnerable sections (B)

YEAR INDIVIDUAL ASSETS FOR VULNARABLE

SECTIONS (B)
2018-19 67

2019-20 80

2020-21 17

TOTAL 164

Table 4.4 shows the activities undertaken by MGNREGS under category B in

Pattazhy Vadakekkara Grama panchayath. These activities are mainly carried out for the
individuals on their asset by the MGNREGS workers based the applications submitted by
these individuals to the panchayath.

36
 The activities under category B includes construction of cattle shed, goat shed, poultry
shed, soak pits, compost structure, nadep compost, bio gas plant- Deena bandhu model,
Azolla tank, well recharging, new well, construction of PMAY and other govt. scheme
house’s unskilled person days, construction of IHHL for PMAY and other govt. scheme
houses, construction of recharge pit for individuals, land development terracing, contour
bund, contour trench, development of fallow land community, development of fallow field
cultivation community, stone bund, farm ponds, orchards, tree plantations and fodder grass
cultivation

Fig 4.3 Individual assets for vulnerable sections (B)

INDIVIDUA L A SSETS FOR VULNA R A BLE

SECTIONS (B)
2018-19 2019-20 2020-21

Under category B, the MGNREGS had undertaken 67 works in 2018-19, 80 works in

2019-20 and about 17 works in 2020-21. The no. of activities under category B is only based
on the demand generated the by the individuals. In the year 2018-19 and 2019-20 the
demand raised from the individuals for the MGNREGS were comparatively high due to the
damages caused by the flood occurred in these 2 consecutive years to the individual assets.
The decreased no. of activities undertaken by the MGNREGS in the year 2020-21 is due the
decrease in no. of applications received by the panchayath in the background of COVID-19.

4.1.4 Common infrastructure of DAY – NRLM complaint SHG

Activities undertaken by MGNREGS workers under category C includes works for

promoting agricultural productivity by creating durable infrastructure required for bio-
fertilisers and post-harvest facilities including pucca storage facilities for agricultural produce
and construction of common work sheds for livelihood activities of self-help groups.

37
 But Pattazhy Vadakekkara grama panchayath in which the study was conducted didn’t
had any activities undertaken in this particular category for the past three years.

4.1.5 Rural infrastructure (D)

Table 4.5 Rural infrastructure (D)

YEAR RURAL INFRASTRUCTURE (D)

2018-19 16

2019-20 23

2020-21 9

TOTAL 48

Table 4.5 includes the activities undertaken by MGNREGS in Pattazhy Vadakekkara

Grama panchayath in Category D. Activities under this particular category includes
construction of compound walls for govt. school/ anganwadis, kitchen shed for govt. school,
dining hall for govt. school, anganawadi centres, school / anganawadi community toilets,
playgrounds, community toilets and earthen road

Fig 4.4 Rural infrastructure (D)

38
 RUR A L INFRA STR UCTUR E (D)
2018-19 2019-20 2020-21

Activities undertaken by the MGNREGS workers under this particular category are
carried out mainly of the betterment of rural infrastructure and thereby for the development of
the panchayath. In Pattazhy Vadakekkara Grama panchayath the activities undertaken in
category C in 2018-19 is about 16, then in 2019-20 it has increased to 23 and the in 2020-21
it has increased to 9. The decreased no. of activities in the year 2020-21 is the due to the
lockdown and other background conditions raised due to the COVID-19 pandemic.

4.1.5 Conclusion

MGNREGS is playing an important role in the local economic development of

Pattazhy Vadakekkara Grama panchayath. Under category A they completed about 101
works , under category B they completed about 164 works and under category D they
completed about 48 works for last three years. MGNREGS didn’t undertaken any activities
under category C in the respective panchayath for last three years. The no. of works
undertaken by MGNREGS is dependent on the demand raised for work as well as
employment. The total no. of works was 118,112 and 83 in 2018-19, 2019-20, 2020-21
respectively. It is appreciable that the MGNREGS workers was able to complete these works
in the background of flood and COVID-19 pandemic occurred in the period of study which
helped the employment generation and thereby income generation to MGNREGS workers
during these hazards’ conditions. This had helped in the local economic development of
Pattazhy Vadakekkara Grama panchayath even in these situations. But still the unpredicted
hazards occurred during last 3 years had their respective impacts on the no. of works

39
undertaken by MGNREGS. MGNREGS workers had done their part for reviving the
damages caused by flood occurred in 2018-19 and 2020. Similarly, in 2020-21 the lockdown
and other conditions raised due to the COVID-19 pandemic resulted in a decreased no. of
activities.

4.2 Employment Generation

Many employment generation programmes are being introduced by the Government of India
to fulfil the gap of employment generation in rural India. Mahatma Gandhi national rural
employment guarantee act is the first ever act in the history of India to provide guaranteed
work and wage. Many researchers have found that this programme has a huge impact on the
employment structure of rural India. Annually over 50 million households that account for
more than one-third of households living in rural India do claim a stake in employment
generated under the programme from 2006-07 to 2018-19 has been around 19.5-billion-
person days. Most of the works undertaken in MGNREGA are of the water management,
village level road and environmental protection. In fact ,it devised a tool a tool at the micro
level to provide adaptation in the hands of the locals to better cope with risks and the
uncertainty caused by climate change. The MGNREGS programme has provided some level
of livelihood security to the rural households in a crisis situation when getting work
elsewhere becomes difficult because of the recurring off-seasons in agriculture and related
other shocks in economy. The total category wise employment generated in Pattazhy
Vadakkekara panchayath from 2018-19 to 2020-21 is given below.

Table 4.6 Employment generated

YEAR EMPLOYMENT GENERATED (IN DAYS) TOTAL

Category Category Category Category
A B C D
2018-19 18769 27321 - 19758 65848
2019-20 7800 38081 - 17776 63657
2020-21 30720 1931 - 5817 38468

The table shows the employment generated in each category from 2018 to 2020. In category
A, there is no particular trend in the employment generation . In 2018-19, the employment
generated was 18769 and in the next year the employment generated has drastically reduced
to 7800 days . however, there was a sudden increase in the creation of employment in the

40
year 2020-21with 30720 employment days. While analysing the employment generation in
the category B, there is an increase in the employment generation from 2018-19 to 2019-20
from 27321 days to 38081 employment days. However, there is a steady decrease in the
employment days after 2019-20 to less than 5 percent compared to the previous year. There
was no demand for the category C works . Category D shows a steady decrease in the
employment generation from 2018-19 to 2020-21. In 2018-19, there was a total of 65848
employment days and the most demand for work were in category B. There is a slight
difference in the employment generated in category A and D. In 2019-20, the most demanded
works were in the category of B and category D stands next in employment generation and
there was a less demand for works under Category A and the total employment generated was
63657. In 2020-21, there was a higher demand for category A type works and so there was
less distribution of labour to other categories . There was a total employment generation of
38468.

Fig 4.5 Employment generated in Category A

EMPLOYMENT GENERATED IN CATEGORY A

35000
30000
25000
20000
15000
10000
5000
0
2018-19 2019-20 2020-21

category A

Above Fig 4.5 shows that the employment generated in category A from 2018-19 to 2020-21.
The requirement for works was higher in 2020-21 than in previous years. Because there was a
higher demand in public works relating to natural resource management. Works such as farm
pond renovation, road and riverside tree plantation, renovation of streams and Ela varambe
with coir geo textile had greater demand during 2020-21 as public works could be done
efficiently as there was fewer public gatherings due to COVID-19 pandemic. Also, the
panchayat faced water scarcity in the previous years , so in a movement to face the next
summer , panchayath has decided to renovate the ponds, streams and other water resources
for public.

41
Fig 4.6 Employment generated in Category B

EMPLOYMENT GENERATED IN CAT-

EGORY B
40000
35000
30000
25000
20000
15000
10000
5000
0
2018-19 2019-20 2020-21

Category B

The demand for soak pits, construction recharge pits for individuals, stone bund and tree
plantation were high during 2018-19 and 2019-20. But in 2020-21, there was a very less
demand in this category due to most of the individuals were confined to their houses and no
external activities and persons were allowed in the surroundings of their houses . So, there
was a less demand for these kinds of works. There was a higher demand for these kinds of
works in 2019- 20 and a large number of soak pits and recharge pits were built in these times.
It also caused a less demand in these works in the following year.

Fig 4.7 Employment generated in Category D

EMPLOYMENT GENERATED IN CATEGORY

D
25000
20000
15000
10000
5000
0
2018-19 2019-20 2020-21

Category D

The year 2018-19 had a higher demand on the construction of Earthen roads, Road concreting
and construction of road side drains. The works continued with almost same demand rate in
the following year. But the year 2020-21 generated only less work days for these works due
to the COVID-19 pandemic.

42
4.2.1 Conclusion

Concluding the study, it may be opined that MGNREGS has been reasonably effective in
local economic development through ensuring enhanced income generation. It provided
adequate employment to the unemployed sections and helped to uplift their standard of
living. Local economic development could be achieved by infrastructural development and
decreasing unemployment rate. The MGNREGS works were both public friendly and
generated the needful workdays to the registered MGNREGS workers. Pattazhy Vadakekkara
Panchayat consisting of 13 wards had a good record of MGNREGS activities. They provided
works for the livelihood of the MGNREGS workers during the COVID-19 pandemic. The
MGNREGS works that adequately generate income to the economically weaker sections
could improve their health care spending, better standard of living, sufficiency to meet day to
day domestic expenses, financial capability to support children’s education etc. So, the works
generated by MGNREGS resulted in wealth generation within the panchayat that improved
the basic standard of living and needs of the localities. It leads to the public economic
enhancement that ultimately leads to the local economic development of the panchayat.

4.3 Amount utilized

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is

undoubtedly one of the massive employments scheme with such extensive coverage,
involvement of multiple organisations, huge fund allocations and fund flow mechanism play
an important role in its success. In general, labour budget is being prepared in every work has
to be done it is prepared either arbitrarily or pro-rata basis, duplication of previous year
labour budget etc. The Labour Budget estimated under MGNREGS is based on the amount of
total cost including wages, material, and administrative costs. The 60:40 ratios for wage and
material costs should be maintained at Grama panchayath level for all works to be taken up
by Grama Panchayath and for works to be taken by all other agencies, it should be
maintained at the Block/ District level. The difference between total availability of funds and
actual expenditure (including liability) during the financial year is called unspent balance.
Every master work has an amount which is allotted for that certain work called sanctioned
amount which is available for the completion of work and certain amount will be utilised for
the same called amount utilised . The following table represents the amount sanctioned in
lakhs and amount utilised for the years 2018-19 to 2020-2021.

43
Table 4.7 Amount utilized

YEAR Amount Sanctioned ( In lakhs) Amount utilized (In Lakhs)

Category A Category B Category C Category D Category A Category B Category C Category D

2018-19 68.192 101.987 - 41.972 65.176 96.876 - 38.781

2019-20 25.393 134.110 - 53.365 21.509 118.755 - 51.051

2020-21 96.501 10.734 - 17.952 91.761 8.965 - 17.01

MGNREGS provides a lot of employment activities to the rural poor. The activities are
undertaken according to the demand of the residents in each ward. From table , the funds
allotted for each category of works in the yearly basis is given. The amount sanctioned in
each category depends on the demand of works which will be followed by cumbersome
procedures in the panchayath and block panchayath level for the administrative sanction and
technical sanction. In 2018-19, category B type works had greater demand and therefor the
amount sanctioned was higher for that particular category. There was almost similar quantity
of demands for work for category A and D. There were no demand in category C and so as
no amount was sanctioned in this category. While analyzing the amount utilized comparing
to the amount sanctioned, we can see that it is not satisfactorily utilized. The complete
utilization of funds is not done properly. In every category, the works were completed within
the allotted amount . And there was always a surplus amount which is not completely
utilized. In the next year also, the efficient utilization of amount sanctioned was not done and
lakhs of amount were found unutilized. Comparatively efficient utilization of funds was seen
in the year 2020- 2021. The utilized amounts lie almost close to the sanctioned amount and
the fund utilization is more efficient in the year 2020-21.

44
Fig 4.8 Amount utilized in category A

CATEGORY A
120

100

80

60

40

20

0
2018-19 2019-20 2020-21

Amount sanctioned Amount utilised

The above figure depicts the gap between the funds sanctioned according to the quantity of
works demanded and the amount utilized for the completion of works. There lies a small gap
between this two. The major reasons for the unspent balance are because of unscientific way
of preparation of labour budget at Gramapanchayath level. Labour budget is not prepared on
the basis of demand. It is either prepared on pro-rata basis or by repeating last year’s budget .
There will be always some uncertainties in every activity which may result in deficit or
surplus of funds after completion of works with respect to the amount sanctioned .

Fig 4.9 Amount utilized in category B

CATEGORY B
160
140
120
100
80
60
40
20
0
2018-19 2019-20 2020-21

Amount sanctioned Amount utilised

45
The amount sanctioned and the utilized amount on the category B for last 3 years is given
above. In this category also, there are unspent balances thus making the success of the
Programme uneven. Unspent balances arose due to the reasons like excessive allocation
against predicted excessive demand , lack of capacities in planning and implementation in
local levels, delay in the receipt of funds, and also other governance and administrative
issues. Though, it is necessary to look at the reasons for unspent balances , it is reasonable to
assume that all unspent balances that is reflected in the balance sheets as ‘unspent’ otherwise
there should be some minimum balances that needs to be maintained at each stage of
allocation for the continuation of the Programme in the new financial year until there are
some releases after the sanction of budget for whole year.

Fig 4.10 Amount utilized in category D

CATEGORY D
60

50

40

30

20

10

0
2018-19 2019-20 2020-21

Amount sanctioned Amount utilised

While analyzing the amount sanctioned and utilized for Category D , here also lies a small
gap between the amount sanctioned and amount utilized . The reasons for the unspent
balances are due to the lack of administrative staff for updating Management Information
System (MIS). MIS at the GP and block level are updated in the system with a time lag due to
lack of staffs and slow internet connections. Due to this time lag, expenditure already
incurred does not get reflected in MIS and unspent balance is shown more than actual
unspent balance at the end of financial year.

4.3.1 Conclusion

The major reasons for the unspent balances are of unscientific way of preparation of labour
budget at Gramapanchayath level. Labour budget is not prepared on the basis of demand. The

46
excessive allocation against predicted excessive demand , lack of capacities in planning and
implementation in local levels, delay in the receipt of funds, and also other governance and
administrative issues. And lack of administrative staff for updating Management Information
System (MIS). MIS at the GP and block level are updated in the system with a time lag due to
lack of staffs and slow internet connections. However , there are lot many reasons for the
unspent balances , the activities undertaken by MGNREGS under different categories has
contributed towards fulfilling the needs of people of Pattazhy Vadakkekara resulted in
improving the living standards of each and every individual and thereby resulting in the
overall local development of the panchayath.

47
 CONCLUSION AND SUGGESTIONS
CHAPTER 5
CONCLUSION AND SUGGESTION

5.1 Conclusion

48
This study has explored the role on MGNREGS in local economic development of pattazhy
vadakkekkara grama panchayath. From the foregoing discussions it is revealed that
MGNREGS has been contributing positively towards the local economic development of the
grama panchayath lately. MGNREGS leads to better financial security, better infrastructure,
better standard of living and women empowerment. MGNREGS is playing an important role
in the local economic development of Pattazhy Vadakekkara Grama panchayath. Under
category A they completed about 101 works, under category B they completed about 164
works and under category D they completed about 48 works for last three years. MGNREGS
did not undertaken any activities under category C in the respective panchayath for last three
years. The no. of works undertaken by MGNREGS is dependent on the demand raised for
work as well as employment. The total no. of works was 118,112 and 83 in 2018-19, 2019-
20, 2020-21 respectively. It is appreciable that the MGNREGS workers was able to complete
these works in the background of flood and COVID-19 pandemic occurred in the period of
study which helped the employment generation and thereby income generation to
MGNREGS workers during these hazards’ conditions. This had helped in the local economic
development of Pattazhy Vadakekkara Grama panchayath even in these situations. But still
the unpredicted hazards occurred during last 3 years had their respective impacts on the no. of
works undertaken by MGNREGS. MGNREGS workers had done their part for reviving the
damages caused by flood occurred in 2018-19 and 2020. Similarly, in 2020-21 the lockdown
and other conditions raised due to the COVID-19 pandemic resulted in a decreased no. of
activities. Concluding the study, it may be opined that MGNREGS has been reasonably
effective in local economic development through ensuring enhanced income generation. It
provided adequate employment to the unemployed sections and helped to uplift their standard
of living. Local economic development could be achieved by infrastructural development and
decreasing unemployment rate. The MGNREGS works were both public friendly and
generated the needful workdays to the registered MGNREGS workers. Pattazhy Vadakekkara
Panchayat consisting of 13 wards had a good record of MGNREGS activities. They provided
works for the livelihood of the MGNREGS workers during the COVID-19 pandemic. The
MGNREGS works that adequately generate income to the economically weaker sections
could improve their health care spending, better standard of living, sufficiency to meet day to
day domestic expenses, financial capability to support children’s education etc. So, the works
generated by MGNREGS resulted in wealth generation within the panchayat that improved
the basic standard of living and needs of the localities. It leads to the public economic
enhancement that ultimately leads to the local economic development of the panchayat.
49
5.2 Suggestion

 To improve the scope and quality of work done through MGNREGS, it is proposed to
rely on and expand the scope of merging of the MGNREGS with other government
livelihood and employment generating programmes.
 To establish MGNREGS as demand driven and bottom-up programme, labour budget
preparation should ensure the involvement of people at GP level and its regular
monitoring and reporting should be done by block and district level officials.
Individual beneficiaries under MGNREGS may be allotted work under MGNREGS
only after their written consent to GP. It would help the beneficiary to be more
accountable for the work demanded while reducing the possibility of fund allocated
being unspent under individual beneficiary scheme.
 Gram Panchayat should prepare the schedule of work on priority basis in consultation
with the Gram Sabha
 The Gram Sabha should invite written applications, as given in the guidelines of the
MGNREGA Act, from the residents of the village regarding number of days they are
willing to work for the upcoming project.
 Based on the actual number of days demanded and the required material cost
component, the labour budget should be prepared. There should be clear
communication between district, block, and GP levels regarding the finalisation of
labour budget. Gram Sabha needs to be made responsible for providing the labour
projection in tandem with block and district levels.

50