Does NREGP make sense in Kerala?

Does NREGP make sense in Kerala?

The National Rural Employment Guarantee Programme (NREGP) has been one of the remarkable initiatives of the UPA government introduced with an aim of eradicating poverty in the rural areas. The National Rural Employment Guarantee Act envisages to provide for the enhancement of livelihood security of the households in the rural areas of the country by providing at least one hundred days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work .As per the requirement of the National Rural Employment Guarantee Act (NREGA), all states including Kerala had implemented this programme. In this note, I would like to argue that NREGP in its present form is not relevant in Kerala to a great extent given the peculiar socio-economic structure of Kerala economy.

There are mainly two reasons for this argument. First, NREGA calls for guaranteeing job on demand within a stipulated time period. It is in this context, the relevance of this programme has to be analyzed in Kerala. For, Kerala has been facing acute unskilled labor shortage especially in the agricultural sector. It is an established fact that the reported decline in the agricultural production like paddy is on account of the shortage of laborers and subsequent increase in the cost of production. Moreover, the recent trend in Kerala’s labor market also sheds light on this fact. A recent rough estimate shows that there are almost thirty five lakhs of immigrant workers, both skilled and unskilled, employed in Kerala from states like West Bengal, Orissa, Assam etc who work in areas like masonry, carpentry, constructions etc. This is not surprising given the peculiar nature of Kerala economy wherein most of the people are educated and a major portion of the work force of the state has migrated in search of job to other parts of the country or world. Thus, the inflow of labour from other states to Kerala reinforces the argument that Kerala is running short of labour. In such a context, a programme which calls for providing job to natives on demand appears to be irrational.

Secondly, NREGA envisages legal protection for workers to receive a minimum wage. Here, it is quite well known that existing wage rate in Kerala had been always higher than the stipulated minimum wage. On an average, the present wage rate in the unorganized sector in Kerala is about Rs. 350/- Per day for male workers and Rs 250/- for female workers. In such a scenario, the relevance of NREGP as a scheme to ensure minimum wage is questionable.

The foregoing description outlines a broad picture of the importance of the NREGP in the specific context of Kerala economy. Of course, there can be grey areas within Kerala like Adivasi belts in Wayanad and Palakkad districts where this programme could be relevant from the point of view of its stated objectives. Apart from that, this programme does not appear to be useful and there by effective in most other parts of Kerala.

The crux of the analysis is that since the general socio – economic profile of Kerala has been completely different in terms of educational attainment; standard of living etc from the socio-economic profile of rest of the country, a programme envisaged at the national level need not be always important in the specific context of a state like Kerala.