Popular perception of NREGA’s performance is as much a victim of unscrupulous sarpanchs, block and village officials and local politicians as of analysts. While tales of greed and corruption have become a staple of media reports, analysts have found an easy target, one vulnerable to revealing a barrage of averages of how unsatisfactory its performance has been and the meagre consequent trickle of benefits to the poor segments of the rural population. Yet the juggernaut of NREGA continues to roll in an ever expanding political constituency. While the underlying economic rationale of workfare gets diluted or blatantly ignored through hikes in NREGA wage rates and substitution of private assets for public assets, the financial commitments have grown by leaps and bounds. Whether the distribution of benefits has become more skewed in favour of the relatively affluent and must therefore be corrected is an issue that is submerged in the official rhetoric of empowerment and course corrections through social audits. A deeper probe is timely, going well beyond largely descriptive statistics that inform the public discourse, but fall short of policy insights. Our analysis, based on a large survey of households and other stakeholders in three states (viz. Rajasthan, Maharashtra and Andhra Pradesh) conducted in 2007-8 is motivated by this concern.

Let us first consider the targeting accuracy in terms of participation.

The poor and non-poor (using the official poverty line) were equally distributed among the NREGA participants in Rajasthan (50.22 per cent and 49.78 per cent, respectively). Note that per capita income used here is net of NREGA earnings. Given the poverty cut-off point of Rs 450, those with monthly incomes below Rs 300, i.e., 24 per cent of the participants, are classified as acutely poor. At the upper end of the distribution, i.e. those with incomes exceeding Rs 700 per capita, are classified as relatively affluent. About 20 per cent of the participants were thus relatively affluent. It is surmised that this is a direct consequence of high NREGA wages (relative to agricultural wages) that weakens the self-selection of the poor in workfare.

... contd.