02/05/2017 9:12 AM IST | Updated 02/05/2017 9:12 AM IST

How MGNREGS Can Help The Rural Poor 'Step Out' Of Poverty And Climate Vulnerability

A safety net for the poorest and most vulnerable populations.

Recently there has been a lot of debate in academic and policy circles about mainstreaming climate concerns in development programs in order to build the resilience of vulnerable communities. One such development initiative is the Mahatma Gandhi National Employment Guarantee Scheme (MGNREGS), whose main objective is to reduce rural poverty by providing a legal guarantee of 100 days' paid labour a year to every rural household in India and building community assets that support local livelihoods. The dual focus of MGNREGS on wages and assets, and its emphasis on natural resources management makes it an effective mechanism for co-creating benefits of social protection and climate resilience for vulnerable rural communities. However, is there scope to improve the design and implementation of the program to ensure that the rural poor "step out" of poverty and climate vulnerability? What measures can be taken to create new opportunities in order to enhance their resilience to long-term climate change?

[C]ommunity assets created under MGNREGS can play a crucial role by creating additional livelihood opportunities and reducing climate vulnerabilities.

Let's first take a step back and understand the larger vulnerability context in which MGNREGS operates. Personal assets—both physical and financial—usually provide the first layer of safety net in case of a climate shock such as flood, drought or a cyclone. The National Sample Survey Office's (NSSO) report on Household Capital Expenditure in India provides data on the average value of assets held by each "household asset holding class." A household asset holding class is defined as "the 10 decile classes of the rural All-India distribution of households by asset holding size." This means that decile 1 in the chart below comprises the poorest 10% of rural households in terms of their holding assets and decile 10 denotes the richest tenth. Almost all physical and financial assets are included.

Source: NSSO

If we count the personal assets of the poorest 50% of the rural population who are more likely to opt for MGNREGS work, it is clear that there's hardly anything to fall back on in case of a climate shock or disaster. In addition, the physical assets will also be prone to these shocks, rendering them unproductive in most cases.

Given this context, the bi-focal lens of MGNREGS's wages and assets provide an important safety net for the poorest and the most vulnerable population by addressing the immediate and underlying socio-economic risks facing them. Let's analyse each of them to understand their contribution in helping the poor "step out" of poverty and vulnerability. Average wage rate per day per person under MGNREGS in 2016-17 was ₹214. Assuming that a drought-affected area gets a total of 150 days of work, income from MGNREGS wages will be ₹32,100.

Now let's take a look at rural consumption. The chart below based on NSSO 68th round, Household Consumer Expenditure shows that rural monthly per capita expenditure for 2011-12 was approximately ₹1279. This amounts to an annual consumption expenditure of ₹15,348 per person.

Source: NSSO

Considering an average household size of five and assuming that one person's income supports two family members, it's evident that the MGNREGS wages are just enough for the rural poor to "hang in" there. They do not provide any cushion for the poor and vulnerable to "step out" of poverty and climate vulnerability.

This is where the community assets created under MGNREGS can play a crucial role by creating additional livelihood opportunities and reducing climate vulnerabilities. Several studies have shown the potential of MGNREGS works to generate environmental benefits such as groundwater recharge, soil, water and biodiversity conservation, sustaining food production, halting land degradation, and building resilience to current climate risks such as moisture stress, delayed rainfall, droughts and floods. However, for MGNREGS to systematically address current climate variability and long-term climate change, the following elements need to be reinforced in planning and implementation:

  1. Mainstreaming climate change in MGNREGS planning: Choice of works should be informed by a vulnerability analysis of the region, preferably at the block level.
  2. Designing climate-resilient infrastructure: With projections such as more intense rainfall, salinity, sea-level rise, physical infrastructure such as dams, farm ponds etc. can be subject to damage and therefore, technical and engineering specifications need to consider such impacts and associated risks.
  3. Convergence with other development schemes: This will ensure integrated natural resource management. Convergence guidelines with various schemes have already been issued and attempts should be made to reduce the number of stand-alone MGNREGS works as much as possible.

These measures will ensure the durability and productivity of assets that are being created under MGNREGS. There are several technical assistance programs, supported by bilateral and multilateral organisations and research institutions, which are coming up with innovative approaches to implementing these measures within the MGNREGS framework.

Addressing climate vulnerability often requires a multi-faceted approach. Such programs will need to be aligned with targeted climate change programs...

So, will this create enough opportunities to bring the rural poor out of poverty and climate vulnerability? The synthesis report "Environmental Benefits and Vulnerability Reduction through Mahatma Gandhi National Rural Employment Guarantee Scheme" by IISC, Bangalore in collaboration with the Ministry of Rural Development and GIZ shows a reduction in Agricultural Vulnerability Index in all four study districts in the range of 4–56%. The study also shows a reduction in Livelihood Vulnerability Index in all four districts in the range of 4– 81%. Implementing the above measures is expected to further reduce vulnerabilities of the poor and marginalised people who tend to benefit most from MGNREGS.

While there is a growing body of evidence on the climate benefits of development and social protection programs, addressing climate vulnerability often requires a multi-faceted approach. Such programs will need to be aligned with targeted climate change programs in order for the rural poor to "step out" of poverty and climate vulnerability.

For example, a part of MGNREGS labour could be used to pay for premiums for agricultural insurance schemes such as the Weather-Based Crop Insurance Scheme (WBCIS), for tenant farmers and the landless rural poor. Steinbach et al., in their report "Aligning social protection and climate resilience: A case study of WBCIS and MGNREGA in Rajasthan" suggest such a layered approach.

The Central government as well as the administrative machinery of MGNREGS have been flexible and adaptive to the needs of the beneficiaries, such as the recent increase in the number of workdays from 100 to 150 in drought-affected areas. It is important to incorporate the findings from these on-the-ground social experiments that have the potential to deliver huge developmental and climate gains. This will have major implications for India's climate commitments under the Paris Agreement.

Koyel Kumar Mandal is Climate Change Expert with IPE Global. These are his personal views.

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