For NREGS households, kids’ education priority
REPORT Finds wages, asset creation account for 33% of income
NEWDELHI: How do beneficiaries of the National Rural Employment Guarantee Scheme (NREGS), which offers 100 days’ employment at minimum wages to rural households, like to spend their additional income earned from the scheme?
About 22% of rural households, the largest chunk, prefers to spend it on their children’s education, a finding that shows India’s poor value education as a step-ladder to better opportunities in life.
The next priority for households (17%) is savings, critical for the poor to avoid falling into poverty traps (usually through health emergencies), although economists often tend to view savings purely mechanically as deferred consumption, meaning money set aside for future consumption.
These are some of the findings from a l atest governmentfunded independent study on the socio-economic i mpacts of NREGS, an anti-poverty law enacted in 2005 by the previous United Progressive Alliance government. “Beneficiaries of MGNREGS assets accorded priority to education, savings, purchase of household items, debt repayment, health and medical expenditure, purchase of farm equipment, repair and construction of houses, in that order,” the study states. (see graphic)
The study focused particularly on “category B” works, which allows money to be spent not just for public works, but also individually-owned assets.
The study by the New Delhibased Council for Social Development was sponsored by the rural development ministry through the Hyderabad-based National Institute of Rural Development last year. It was led by economists Ashok Pankaj and Mondira Bhattacharya.
NREGS wages and asset creation now account for 33% of the total income of households that opt for the scheme, the study found. While the government spends close to ~ 55000 crore on NREGS, “there have been only a few studies on the impact of assets created under the programme”, according to Pankaj.
The rural-jobs programme allows four categories of public works for creation of rural economic assets.
These could be anything from, say, local irrigation ponds to cattle sheds. Under law, 60% of NREGS funds must be used for farm-based activities.
“That most households gave first priority to education is also important because it can improve India’s Human Development Index (HDI) because ‘average years of schooling’ is a key parameter used to calculate the HDI,” said Ravindra Bhadoria, an economist who worked for the erstwhile Planning Commission.
Source: CSD