Socio Research & Reform Foundation

The agriculture sector in India has been characterized with high supply of labour than demand, low wages, and limited options of earning livelihood. In recent past, due to the increased rural-to-urban migration and the inception of MGNREGS in 2006 and other public works, visible change came into the picture. Schemes like rural MGNREGS are found to be attractive in rural locations. But the government’s move to provide labourers under MGNREGS has not been free from criticism either.

All over the world, agricultural scientists and economists are concerned about the shortage of farm labour, and farm labourers are moving towards urban centers in search of nonfarm labour, the crisis is now reaching new levels. Some blame the implementation of the MGNREGA. The Union Rural Development Ministry states that MGNREGA is not solely responsible for the labor shortage and has validated the same with the following:

•    A study that found high non-farm wages having a more significant role in the diversion from agriculture than MGNREGA. Data from financial year 2010-11 suggests that 70 % of the work in the scheme have been generated during the agriculture lean season.

•    The Union Rural Development Ministry stresses that MGNREGA has rather given the bargaining power to the rural labour working all these decades with suppressed wages. For instance, land owners used to tie up labourers at a pre-determined rate for agricultural seasons to minimise production costs. But it is no longer so.

In spite of the ministry supporting MGNREGA and its positive implementation, the Tamil Nadu Agricultural University (TNAU) recommended that MGNREGA should be put on hold during the agricultural season, so that enough labour will be available for farm operations. It can be implemented during the lean period that will ensure them work for 120 days.  On the demand to suspend all MGNREGA works during the peak agriculture seasons, the ministry says it would be unfair to the surplus labour that may not find employment even during such time. It would be thus unfair to blame MGNREGA solely for the farm hand shortage. The shortcomings cannot be denied but the programme carries a more direct and positive impact on reducing the distress migration by providing work closer to home with decent working conditions. In Anantpur, Andhra Pradesh, the migration level came down from 27% to 7%. Subsequently distressed migration came down to 45% in 2009-10. In Sidhi district of MP, migration reduced by 60%. Though MGNREGA is not free of criticism, it has its positive aspect too which cannot be neglected.

The term “financial inclusion’’ has gained importance since the early 2000s. Financial inclusion is now a common objective for many central banks among the developing nations. As per a estimate by a TCS study India has second largest population around 135 million households which do not have access to formal financial services. It is now Govt’s agenda to bring people under financial inclusion.  Some of the major projects started by different institutions in India include:
•    In India, financial inclusion first featured in 2005, when it was introduced by K C Chakraborthy, the chairman of Indian Bank. Corporation Bank bagged SKOCH financial Inclusion Champion award-2011.
In January 2006, RBI allowed banks to appoint third party entities as Business Correspondents (BCs) to increase banking outreach through suitable technologies while adhering to the prevailing outsourcing guidelines. It has been mentioned earlier in our post “RBI working on major Financial Inclusion Scheme’’. For further reading, kindly follow the link:http://blog.srr-foundation.org/?p=318
•    The Adhar – enabled payment system plays a prominent role in facilitating financial inclusion.
•    RRBs and cooperative banks and other rural financial institutions to launch the Aadhar-enabled payment service to foster financial inclusion. It aims at insuring thousands of domestic workers, drivers in the NCR in cases of death, accidents or health emergencies.
•    Vijaya Bank has announced opening of 191 small branches under the Financial Inclusion (FI) village initiative. Gurgaon-based financial inclusion start-up Swabhimaanya has launched tailor-made insurance schemes for them.
•    SBI has recently proposed to open up 56 ultra small branches in 5 districts of Assam and one district in Manipur.