MGNREGA Anthology {Part 3 of 7} : Sustainable Asset Creation

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Creation of sustainable assets that strengthen the livelihood resource base of rural areas is one of the key objectives of MGNREGA.

Since  the  inception  of  MGNREGA,  around 146  lakh  works  have  been  undertaken;  of  these, almost 51 per cent are works related to water (water conservation,  flood  control,  irrigation,  drought proofing, renovation of traditional water bodies and micro-irrigation),  and  over  19  per  cent  works  are related to rural connectivity. At such a scale, MGNREGA works have the potential to benefit rural communities by improving irrigation facilities, enhancing land productivity and connecting remote villages to input and output markets.

Overall, studies suggest that while many productive assets have been created on the ground owing to good planning  and  execution  at  the  micro-level,  there  is need for more focussed implementation with regard to  the  creation  of  durable  and  sustainable  assets under MGNREGA.


When  planned  and  executed  well,  studies indicate  a  positive  Return  on  Investment for  MGNREGA  assets;  a  study  observed  a Return on Investment of over 100 per cent in a single year of use.

MGNREGA  has  faced  criticism  on  the  quality and  sustainability  of  the  assets  created  under  it. Critics of the Scheme argue that since employment generation  is  the  primary  objective  of  the  Act,  the works undertaken are labour-intensive, These works tend  to  be  non-durable  and  have  limited  use. On the other hand, other scholars suggest that earthen works can also be durable if planned, designed and constructed properly.

Return on Investments/Cost Recovery

Micro-canal systems were found to  have  the  highest  rate  of  return  compared  to  all other  MGNREGA  works  (more  than  200  per  cent within a year).

It must be noted that while the renovation increased the crop productivity by around 6–15 per cent, the bulk of the benefits for the farmers came in the form of diesel saving as they were able to replace costly well-irrigation.

Factors  like,  the  type  of  work  being  undertaken, technical  design,  and  the  geological  differences in  areas  of  implementation  are  also  crucial  to determining  the  average  recovery  cost.  Intra-state variation was apparent in the case of Gujarat where public  assets  created  in  Sabarkantha  district  were doing better than their counterparts in Junagadh in terms  of  economic  benefits  generated.

Perception based Surveys

Research  indicates  that  wherever  village communities have taken enthusiastically to the idea of MGNREGA and where their enthusiasm has been supported by an able, well-staffed administration and capable local governance institutions and leadership, results have been positive. In other instances, lags in process  and  procedure  have  reduced  the  efficiency of assets.

Technical Quality

The  technical  design  of  an  asset  takes  into  account its  geographical  location,  feasibility,  strength  of  the physical structure, etc. The sustainability of an asset depends  to  a  large  extent  on  the  soundness  of  its technical  design.

Different  assessments  on  works  like  plantations point  to  the  criticality  of  planning  and  careful execution. In a study in Jharkhand, the average life of  plants  was  found  to  be  only  two  to  three  years (as  opposed  to  15  and  above  years  of  productive life  depending  on  the  type  of  tree),  due  to  lack  of planning in selection of the location for these works as well poor maintenance.

In  other  places  where  plantation  activities  have been  well-planned,  saplings/trees  were  shown  to have  a  high  survival  rate.  For  instance,  in  Madhya Pradesh,  around  71,000  saplings  were  planted  over 175  hectares  of  land  under  a  large-scale  four-year drought-proofing and greening project. The survival rate  of  the  sapling  was  over  90  per  cent  (after  four years).

These variations may be reflective of careful planning,  execution  and  maintenance  required  for ensuring the feasibility and durability of works A  research  study  of  Rajasthan  also  concluded that  inadequate  staff  was  a  major  reason  for  poor quality  and  effectiveness  of  assets.

A  major  weakness  of  water-related  works  under MGNREGA  has  been  the  excessive  concentration on  excavation  and  desilting  of  ponds  without corresponding  work  on  treating  their  catchment areas or on the construction of dams based on earthen engineering.


Studies indicate that the completion rate of works, just as in the case of quality of assets, is dependent on  district/region-specific  implementation of the Scheme and is affected by factors such as  poor  planning,  lack  of  technical  support, irregular flow of funds, and delayed payment.

Under  the  reporting  system  of  the Scheme  (MIS/MPR),  spillover  works  (works  not completed  in  the  preceding  year)  are  reflected  as ongoing works. Thus the completion rate in any year is cumulative, indicating a completion percentage of  both spillover works from the previous year and new works  in  the  current  year.

Studies  suggested  the  need  for  more effective planning and giving priority to selection of smaller  structures  for  soil  and  water  conservation since this may improve the completion rate for works and accrue the desired benefits to stakeholders.

Irregular  flow  of  funds  was  another  reason for  incomplete  works,  as  concluded  by  a  study in  Meghalaya  and  Sikkim.

In  Mandla,  Madhya Pradesh and Narmada, Gujarat, a report found that while people started to work on MGNREGA, due to delay in wage payments they shifted back to lowerpaying works. Lack of technical support to communities, on how to plan and when and where to start a work is also a  key  factor  in  non-completion  of  works.  A  large number of works, particularly those re lated to water conservation, remain incom plete, either due to lack of technical support to GPs or the onset of monsoons.

It  is  important  to  note  that  findings  related  to quality, durability and rate of work completion suggest that the problem is not in the design of the Act but the usefulness of the Scheme is dependent on the strength of its implementation at the field level. For instance, lack of planning in areas like potential demand and need for MGNREGA works, participation of villagers and prioritisation of works in the Gram Sabha (GS), and focus on creation of productive assets based on principles of watershed, etc., can greatly reduce the development potential of MGNREGA.


A study on best- performing assets in Bihar, Gujarat, Kerala and Rajasthan, estimated a higher RoI of 116 per cent for water-related public assets, due to the number of people they benefit, as against a RoI of 35 per cent for private assets, in a single year of use. However, private assets were found to be better maintained and hence more sustainable, due to definite ownership and rights.MGNREGA allows for asset creation, such as water conservation works, provision of irrigation facilities, land development, etc. on public land.

The Act also provides  for  taking  up  of  works  such  as  irrigation, horticulture and land development, on private land belonging  to  the  Scheduled  Castes  (SCs)  and  the Scheduled  Tribes  (STs)  or  families  below  poverty line (BPL), or to the beneficiaries of land reforms or to those under the Indira Awas Yojana (IAY) of the Government of India (GoI) or that of the small or marginal farmers as defined in the Agriculture Debt Waiver and Debt Relief Scheme, 2008 of the GoI, or to the beneficiaries under the Scheduled Tribes and Other  Traditional  Forest  Dwellers  (Recognition  of  Forest Rights) Act, 2006 Studies show that while private assets  are  preferred  by  beneficiaries,  public  assets benefitted a larger area and more people, leading to higher  returns  on  investments.

Public  assets  are  prone  to  destruction  because  of  neglect  in  maintaining  them,  in  the absence  of  strong  local  institutions—the  classic tragedy  of  the  commons.  With  defined  ownership, assets  on  private  land  are  relatively  well  taken  care of and better maintained. In fact, the development of private property under the Scheme has the potential to contribute to more sustainable livelihood creation. On the other hand, community upkeep of public assets  is  limited,  possibly  due  to  ambiguity  over ownership  and  usage  rights.

The possible reasons for the non-maintenance of these assets could  be:  diffusion  of  benefits  over  a  large  group  and  less individual  ownership,  disproportionate  benefits accrued  to  influential  groups,  or  weak  Panchayati Raj  Institutions  (PRIs).

Thus, the choice between the two kinds of assets, in some cases, provides for a paradox between  equity  (since  community  resources  can potentially benefit more people) and effectiveness (as works on private lands appear to be better maintained and more sustainable).

On  effective  utilisation  of  resources,  a  similar comparison  may  also  be  drawn  between  creation of  new  assets  and  renovation  of  old  assets.  A  study found that while creation of new assets was beneficial, investments  in  expanding,  deepening,  improving and  renovating  existing  assets  provided  the  highest returns;  existing  assets  renovations  had  a  return  of  136  per  cent,  much  higher  than  the  return  on  new assets created which was 65 per cent


Most  assets  created  under  MGNREGA  are used for multiple purposes. As studies in Bihar, Rajasthan,  Gujarat,  Kerala  and  Madhya Pradesh have shown, almost 50 per cent of the assets  surveyed  were  designed  for  single-use such as, irrigation, but were de facto multiple- use  structures  (being  used  for  household purposes,  groundwater  recharge,  livestock etc.). This reflects the potential of MGNREGA to contribute to water and livelihood security in  the  village  ecosystem.  For  assessing  the development impact of MGNREGA assets, it is important to take into account the nature and multi-utility of each asset.

MGNREGA  may  be  viewed  as  the  world’s largest  laboratory  for  community-based  multi-use water services (MUS). Thus in order to quantify the impact  of  MGNREGA  and  benefits  accrued,  it  is important to take into account the nature and multiutility of each asset. Efficient MUS also emphasises the  need  to  strike  an  appropriate  balance  between sustainable  infrastructure  investments  and  water governance. A study conducted in  Chitradurga,  Karnataka,  concluded  that  the MGNREGA  activities  reduced  the  vulnerability of  agricultural  production,  water  resources  and livelihoods to uncertain rainfall, water scarcity and poor soil fertility.


MGNREGA with its inter-sectoral approach opens up  opportunities  for  convergence  with  different programmes.

Andhra Pradesh: Chittoor demonstrates an example of effective convergence of MGNREGA with horticulture. Under the  State’s  Horticultural  Programme  and  MGNREGA,  the  cumulative  area  under  mango  horticulture  plantations  gradually increased from less than 30,000 acres in 2007–08 to more than 70,000 acres in 2009–10. As such, Chittoor has  become  the  highest  performing  district  in  Horticulture  plantations  in  the  state.

Madhya Pradesh: The KapildharaScheme in Madhya Pradesh is a convergence between MGNREGA, agriculture and horticulture departments. The Scheme provides farm ponds, dug wells, tanks for increasing water availability on the lands of farmers who have more than 1 hectare of land and belong to SC/ST and BPL families.

West Bengal: In Bankura, a convergence on the principles of Integrated Natural Resource Management (INRM) was taken up in MGNREGA. Landless women formed Self-Help Groups (SHGs) to lease barren land for 25 years, under a crop sharing scheme.


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