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Employment Guarantee and Crisis Response

This article looks at the National Employment Guarantee Act and related programmes from the perspective of responding to sudden (and rapid) onset of events like economic crises and natural and man-made disasters. It advocates using the NREGA as part of the rapid response to crises and disasters. Particular attention is focused on the aggregate impact of localised disasters/crises, which may be large and need to be addressed in disaster management strategies in India.

Employment Guaranteeand Crisis Response

This article looks at the National Employment Guarantee Act and related programmes from the perspective of responding to sudden (and rapid) onset of events like economic crises and natural and man-made disasters. It advocates using the NREGA as part of the rapid response to crises and disasters. Particular attention is focused on the aggregate impact of localised disasters/crises, which may be large and need to be addressed in disaster

management strategies in India.


he National Rural Employment Guarantee Act (NREGA) 2005 and its adoption have resulted in a debate highlighting many interesting issues relating to employment, empowerment and poverty reduction. However, the contribution that NREGA can make to crisis mitigation has not been discussed at all. This article looks at the employment guarantee programme from the perspective of responding to sudden (and rapid) onset of events like economic crises, and natural and man-made disasters. It focuses attention on rapid response mechanisms which need to be strengthened within the NREGA.

Employment Programmes and Disasters

The possibility of using special employment programmes or public works to provide work and income in the aftermath of a disaster is not a new one. Yet in February 2005, when I was visiting some tsunami-affected districts in Tamil Nadu as an ILO member of an Asian Development Bank-World Bank-United Nations damage assessment mission, I was a little surprised to observe that the employment generation programmes then in operation in the state were not being deployed in the affected areas of the districts. For several reasons, when responding to a crisis one should try to take advantage of existing programmes, before trying to set up totally new ones. The rationale is not difficult to see. In any administrative system it takes time to set up a new programme and deliver programme benefits. In contrast, an existing programme can be expanded and extended much more easily and rapidly: the guidelines are in place and government staff already knows how to run it. I therefore felt that the local administration in the tsunami-affected districts should take advantage of ongoing national programmes like the Sampoorna Grameen Rozgar Yojana and expand operations in affected areas in the district.1

Speed Is Essential

When such crises and disasters occur, once some immediate steps to provide food and shelter have been taken, those who have lost their means of livelihood need work. This is vital for their survival, for their human dignity and to help to revive the local economy. Speed is of the essence, especially after such sudden onset of disasters as earthquakes, tsunamis, floods, tropical storms, volcanic eruptions and landslides.

A very effective short-term instrument is to provide wage employment opportunities in clearing debris and restoring the infrastructure. This has been done in many parts of the world in the immediate aftermath of disasters. Wherever possible, this should be followed by providing credit, training and other inputs needed to restart agriculture and industry, rebuild dwellings and public infrastructure, and to promote, where appropriate, new activities.2

This article advocates using the NREGA as part of the rapid response to crises and disasters. This is not to suggest that its principal objective of providing at least one 100 days of work of guaranteed wage employment each year should be diluted in any way. On the contrary, the intention is to give fuller meaning to the words “livelihood security” enshrined in the same preamble to the act.


The NREGA 2005 was drafted to meet the needs of a situation of widespread rural unemployment and underemployment in different parts of India, especially in the poorer districts. While it can take account of likely seasonal variations in the labour market, it is not designed specifically to handle sudden onset of disasters during the course of the year.

Under Schedule II of the Act, paragraphs 1-5 envisage the issue of a job card, valid for at least five years at a time, entitling the holder to up to a maximum of 100 days of employment (which is the limit set for the household).3 Applications for work may be made only by job card holders, who may do so as and when they choose. Since the employment and poverty situation may be changing over the course of a year due to unanticipated events, there could be situations where people who do not possess a job card need work immediately. One such situation is where a disaster has occurred and many households which are normally above poverty find their assets have disappeared or income sources have dried up. It is essential, in this kind of situation, that a fresh round of applications for job cards is immediately undertaken and work is provided quickly to both existing and new job cards applicants/holders. The limit of 100 days of work per household should be waived when an area has been declared as disaster-affected.4

Local Disasters

A further problem is that crises and disasters may be localised. Researchers in Latin America have looked at 13 countries and find that the total impact of “everyday disasters” may be much larger than that of the so-called “major” disasters.5 I am not aware of similar studies for India, but the situation is not likely to be very different. This is certainly a subject on which there is scope for new field-based research.

If indeed there are a large number of localised sudden onset hazards, resulting in disasters, one would not be surprised if they do not get reported in the media and or even noted and reported to the state government by the local authorities. Such disasters might, in the Indian context, take the form of destruction of, or damage to

Economic and Political Weekly March 4, 2006 assets, like land, dwellings, cattle, equipment and working capital and stocks, through localised floods, cyclones or strong winds, landslides, etc.

Again, for a whole variety of reasons, there can be sharp and sudden downturns in local economic activity which may result in acute distress for the affected groups. This could arise from, for example, a sudden shortage of a key raw material, closure of a particular market or successful emergence of a rival source of supply. While the causes may be local, regional or even global, the consequences may be localised.

Such sudden onset of events at the local level have sharp and severe impacts on the labour market and poverty. If indeed the impact of such local disasters/crises is large in the aggregate, then this is something that needs to be addressed in disaster management strategies in India. One implication is highly relevant here. The National Rural Employment Guarantee Scheme must have the built-in elasticity and capacity to respond to disasters and crises, particularly those of a localised nature, by expanding wage employment opportunities with minimum loss of time and aiding the recovery of the affected local economy.

Special operating procedures for dealing with sudden onset, including localised, of crises and disasters need to be developed. An emergency fund under the NREGA programme should be set up at the state level with clear rules governing its use. Arrangements must be in place to provide job cards, take applications and provide work from victims at short notice.

Administrative procedures to declare an area as crisis/disaster-affected may need to be updated to take account of the prevalence of localised economic crises and disasters. The operating procedure, which should be spelled out, should involve declaring the area as crisis-affected, based on certain criteria. This should, in turn, lead to the NREGA programmes providing local work opportunities without delay, and waiving the limit of 100 days work per household.

The range of work opportunities should be widened to cover the types of work needed to be done in the aftermath of a disaster/crisis. Fortunately, Schedule I of the Act, paragraph 1 (ix) already makes it possible to expand the types of work that may be taken up.6 The list of permissible work should be expanded by an appropriate central government notification. This should be done now; we should not wait until crises and disasters have occurred. The types of work which would be required in the aftermath of a disaster should be added to the list. This should include, among others, clearing of debris, clearing of agricultural, pastoral and plantation land (after a tsunami), and simple repair/ restoration of the infrastructure using labour-based methods.

Monitoring and Early Warning Systems

Finally, I would like to draw attention to the importance and potential uses of the information that could be generated by the NREGA programme. If data on job cards, applications for work and the work provided are made available to researchers with suitable breakdowns by worker characteristics, by month and by panchayat (or some other level of aggregation below the district), they could be analysed to provide insights into how the rural labour market works over the year. It would also make it possible to identify and examine sudden surges in the number of applicants for work under the NREGA programmes at the local level, which may indicate the occurrence of local level crises or disasters. These can then be probed in greater depth, looking at other variables as well. The findings should be useful to administrators and NGOs as well.




1 The district authorities, who were doing an excellent job under the most trying circumstances, appeared to favour my suggestion. This suggestion was included in the Report of the Mission. See Asian Development Bank-United Nations and World Bank: India Post Tsunami Recovery Programme: Preliminary Damage and Needs Assessment, New Delhi, March 8, 2005, p 75. This is available on the web: http://

2 In this article, I draw on the work of the ILO InFocus Programme on Crisis Response and Reconstruction, with which I was closely associated from December 1999 to January 2003 and some subsequent work as an ILO consultant. The views expressed are, however, entirely mine. More details of the work of this programme are available on employment/recon/crisis/index.htm .

3 Schedule II of the Act outlines conditions for guaranteed rural employment under a scheme and the minimum entitlements of labourers.

4 Chapter II, paragraph 4 provides a possible window for this: “The central government or the state government may, within the limits of its economic capacity and development, make provisions for securing work to every adult member of a household under a scheme for any period beyond the period guaranteed under subsection (1), as may be expedient.”

5 See International Federation of Red Cross and Red Crescent Societies, World Disaster Report 2002: Focus on Reducing Risk, Geneva, 2002, p 11.

6 This clause allows for “any other work that may be notified by the central government in consultation with the state government”.



Director, National Institute of Public, Finance and Policy

The mid-year review of the Indian economy for 2005-2006 presents the economic scenario with cautious optimism. Despite the severe fiscal imbalance, sharply increasing oil prices and a poor political climate for reforms, the economy has registered a growth of over 8 per cent in the first-half of the current year.

Contents: Preface, List of Tables, Introduction; Macroeconomic Dimensions and Prospects; Fiscal Imbalances and Consolidation Attempts; Tax System Reform in India: Achievements and Challenges; Public Expenditure Policy: Trends and Reform Issues; Regional Policies, Resource Flows and Regional Equity in India; In Conclusion; References; Comments on the Review by the Discussants; Annexure.

81-7541-297-6 / 2006 / 202pp / Rs 450

Shipra Publications

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Economic and Political Weekly March 4, 2006

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