Scholarly article on topic 'National Rural Employment Guarantee Act: An Effective Safety Net?'

National Rural Employment Guarantee Act: An Effective Safety Net? Academic research paper on "Economics and business"

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IIMB Management Review
OECD Field of science

Academic research paper on topic "National Rural Employment Guarantee Act: An Effective Safety Net?"




The success and growth of Indian information technology (IT) service firms over the last decade has been built on the 'linearity' model of operation, wherein revenue expansion implied a proportionate increase in human resources. While the linear business model has served companies well in the past, its long-term sustainability is now being questioned on the grounds of organisation size, manageability, and rising costs.

Zyme Solutions Inc (Zyme), a fully outsourced hosted data intelligence service provider to the high-tech vertical market, has enjoyed spectacular growth over the last few years by building its business around a non-linear business model. Prof D

V R Seshadri spoke to Chandran Sankaran, who founded Zyme in 2004, about how the Zyme business model was conceptualised and grown. Sankaran's previous experience in consulting and enterprise software enabled him to see that it was possible to build a business by encapsulating deep domain knowledge in a software platform. Simultaneously he was attracted by the business model of outsourcing, realising that the traditional model of enterprise software—first building a software application and then trying to educate customers on how to use it—was not working.

Zyme combines the standardised platform aspect of a software business with the end-

to-end business process value of a services company. Zyme helps customers derive benefits such as incentive cost optimisation, in channel inventory management, revenue accounting and audit risk compliance. While in theory the model may appear easy to replicate, Sankaran is confident of his company's first-mover advantage in the domain and the market space. The shift to a non-linear model, according to Sankaran, would require ITES companies to change their mindset fundamentally, from focusing on the pool of people to the market problem, and defining, building, and selling the solution footprint. Reprint No 10103


There has been a growing interest in understanding the role of emotional intelligence (EI) in improving the performance of business managers. The motivation to understand this construct stems from the prevalent view that some individuals of seemingly average intelligence do well in life, whereas others struggle with life's challenges despite possessing a high IQ. Therefore, general intelligence may not necessarily be a good predictor of success in life, and other attributes may be better determinants. EI is different from traditional views of intelligence based on cognitive factors, and

connotes a different kind of aptitude that is founded on non-cognitive aspects of behaviour. Further, research has established EI as the sine qua non for leadership. The paper establishes the link between the yoga way of life—as propounded by the sage Patanjali in his Yoga Sutras, whose guidelines include ethical and moral standards of living in addition to postural and breathing exercises—and EI, and proceeds to study the impact of the yoga way of life on EI using data collected from 60 managers in a business enterprise. The participants in the intervention were divided into two groups—the yoga group

and the control group—and were given the requisite training inputs. A 33-item self reporting EI scale was used to measure EI for both the groups, before and after the study. The study reports positive results in terms of enhanced EI due to yoga theory and practice. These results underscore the importance of the yoga way of life as an integral element for improving managerial performance in organisations; however, there is a need to further explore this construct in greater detail. Reprint No 10104



The National Rural Employment Guarantee Act (NREGA) of 2005 was aimed to be an effective livelihood security net for rural households by providing one hundred days

of guaranteed wage employment every year to households where adults volunteer to do unskilled manual work. While the Act itself is considered sound, it remains to be seen

whether the programme can deliver on its promises, and how well it is aligned to the ground realities. An analysis of the data provided by the 62nd round of the National

Sample Survey Organisation (NSSO) gives important pointers to make the NREGA programmes more effective; these include alignment with agriculture and its seasonal pattern, ensuring the participation of the underemployed, active participation of village communities, and better awareness of the various NREGA schemes. For a discussion of the ground realities, IMR brought together a panel of experts who have been closely involved with the implementation of the NREGA. Speaking on behalf of Dr Mihir Shah (Co-Founder and Secretary of Samaj Pragati Sahayog, an NGO committed to alternative development), Prof Rajalaxmi Kamath emphasised the macroeconomic significance of the NREGA, in particular its potential to regenerate rural livelihoods, agriculture, the environment, and to kick start the reform of the public sector in rural development. It would also act as a multiplier based demand stimulus for the rural population, and public investment through the NREGA schemes would pull in private investment, thus stimulating growth. However, to realise the full potential of the NREGA, it is essential to strengthen and professionalise the gram panchayats, build capacity in the villages, converge with other like-minded schemes

for rural development, and facilitate civil society-state partnerships. Prime among the challenges faced by the NREGA according to Prof S Madheswaran (Centre for Economic Studies and Policy, Institute for Social and Economic Change), are those of addressing the unemployment crisis in rural areas, and contributing to the village economy in a sustained manner. The NSSO figures indicate an acceleration in employment growth between 1999 and 2005, but side by side the average unemployment growth also increased. Thus, the increasing number of self-employed is not a sign of economic wellbeing, but a pointer to the lack of regular job availability. Employment scarcity is pushing the rural people to petty, low-paying self-employment, and the increase in employment figures may be more an outcome of survival strategy than a demand led spike.

Hailing the NREGA as the first legal entitlement for the poor towards the right to livelihood, Aruna Roy (Founder, Mazdoor Kisan Shakti Sangathan, Rajasthan) highlighted aspects of the Act such as the provision for the right to apply for, demand, and choose work, a clear schedule of rates and unemployment allowance in case work

is not provided, and transparency in proceedings with regular social audits and a grievance redressal system. However, the enabling processes, such as the modalities of application, management, and choice of works, access to information, timely disbursement of wages, and the systems for social audit and grievance redressal are yet to be satisfactorily functional. Mr P Ravi Kumar (Secretary to the Government of Karnataka, Rural Development and Panchayat Raj Department) detailed the implementation challenges, which included equipping and empowering the gram panchayats—the key agency in the NREGA scheme—to perform their roles, harnessing the NREGA for asset creation rather than just providing jobs, ensuring the participation of women, using technology effectively in the system, and ensuring community ownership of the NREGA.

Prof Trilochan Sastry, IIMB, made practical suggestions to combat the administrative problems, such as effective utilisation of the budget for administrative expenses towards capacity building and training, and a legal provision to form NREGA related labour associations. Reprint No 10105