Impact of MGNREGA on Rural Agricultural Wages, Farm Productivity and Net Returns: An Economic Analysis Across SAT Villages

This study assessed the impacts of MGNREGA on labour scarcity, wages, cost of production and the linkages among wage rates in agriculture and non-agriculture employment. The study is based on field data of the semi-arid villages from Telangana and Maharashtra states under Village Dynamic Studies in South Asia (VDSA). The results reveal that the real wages for farm and nonfarm works exhibited upward trend especially after implementation of MGNREGA in both the states. The average daily wage rate of male farm worker has grown sharply after MGNREGA in both the states compared to almost negative growth rate of before MGNREGA. Beside farm wage, non-farm wage of male labour has also increased resulting shift in labour force from agriculture to non-agriculture. Both the farm and nonfarm wage has increased by almost 3 times during the period of MGNREGA implementation in some area, whereas MGNREGA wage has increased only by half of it. However, the perpetual phenomenon of gender wage inequality in rural labour market is continuing over the period (2001-2012). There has been a steady decline in labour use for some of the crops. The shortage of male labour for farm work has been more prominent, whereas the increased participation of female labour in some major crop confirms the feminization of agriculture. The share of labour cost formed a significant proportion of the total cost impacting on net returns. In order to address labour scarcity, technological developments that are amenable for mechanisation along with custom hiring facility is crucial. Further, capacity building programmes for skill augmentation especially for female labour is required.