Rural Labour Market and Farmers Under MGNREGA in Rajasthan

This paper analyses changes in labour market in rural Rajasthan after the introduction of MGNREGA in April 2006. The study attempts to answer the following questions: (1) How does MGNREGA influence rural labour market? (2) Which segment of the labour force seeks job under MGNREGA? (3) What are the MGNREGA-induced changes in agriculture and allied sectors? Marx’s concept of relative surplus population is used to analyse different categories of labours participated in MGNREGA. The study is based on a sample survey of 400 rural households randomly selected from four districts in Rajasthan. The study found that there was a substantial fall in the amount spent per rural household under MGNREGA in Rajasthan since 2011–2012. Moreover, MGNREGA has not been effective in attracting crisis-ridden farmers and farm labours because of its irregular employment and a lower daily wage rate as compared to spot wage. Rural labours, whose reservation wage is less than or equal to wage rate in MGNREGA, do supply labour to the Scheme, and a major share of the workforce in MGNREGA has never been part of the labour market nor do they intend to participate outside MGNREGA. It was found that large and medium farmers wanted to stop MGNREGA in agriculturally prosperous districts. Conversely, in agriculturally less developed districts in Rajasthan, large farmers did not hold MGNREGA responsible for labour shortage and wage hike in the farm sector. © 2018, Indian Society of Labour Economics.