Asset creation in private lands using NREGA: Problems & opportunities

National Rural Employment Guarantee Act (NREGA) is primarily a programme aimed at creating public assets that would be useful for the society at large. When NREGA was created, it relaxed this principle by allowing projects in private lands of selected marginalised communities including SCs and STs. The Minister for Rural Development is now trying to extend this by permitting works in private lands owned by small and marginal farmers who are not SCs and STs.

This proposal has been welcomed by some like Mihir Shah and has been sharply criticised by Aruna Roy and Jean Drèze among others. I believe that the proposal has merits and problems, and can be taken up cautiously with some institutional safe guards.

Asset creation

NREGA can used to create assets like small ponds or wells in private lands and this can assist in improving the productivity of these lands. If these are created in lands of people who need these facilities but cannot afford it, NREGA can serve an important social purpose. In fact, I would go further and say that NREGA will serve a useful purpose even if it is used in private lands of relatively well-to-do farmers. If this is done, it is implicitly like giving a subsidy for creating useful assets and this may not be a bad thing especially at a time when farming is not considered a lucrative option. This may also help in winning the support of farmers who are now upset with NREGA since it puts pressure on them to increase wages of labourers.

The promise of asset creation is matched by challenges of widespread corruption and shifting the focus of NREGA from traditionally marginalised social groups.

Accountability is difficult

Taking up public works in a private land raises a lot of thorny issues of accountability. First of all, block offices are typically stretched to the hilt and will not be able to actively supervise the construction of very small projects. This will create a lot of scope for misusing NREGA.

Secondly, there are standards of record keeping for public assets that does not hold in private lands. For example, it is quite easy to claim that a new well will be constructed using NREGA when a well exists already. There are many such avenues for making easy money in private property. Arguably such misuses do happen in public property as well, but there are at least some standards and documentation and there is at least a chance of making officials accountable. In case of private lands, easy corruption is all too possible.

Thirdly, in Andhra Pradesh (and perhaps elsewhere) payments to labourers were being made through the farmers when work took place in private lands. A few that I met mentioned that they were given a lump sum for the project and they paid labourers according to market wages that was lower than the NREGA wage. This goes against the very spirit of NREGA and extends the exploitation of labourers by paying the less than minimum wages.

Shifting focus from primary constituency

It is fairly common across India for public works to benefit mainly the dominant communities. By restricting the scope of asset creation in NREGA to marginalised communities there was some scope to ensure that they will get at least something out of this programme. In a powerful article Aruna Roy and Nikhil Dey argued that removing this restriction will make it socially impossible for these communities by shifting the control of the programme into the hands of dominant communities and the elite. So far NREGA has been clear in terms of its target communities and has had some impact in reaching the worst-off in the society.

So far, in my view, the dominant communities have left NREGA alone – and have at most considered this programme a thorn in their flesh. By getting them into the ambit of NREGA, it is quite possible that the social control of the programme will shift into their hands. The vision they will have for NREGA will be different from those of the marginalised sections, and in many ways contrary to them. If this happens, NREGA can be affected and the potential it holds for labourers will be seriously compromised. This problem can be particularly severe in states where landless labourers have limited influence in the society and politics.


There are the problems of accountability and shifting of social control on one hand, and the promise of using NREGA to create highly useful social assets on the other. I believe that some of these problems can be addressed by thinking creatively.

As far as accountability goes, I believe that it is practically impossible in our society to punish farmers if they misuse NREGA funds by either not creating an asset as per the project or if they underpay the labourers. In order to reduce such misuses, all payments must be done through official channels as would be done in any public NREGA work and farmers should be kept entirely out of the payment mechanism. This may help in addressing some forms of underpayment. Additionally, some legal provisions must be created for accountability of those who use NREGA in their private lands, including mandatory documentation procedures. This can be a double-edged sword especially in the lands of marginalised communities, but some measure would be useful to avoid gross misuse.

Thirdly, instead of having open-ended option of using NREGA in private lands that would create permanent scope for misuse, we can have short periods when works in private lands can be taken up in a campaign mode. For example, the month of May or June can be designated for this purpose. When it is done in a short window, it would be possible to create additional monitoring and other mechanisms to reduce corruption. It also reduces the scope for creating a culture of corruption where private parties can routinely work with officials in making easy money through NREGA. I feel that having such periodic campaigns will also help in preventing a sustained social control of NREGA by dominant communities.

These are preliminary thoughts on a complex question. Hopefully if changes are made to NREGA it will be done responsibly without compromising the little hope that NREGA has had for a large number of men and women in India.

About Vivek Srinivasan

I work with the Program on Liberation Technology at Stanford University. Before this, I worked with the Right to Food Campaign and other rights based campaigns in India. To learn more, click here.

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