MGNREGS – GOVERNMENT SCHEME
News: Government forms panel to look into MGNREGA’s efficacy
What's in the news?
● The Central government has constituted a committee to review the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, especially to assess the programme’s efficacy as a poverty alleviation tool.
● The committee, headed by former Rural Development secretary Amarjeet Sinha, had its first meeting on November 21, 2022, and has been given three months to submit its suggestions.
Key takeaways:
Demand driven:
● The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005, and the demand-driven scheme guarantees 100 days of unskilled work per year for every rural household that wants it.
● There are currently 15.51 crore active workers enrolled under the scheme.
Sinha committee:
● The Sinha committee has now been tasked to study the various factors behind demand for MGNREGA work, expenditure trends and inter-State variations, and the composition of work.
● It will suggest what changes in focus and governance structures are required to make MGNREGA more effective.
Poverty alleviation:
● MGNREGA was launched as a poverty alleviation instrument for the rural region, providing them with a safety net in the form of guaranteed work and wages.
Criticisms:
Ineffective:
● In 2015, Prime Minister Narendra Modi had famously called MGNREGA as a “living monument of Congress government’s failure”.
● In a speech in parliament, he had said, “After so many years in power, all you were able to deliver is for a poor man to dig ditches a few days a month.”
● The scheme has also been criticised by economists like Jagdish Bhagwati and Arvind Panagariya as an “inefficient instrument of shifting income to the poor”.
Higher costs:
● The present committee will also look at the argument that the cost of providing work has also shot up since the scheme first started.
Asset creation:
● MGNREGA critics also slam the scheme for the lack of tangible asset creation.
● The committee will study if the composition of work taken up presently under the scheme should be changed.
● It will review whether it should focus more on community-based assets or individual works.
Increasing demand:
● Regardless of all the criticism, MGNREGA acted as a crucial safety net during the COVID pandemic.
● In the financial year 2020-21, the number of person days of work provided under the scheme rose drastically to 389 crores, in comparison to the previous year’s figure of just 265 crore.
● In 2021-22 too, the demand for MGNREGA work remained high, and 363 crore person days of work were generated. As per the current statistics, 196 crore person days of work have already been generated this year.
MGNREGS:
Backdrop:
● Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 provides legal guarantee for 100 days of employment during every financial year to adult members of any rural households who are willing to do public work-related unskilled manual work at the statutory minimum wage.
● This Act also provides 150 days of work to the SC/STs during non-agricultural seasons.
● Its entire implementation is monitored by the Ministry of Rural Development in association with the State Governments.
● The employment under this scheme will be provided within a radius of 5 km. If it is above 5 km, extra wages will be paid by the government.
● Within 15 days of applying or from the day the work is demanded, wage employment will be provided to the applicant.
● The applicants should receive wages within fifteen days after the work is done.
● In case the employment is not provided within 15 days of submitting the application or from the date when the work is sought, the individual has the right to get unemployment allowance.
● Gram Sabha is the principal forum for the wage seekers to raise their voices and make demands.
● Also, the Gram Sabha and the Gram Panchayat approve the works under MGNREGA and fix their priority.
● Women empowerment: Minimum one-third of the workers should be women.
● Demand-driven scheme: Worker will get the work whenever he demands and not when the Government has work available.
Objectives of the scheme:
This scheme focuses on the following aspects:
● Economic and social empowerment of women.
● Providing “Green” and “decent” work for the beneficiaries.
● Addressing climate change vulnerability and protecting farmers from such risks.
● Conservation of natural resources.
Significance of MGNREGS:
1. Fixed employment:
● MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing bargaining power to the laborers.
2. Assured compensation:
● The failure of provision for employment within 15 days of the receipt of a job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
3. Locality is ensured:
● Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
4. Legal backing:
● Employment under MGNREGA is a legal entitlement.
5. Increases Rural demand:
● It boosts rural demand and ensure economic development of the rural population.
● It seeks to bridge the gap between the rich and the poor.
● It helps in improving the purchasing power of the rural population by providing them primarily the semi-skilled or unskilled work, especially to those living below the poverty line.
6. Addresses Rural issues:
● It helps in solving rural poverty, farmer suicides, unemployment crisis in rural areas.
7. Rural transformation:
● Infrastructure development in rural India, improving agricultural productivity through labor-intensive, supportive projects related to water conservation, drought relief measures, flood control etc.
8. Empowers Gram Panchayats:
● It provides for grass-root level development as it is implemented mainly by the Gram Panchayats (GPs).
● It does not allow the involvement of contractors so that the workers under this scheme are not exploited.
9. Transparency:
● Transparency and accountability are ensured by the mandatory social audit of MGNREGA.
10. Shock absorber:
● MGNREGA not only prevented rural to urban migration but also provided employment opportunities to migrant labourers who returned to their villages due to the pandemic lockdown.
● There is an increase in demand for jobs under this scheme as well as a rise in spending by the government.
● The maximum demand for MGNREGA work came from UP, Rajasthan, MP, Bihar, Jharkhand and Odisha, which have a large number of migrant returnees.
11. Social upliftment:
● It has resulted in social upliftment for all sections including SC/ST.
● The percentage of Scheduled Caste workers benefited under the scheme has consistently been about 20% and of Scheduled Tribe workers has been about 17%.
12. Women Empowerment:
● This is a natural result of employing women to 1/3rd of all MGNREGA jobs.
● Eg: MGNREGA has led to the formation of the country’s largest group of trained women well-diggers in Pookkottukavu village of Kerala’s Palakkad district.
13. Community Assets:
● The scheme has led to the creation of common community assets. These assets are built by communities on common lands thereby creating a sense of responsibility towards the structure which results in better care.
● For instance, many Johads (percolation ponds) had remained abandoned for several years in many villages of Haryana. However, villagers revived them under the MGNREGA.
14. Financial inclusion:
● The programme has led to empowerment of the rural poor and led to financial inclusion due to rise in rural wages and prevention of urban migration.
● Payment through bank accounts has led to financial inclusion of many.
Issues in MGNREGS:
1. Non-Purposive spending and corruption:
● Many works sanctioned under MGNREGA often seem to be non-purposive.
● Quite often, they are politically motivated hotspots to create rampant corruption by dominant sections of the local population.
● Even social audits of such projects are locally manipulated.
2. Insufficient Budget Allocation:
● Over the past years, budget allocation has been lesser than the revised estimate.
● The Centre had to allocate supplementary budgets for three straight years after original allocations were exhausted in the first few months of the respective financial years.
● The supplementary allocations, however, are delayed and have slowed down work across the nation.
● The work demands on MIS are far less than the actual needs and demands.
3. Workers penalized for administrative lapses:
● The ministry withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period (for instance, submission of the previous financial year’s audited fund statements, utilization certificates, bank reconciliation certificates etc).
● There is no logical or legal explanation for this bizarre arrangement. It is beyond any logic as to why workers would be penalized for administrative lapses.
4. Genuine job cards being deleted:
● Genuine job cards are being randomly deleted as there is a huge administrative pressure to meet 100 percent DBT implementation targets in MGNREGA.
● In states like Jharkhand, there are multiple examples where the districts had later requested to resume job cards after civil society interventions into the matter.
5. Too much centralization weakening local governance:
● A real-time MIS-based implementation and a centralized payment system has further left the representatives of the Panchayati Raj Institutions with literally no role in implementation.
● It has become a burden as they hardly have any power to resolve issues or make payments.
6. Local priorities being ignored:
● MGNREGA could be a tool to establish decentralized governance. But, with the administration almost dictating its implementation, it is literally a burden now for the people and especially for the local elected representatives.
● The Gram Sabhas and gram panchayat's plans are never honoured. This is a blatant violation of the Act as well.
7. Inadequate wages:
● The efforts to provide dignified wages have been insufficient and the scheme hasn’t been receiving adequate resource allocation.
● Agricultural minimum wages exceed MGNREGA wage in almost all states.
● Workers across the nation have been demanding higher wages in accordance with the Seventh Pay Commission but to no avail.
● Different committees constituted by the Centre vouched for higher MGNREGA wages, but they have been ignored.
● The recent central committee for fixating of the national minimum wage had recommended that the national minimum wage should be fixed by Rs 375 per day.
● However, the Centre had stated that the national minimum wage will not apply to MGNREGA and will be governed by its own law.
● There are also instances of unlawful denial of payment of minimum wages to the workers.
8. Average number of days of employment:
● The average number of days of employment per household was 31.68 in 2021-22(till August 2021), 51.52 in 2020-21, 48.4 in 2019-20 and 50.88 in 2018-19.
● Among the BIMARU states, the average was below the national average in Uttar Pradesh, Uttarakhand, Bihar and Jharkhand.
9. Poor maintenance:
● Many structures created under MGNREGA become defunct due to poor maintenance. This simply implies the wastage of time, energy, and resources.
Negative implications of lack of funds:
1. Delayed payment: Due to this, payments for MGNREGA workers as well as material costs will be delayed, unless States dip into their own funds.
2. Livelihood loss: MGNREGA data shows that 13% of households who demanded work under the scheme were not provided work.
3. Halt of work: Many workers are simply turned away by officials when they demand work, without their demand being registered at all.
4. Fall in demands: This has led to stop the generation of work. There is an artificial squeezing of demand.
What needs to be done?
1. Utilization of funds:
● A large amount of funds allocated for MGNREGA have remained un-utilised.
● For example, in 2010-11, 27.31% of the funds remained unutilised.
● The Committee recommends that the Department of Rural Development should analyse reasons for poor utilisation of funds and take steps to improve the same.
● In addition, it should initiate action against officers found guilty of misappropriating funds under MGNREGA.
2. Context specific projects and convergence:
● Since states are at various stages of socio-economic development, they have varied requirements for development.
● Therefore, state governments should be allowed to undertake works that are pertinent to their context.
● There should be more emphasis on skilled and semi-skilled work under MGNREGA.
● In addition, the Committee recommends a greater emphasis on convergence with other schemes such as the National Rural Livelihoods Mission, National Rural Health Mission, etc.
3. Regulation of job cards:
● Offences such as not recording employment related information in job cards and unlawful possession of job cards with elected PRI representatives and MGNREGA functionaries should be made punishable under the Act.
4. Participation of people with disabilities:
● Special works (projects) must be identified for people with disabilities and special job cards must be issued and personnel must be employed to ensure their participation.
5. Payment of unemployment allowance:
● Dated receipts for demanded work should be issued so that workers can claim unemployment allowance.
● Funds for unemployment allowance should be met by the central government.
6. Including farm related works:
● In the last few years, un-remunerative prices of several crops have been the root cause of widespread agrarian distress.
● The suggestion is to allow farmers to employ MGNREGA workers in agricultural operations like land preparation, sowing, transplantation of paddy, plucking of cotton, intercultural operations and harvesting of crops etc. so as to reduce the cost of cultivation.
● The idea is to pay part of the wages of labor in agricultural operations from MGNREGA.
7. Empower Gram Sabha:
● The government should also respect the idea of the decentralized planning processes through Gram Sabhas across the country and allow adequate fund allotment as per labour budgets provided by each Gram Panchayats.
8. Geo MGNREGA:
● It is a path breaking initiative that uses space technology for geo-tagging all assets created under MGNREGA for improved planning, effective monitoring, enhanced visibility and greater transparency.
9. Increase the number of working days:
● The government can enhance the number of days to 150-200 days depending on the vulnerability in a particular state.
● The states can increase it as done by Odisha and Himachal Pradesh which have added 50 days and made it 150 days in a year.