MGNREGS - POLITY
News: Decentralize MGNREGS for better implementation, says study
What's in the news?
● An internal study commissioned by the Ministry of Rural Development has argued for decentralization of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), allowing for more “flexibility” at the ground level.
Key takeaways from the study:
Empower Gram Sabha:
● In the past few years, the fund management has been centralised instead of paying the Gram Sabha’s an advance enabling them to decide the work they want to undertake. This causes issues at the ground level.
● The Gram Sabha’s can take into account the local conditions and the community’s requirement instead of chasing a target set for them.
Diversify the work:
● There should be a greater diversification of permissible works instead of listing the types of permissible works, broad categories of works may be listed out and flexibility should be given at ground level to select the type of works as per broad categories.
Funding:
● The internal study also flagged the frequent delay in fund disbursal, and to deal with it suggested “revolving fund that can be utilized whenever there is a delay in the Central funds”.
Lower wages:
● At present, the minimum wage of a farm labourer in Gujarat is ₹324.20, but the MGNREGS wage is ₹229. The private contractors pay far more.
● In Nagaland, the wage is ₹212 per day, which does not take into account the difficult terrain conditions. Similarly, in Jammu and Kashmir, the rate is ₹214 per day.
● This, the study noted, “is lower than what is offered by private contractors which can go up to ₹600 - ₹700 per day.
MGNREGS:
● Low levels of education and limited skill-set of the country's rural labour force have always impacted the labour productivity and the resultant income growth.
● In this situation, MGNREGA accords an opportunity to broaden the occupational choices and wage income for the willing less-educated, unskilled-job seekers by tapping their productivity through execution of quality community asset creating projects.
● The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) guarantees 100 days of work a year to every rural household with an aim to enhance the livelihood security of people.
● It is the only employment guarantee program run by the government.
● Considered as one of the biggest social welfare programs in the world, the program has lifted lakhs of people out of poverty, being implemented by the Ministry of Rural Development.
Objectives:
● To enhance the livelihood security of people in rural areas by guaranteeing 100 days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work.
● Proactively ensuring social inclusion.
● Strengthening Panchayati Raj Institutions.
Salient features:
● It is a social security measure that aims to guarantee the ‘Right To Work‘
● All willing rural citizens are eligible.
● Focuses on durable assets as per local needs.
● Act provides for social audit of performance at least once in every six months, which lends to accountability and transparency.
● Wages are linked to the Consumer Price Index (Agriculture Labour).
● Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
● If work is not provided within 15 days of applying, applicants are entitled to an unemployment allowance.
● MGNREGA is to be implemented mainly by gram panchayats.
● The works have been divided into ten broad categories like agricultural and livestock related works, flood management works, fisheries and works in coastal areas, watershed, irrigation and rural drinking water and sanitation related works.
● Nature of work provided can be semi or unskilled work.
● The central government bears the full cost of unskilled labour and 75% of the cost of material (the rest is borne by the states).
● MGNREGA provides “Green” and “Decent” work.
● MGNREGA works address the climate change vulnerability and protect the farmers from such risks and conserve natural resources.
Constitutionality of MGNREGA:
● MGNREGA provides a 'Right To Work' in accordance with Article 41 that directs the State to secure for all citizens the right to work.
● It also protects the environment through sustainable rural works, which is consistent with Article 48 A which directs the State to protect the environment.
● Article 21 guarantees the right to life with dignity to every citizen of India, this act promotes dignity among the rural people through an assurance of livelihood security.
● Article 16 guarantees equality of opportunity in matters of public employment and prevents the State from discriminating against anyone in matters of employment on the grounds only of religion, race, caste, sex, descent, place of birth, place of residence or any of them.
● MGNREGA also follows Article 46 which requires the State to promote the economic interests and work for the upliftment of the scheduled castes and scheduled tribes and protect them from discrimination and exploitation.
● Article 40 mandates the State to organize village panchayats and award them with such powers and authority as may be necessary to enable them to function as units of self-government.
MGNREGA Funds:
● There are 3 components of the MGNREGA funds wage, material, and administrative.
● Out of these three, the entire (100%) responsibility of the wage component of MGNREGA, is on the Central Government.
● The Central government is mandated to meet the cost of the wage bill by directly transferring it to the worker's bank accounts.
● The Central government is also required to pay the administrative cost and 3/4th of the material cost.
● The cost of unemployment has to meet the State government, along with 1/4th of the material cost.
● The wage seekers can raise their voices and make demands from the Gram Sabha, which is the principal forum for the same.
Works under MGNREGS:
MGNREGA permits several categories of public works relating to
● Natural Resource Management (NRM) Works
● Works on individual assets for vulnerable sections
● Setting up of common infrastructure for National Rural Livelihood Mission compliant Self-Help Groups
● Building rural infrastructure.
● At least 60 percent of public works in terms of cost at the district level under MGNREGA should be devoted to creation of quality productive assets directly linked to Agriculture and Allied Activities.
How does it address rural distress?
1. Right to Employment:
● MGNREGA is the biggest single public works program in the world.
● According to the World Bank, it provides employment to around one in every six Indian families.
● It enhances the role of the state as provider of livelihood which has led to economic emancipation of rural people from distress.
2. Financial inclusion:
● The program 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.
3. Women empowerment:
● Out of the total jobs created so far, the percentage of hours put in by women has increased steadily, much above the statutory minimum of 33% to 57%.
● Priority for women in the ratio of 1/3rd of total workers employed.
● Equal wages for men and women.
● Crèches for the children of women workers.
● Leads to economic empowerment of women and thus leads to overall welfare of women.
4. Empowerment of marginal section:
● According to the Rural Development Ministry, out of all the workers benefited under the scheme, the percentage of Scheduled Caste workers has consistently been about 20% and of Scheduled Tribe workers has been about 17%.
● This provides them financial empowerment, thereby leading to social empowerment.
5. Rural transformation:
● The works done by laborers of MGNREGA provides necessary infrastructure to the rural areas.
● Thus, MGNREGS offers socio-economic transformation in the lives of rural people.
6. Shock absorber:
● MGNREGA has the capability to empower poor rural households to withstand economic shocks.
● MGNREGA can effectively give a stimulus to the rural economic activities via wage income disbursals resulting in rising purchasing power of rural population.
● MGNREGA is capable of meeting challenges of economic shocks and rural income and employment during post-COVID period and can be a productive and active catalyst in building a self-reliant rural India.
● Increment in individual income in turn will transform into higher expenditure on food and essential items, thereby lubricating and stimulating a depressed economy in the post-pandemic era.
7. Enhances productivity of rural labourers:
● MGNREGA, being a public works program, has the capability to effectively harness the productive power of rural unemployed towards their socio-economic development.
8. Enhances agricultural infrastructure:
MGNREGS works in building out
● Water security like construction of farm ponds, wells, earthen check dam, stop dam and other water harvesting structures with a special focus on recharging groundwater including the sources of drinking water.
● Watershed management works like contour trenches, terracing, contour bonds, boulder checks, spring shed development.
● Micro and minor irrigation works.
● Renovation of traditional water bodies including de-silting of irrigation tanks and other water bodies.
● Afforestation, tree plantation and horticulture in common and forest lands.
● Land development works in common land.
9. Demand-driven:
● The MGNREGA program is demand-driven, and the distribution of resources from the Center to the States is dependent on the need for jobs in each State.
10. Equity:
● The program offers everyone, regardless of caste or gender, an equal opportunity to find employment.
11. Multiplier effect:
● The average daily wage rate of farm workers has grown sharply after MGNREGA.
● Enhances rural consumption.
Issues with MGNREGS:
1. Delay in wages:
● The Union Ministry of Rural Development withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period.
2. Low wage rate:
● Currently, MGNREGA wage rates of many states are less than the corresponding state minimum wages.
● The low wage rates have resulted in lack of interest among workers in working for MGNREGA schemes, making way for contractors and middle men to take control locally.
3. Funding:
● Almost every year, more than 80% of funds get exhausted within the first 6 months.
● This year’s budget allocation for the scheme was only ₹60,000 crore, lower than the amount spent in the previous year.
● Thus, fund allocation is insufficient to ensure proper implementation on the ground.
4. Capital formation:
● Successive governments have spent an estimated 3.1 trillion on MGNREGA schemes over the past decade.
● The impact of such spending would have been far higher if the money had been used for rural infrastructure that would have raised productivity as well as helped the structural transformation of the rural economy.
5. Inflation:
● MGNREGA pushed up rural wages without having much of an impact on rural productivity.
● It led to inflation as nominal wages rose faster than productivity. This has hit the poor the hardest.
6. Important Role of PRI:
● The gram panchayats failed to implement this act in an effective and efficient manner.
7. Huge Number of Incomplete works:
● Huge number of works are incomplete under MGNREGA and inspection is irregular.
8. Defective MIS data:
● Increased corruption and weakened transparency are rooted in the excessive reliance (real-time MIS being one of them) on technology for the implementation of MGNREGA.
9. Non-payment of unemployment allowance:
● A significant number of unemployment allowances are actually shown in the MIS.
● But the central government's inaction to ensure payments of the same has shown that the government continues to use the MIS for its convenience and does not value its own database.
10. Too much centralization weakens local governance:
● The real-time implementation of the MIS and the centralised payment system have left the members of the Panchayati Raj Institutions practically without any role in the implementation, monitoring and redress of MGNREGA grievances.
11. Fake beneficiaries:
● Genuine labourers not getting their dues while money keeps changing hands due to collusion of unscrupulous elements surrounding the implementation of scheme at ground level is a bitter truth of the time.
Way forward:
1. Adequate funds:
● The Government needs to allocate funds to ensure adequate opportunities for these households.
● Allocation for a year should include pending liabilities of previous years.
● The Centre also needs to ensure uninterrupted operations by primarily ensuring the allocation of adequate funds for the program.
2. Timely payment:
● The Government should ensure timely payment with reduced delays.
● Also, the MGNREGA payment procedures should be simplified to ensure transparency and accountability.
3. Increasing wage rates:
● Wages must be increased to ensure benefits for the poor. More income means more economic empowerment of rural poor.
● This will enable social welfare in the form of increased spending on health and education.
4. Strengthening the Scheme:
● There is a need for better coordination between various government departments and the mechanism to allot and measure the work.
It is important to substantially increase the budget for programmes such as MGNREGA. This would lead to higher disposable income for the poor and have positive multiplier effects in the economy. Timely payment of wages and an increase in wage would help many rural people to come out of distress.