Cannot ignore MNREGA

In 2004, the then Atal Bihari Vajpayee government came out with its India Shining campaign. The campaign caught the eye of the market watchers. Swept up in the enthusiasm of a hopeful campaign it was preordained that the Vajpayee government would ride a strong wave and defeat anti-incumbency. In reality, the opposite happened. The Congress, which contested the elections in a low-key manner and focused much of its energies on seeking the votes of farmers and rural labour rode to victory. This was an electoral lesson the Bharatiya Janata Party has not forgotten easily. 

And it shows in their new social spending enthusiasm. Not only the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and Integrated Child Development Services (ICDS), but the government also sought additional sum for the National Food Security Act to the tune of Rs 4,495 crore. This would take the total provision for the scheme to almost Rs 70,000 crore in 2015-16, which is 11.28 percent more than the RE for 2014-15. The Budgetary Estimate was just Rs 64,919 crore for 2015-16.

The World Bank recently said that the spike in ‘unmet demand’ for MGNREGA jobs is an indicator of increasing rural distress. Since the scheme is the only and the best bet India has for mitigating the impact on the poor of the recent unseasonal rains, its advocates have asked the government to take steps aimed at arresting delays in wage payments and the rising unmet demand for jobs. The analysis of MGNREGA in a study shows that the programme’s impact on rural poverty in Bihar is only 1 percentage point as against its potential of reducing poverty by at least 14 percentage points. 

Among the main reasons why the potential is not being realised, the study says, is that the supply side is too slow to respond to the demand for work from the poor, workers not receiving the full scheme wage and delays in wage payments. The study also says that if MGNREGA were to be implemented effectively, its design would ensure that there is no unmet demand for work. 

The National Rural Employment Guarantee Act 2005, also known as the “Mahatma Gandhi National Rural Employment Guarantee Act” is an Indian labour law and social security measure. The scheme seeks to follow the Directive Principles of State Policy enunciated in Part IV of the Constitution of India and conforms to the Article 23 of the Universal Declaration of Human Rights that defines the right to work as a basic human right. How? By providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. 

The provisions of the law also adhere to the principles enunciated in the Constitution of India under Article 21 of the Constitution of India that guarantees the right to life with dignity to every citizen of India. The major responsibility of the implementation of MNREGA rests with Panchayati Raj institutions. Previous employment guarantee schemes (EGS) like ‘Sampoorna Grameen Rozgar Yojana’ (SGRY) Programme and National Food for Work Programme (NFFWP) were merged with MGNREGA to make it more effective. The Act sets a minimum limit to the wages, to be paid with gender equality. The states are required to evolve a set of norms for the measurement of works and schedule of rates. The release of funds to the States is being delayed and the amounts have been capped. As a result, there has been a 16 percent decline in employment from the 2013-14 figures. 

Compared with 147 lakh person days generated in December 2013, only 123 lakh person days were generated in December 2014, with the decline sharper in poor States such as Bihar and Chhattisgarh. Till December 2014 in the financial year 2014-15, 72 percent of the total wages disbursed were delayed. And delays in wage payments have actually increased over time. However, evidence from independent research studies have shown that the MGNREGA has successfully curbed distress migration, had large effects on consumption and poverty of Dalit and Adivasi households, increased nutritional standards of households, provided risk resilience to small and marginal farmers and vastly expanded the financial inclusion net in the country. In this light, the government seeking parliamentary approval for an extra Rs 18,995 crore social sectors during 2015-16, almost half of the total extra spending asked for over the Budget Estimates (BE) is a positively welcome move.