Interference, lack of transparency

On October 27, Millennium Post reported that the Bengal government will oppose the Centre’s move to transfer money directly into the bank accounts of MGNREGA (government-sponsored jobs programme for the rural poor) beneficiaries. It considers such a move to be an attack on the state’s autonomy and the federal structure of the country.  Under normal circumstances, the Centre sends money to the state Finance Department, which disburses it among the beneficiaries through the Panchayat Department, according to Bengal Finance Minister Amit Mitra. “The move of the Centre attacks the state's autonomy. Moreover, the state government prepares a budget and tables it in the Assembly. We are accountable to the legislature. But this move is against the federal structure. So, we are writing to the Centre in unambiguous terms to clear our stand,” Mitra said. It is a problem that concerns other states too. It isn’t the first time that the Bengal government has raised its objection to excessive Central interference. “India’s federal structure is being bulldozed by the unilateral, arbitrary action of the Centre,” said Chief Minister Mamata Banerjee earlier this year, before going on to propose a radical rearrangement of the Union-State relationship. “I believe apart from Finance, Rail, Defence and External Affairs, the Centre should not have any other subject in its jurisdiction.” The Chief Minister presented this radical proposal after the NDA government was found trying to control how states spend their monies. Banerjee was referring to an online tool advocated by the Union government that will allow it to track how states are spending their money right till the Gram Panchayat level. The NDA government has done little to protect the idea of "cooperative federalism", despite espousing it on some occasions.

 The Bengal Chief Minister also tore into Centre over the recent rationalisation of Centrally Sponsored Schemes (CSSs), arguing that such unilateral initiatives undermine the primary authority of state governments in a country that has the principle of federalism enshrined in its Constitution. In August, the Union Cabinet accepted and implemented key recommendations of a committee formed under the leadership of the Madhya Pradesh Chief Minister that included limiting the total number of centrally-sponsored schemes to 30 and establishing clear guidelines on state and central funding ratios. Is it any surprise that BJP Chief Ministers dominated the committee formed to look into the rationalisation of CSSs? A few months prior, the Bengal government had written a letter to the Centre, asking it to consult all states before taking action on the recommendations made by the committee. Apparently, the NDA government did not bother to consult non-BJP states. Without taking them into confidence, the Centre unilaterally decide to micro-monitor how state governments allocate the money disbursed to them. One has little need for a state government if the Centre decides to monitor its expenditure patterns. Every state government has a finance department, led by an elected government, to disburse funds coming in from the Centre. If these funds are misappropriated, or if the Centre seeks to enhance transparency, it can refer to the Comptroller Auditor General of India. Under no circumstances should the Centre unilaterally impose its will on how elected governments disburse their funds. 

 Despite the NDA government’s claims that it has brought about a "transformation" in the rural job guarantee scheme, a recent report has indicated that it has bypassed official channels not to generate more work days. In a report published by Business Standard, the Union Rural Development Ministry in August created an off-record WhatsApp chat group where it instructed states not to generate more work under the Mahatma Gandhi National Rural Employment Guarantee scheme, despite drought conditions prevailing in many parts of the country. It is a clear violation of the MGNREG Act, according to which the government cannot decrease work opportunities to work around its budgetary plans. Titled ENCORE (Enabling Communication on Rural Employment), the chat group includes senior ministry officials and state-level bureaucrats responsible for the implementation of the scheme. The Centre contends that the Whatsapp group does not represent “formal government communication”. However, the report carefully draws out how the Centre created an off-record avenue to seemingly pass instructions that would otherwise be deemed unlawful had it taken an official/formal route. Where is the transparency? Following such instructions, the amount of work generated in August and September was abysmally low, even as states pleaded for funds to pay hundreds of crores of arrears for the work that had been completed. Based on the data available, the Business Standard report goes on to state: “The WhatsApp messages from the central rural development ministry to states had a chilling effect on the work given under MGNREGA after the roaring demand growth in the first few months. The states took the instructions and signals sent in August seriously and reduced work for future as arrears piled up.” Back in April, the Supreme Court had pulled up the Centre for not releasing enough funds to the Mahatma Gandhi National Rural Employment Guarantee Act to drought-hit states.

 Even though Prime Minister Narendra Modi famously said in 2014 that his government will keep the scheme alive as a reminder of the UPA’s incompetence, it could not escape the benefits. Last year, after drought-like conditions had prevailed over vast swathes of the country, the NDA government realised that it needed to keep the scheme alive to alleviate rural economic distress. Despite its apparent benefits, the ruling government has always been under the impression that bleeds a lot of money. Its bid to limit spending through informal channels seems to be a reflection of that belief at the cost of transparency and the rural poor.