At a government-sponsored event to mark the 10th anniversary of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) two months ago, Union Finance Minister Arun Jaitley said that the NDA government brought about a "transformation" in the rural job guarantee scheme. The minister was unequivocal in contesting the perception that the NDA government was neglecting the job scheme, which was legislated by the previous Congress-led United Progressive Alliance government. However, on Wednesday, the Supreme Court pulled up the government for not releasing enough MGNREGA funds to drought-hit states. "Nine states have declared a drought. There is a huge pendency of money. Who will pay, since the States won't?" the court said. "We are concerned about this emergency and how to help them. Are we doing enough?" The court was unequivocal in its demand that relief to farmers, labourers and rural people who are dependent on schemes like MGNREGA, "has to come immediately, not after one year". "You cannot turn a blind eye to drought. What is the use if the relief comes a year later? Two months later, that person many not be there." In response, the government said that it would release Rs 7,983 crore in the next three days, which would settle the outstanding dues for the last fiscal. The government stood accused of not following its own master circular, according to which disbursement of funds for the current fiscal was to be done by April.
In another scathing observation, the court also said that the Centre was unable to fulfill its basic duty of providing even 100 days of employment per household per annum. To this, the government admitted that for the current fiscal too, they could only assure 50 days of employment to the statutory 100 days that are guaranteed. However, Swaraj Abhiyan, a non-governmental organization, which has filed a petition in court over the non-payment of dues, argued that the government could not even deliver on its promise and employment of even 50 days per household per annum. According to recent figures, less than 5 percent of rural households have completed 100 days of work in 2015-16. A fundamental reason behind this downward spiral could be delays in wage payments. “Nearly half of all NREGA transactions worth Rs 7,200 crore until November (2015) were delayed,” according to a recent Hindustan Times report. “Of this, 62% payments saw delays of up to a month, 29% payments were held up for up to two months, and around 3% wages took over three months to reach workers.” In its recent bid to offset the distress caused by the recent rural crisis, the Centre had declared 50 additional days of employment in drought-affected districts. Unfortunately, data available in the public domain clearly states that in the nine worst drought-affected states, less than 10 percent of households could complete the mandated 100 days of work, with the sole exception of Maharashtra. Suffice to say, the shortfall in funds for MNREGA has affected poorer states. For example, the BJP-ruled Jharkhand government recently wrote to the Centre, asking for at least half the Rs. 1,800 crore promised last year. There's no money for MNREGA and Jharkhand is borrowing to pay wages, the state government had said in its letter to the Centre a few weeks ago.
What are the benefits of MGNREGA? A majority of the works under the job scheme is to do with rural sanitation. Further delving into data available in the public domain, it is clear that the scheme has been used to create assets which have improved rural connectivity, water conservation, and drought proofing. Given the empirical evidence on record, MNREGA is not a “living monument” to the failures of the previous UPA government. Moreover, evidence from independent research studies have shown that it has successfully limited distress migration, increased nutritional standards of households, provided risk resilience to small and marginal farmers and vastly expanded the financial inclusion net in the country. But shrinking employment generation under MNREGA has worsened the current rural distress as emergency relief measures for drought-affected farmers take months to arrive. Besides state apathy, the rising discontent in rural India has been primarily triggered by two consecutive years of drought. It is fair to argue that India’s villages, home to 2/3rds of the nation’s population, are not receiving the fruits of its fantastic 7.3 percent GDP growth. Rural wages have plummeted and India’s villages are battling high levels of unemployment. Instead of merely pouring more money into the scheme, the Centre, and its partners in the States must find a way to improve basic accountability in the delivery of MGNREGA funds. Structural reforms in the agriculture sector will take some time to arrive before India’s farmers feel the benefits. Until then, the government must fix these loopholes and give its rural brethren a chance at gainful employment. But instead, it seems as if the Centre is slowly killing the job scheme, which plays a vital role in providing economic relief to people during a drought.