Future tense as
MGNREGA turns 10
Under the MGNREGA, employment has to be provided for a minimum 100
days and unemployment allowance if work is not made available
As the Mahatma Gandhi
National Rural EmploymentGuarantee
Act (MGNREGA) celebrates its 10th anniversary, questions are being raised on
its existence because of an unprecedented fund squeeze, delays in wage
payments, rampant corruption and
a sharp drop in employment generated.
State after state in a meeting called to celebrate the 10th anniversary of the MGNREGA criticised the financial cuts, which for some like Bihar and Manipur have lead to a drop in work generated.
Under the MGNREGA, employment has to be provided for a minimum 100 days and unemployment allowance if work is not made available.
"Bihar's total dues to the Centre for the MGNREGA is around Rs 600 crore, which includes payment for work done for which wages have not been paid, but there has been no positive response from the Centre so far," Nitish Mishra, the state's rural development minister, told Business Standard.
He said Bihar had been released funds far less than required for the MGNREGA in 2014-15, which had led to a drop in employment generated.
Assam's Minister for Rural Development Raqibul Hussain felt the MGNREGA's stringent conditions made it difficult for North-Eastern states to receive the full benefits of the scheme.
"The number of person days per households has come down from 68 a few years ago to just 10 in 2014-15, which is a reflection of the funds crunch we are facing," said Manipur's Rural Development Minister Francis Ngajokpa.
Unofficial estimates show funds released for the MGNREGA till September 2014 were around Rs 10,000 crore less than in the same period of the previous year.
State after state in a meeting called to celebrate the 10th anniversary of the MGNREGA criticised the financial cuts, which for some like Bihar and Manipur have lead to a drop in work generated.
Under the MGNREGA, employment has to be provided for a minimum 100 days and unemployment allowance if work is not made available.
"Bihar's total dues to the Centre for the MGNREGA is around Rs 600 crore, which includes payment for work done for which wages have not been paid, but there has been no positive response from the Centre so far," Nitish Mishra, the state's rural development minister, told Business Standard.
He said Bihar had been released funds far less than required for the MGNREGA in 2014-15, which had led to a drop in employment generated.
Assam's Minister for Rural Development Raqibul Hussain felt the MGNREGA's stringent conditions made it difficult for North-Eastern states to receive the full benefits of the scheme.
"The number of person days per households has come down from 68 a few years ago to just 10 in 2014-15, which is a reflection of the funds crunch we are facing," said Manipur's Rural Development Minister Francis Ngajokpa.
Unofficial estimates show funds released for the MGNREGA till September 2014 were around Rs 10,000 crore less than in the same period of the previous year.
Against the Rs 5,296.19 crore sanctioned for
Andhra Pradesh, Rs 2,500 crore had been released till December. The state has
spent more than the released amount. Its outstanding dues on January 1, 2015,
were Rs 1,397 crore.The squeeze is being felt even in states ruled by the Bharatiya Janata Party. Chhattisgarh's Rural Development Minister Ajay Chandrakar pointed to the difficulty in implementing electronic transfer of wages, suggested as a measure to reduce delays. He said of the 146 blocks in the state 86 were in Naxal-dominated areas, where the banking network was poor and implementing electronic transfers difficult.
Union Rural Development Minister Chaudhury Birender Singh, however, said of the Rs 34,000 crore budgeted for the MGNREGA, around Rs 27,000 crore had been released and the rest would also be allocated after adjusting the unspent amount.
"Timely payment under the MGNREGA is essential as it is a demand-driven scheme, but you all should also understand that the rural development ministry is not the only one involved in this," Singh said. He added he would request the finance ministry for more funds for an improved version of the scheme where skill development was a big component.
"The rising liability under the MGNREGA and months of pending wages are virtually killing the Act. According to government records, 75 per cent of people are not being paid wages on time," social activist Nikhil Dey said at a press conference later in the day. He said if the government wanted to do away with the MGNREGA, it should do so openly.
"It is the typical Gujarat model of growth, where you slowly close down entitlement schemes in the name of development," said Jayati Ghosh, professor of economics at Jawaharlal Nehru University.
NDA planned to
amend, restrict rural job Act
Limits funds to states under the scheme and still looking to
reduce labour budget ratios
The National Democratic
Alliance (NDA) government had begun work on amending the Mahatma Gandhi
National Rural Employment Guarantee Act (MGNREGA), restricting the coverage to
a few backward districts, leaving out large portions of Punjab, Haryana,
Maharashtra, Gujarat, Tamil Nadu and Kerala from its ambit. The plan was
eventually shelved after protests and a debate in Parliament in December.
This is disclosed in internal notes of the ministry revealed through a Right to Information application. The notes also disclose disquiet in the ministry over the proposal to change the ratio in the Budget provided for manual labour and material from 60:40 to 51:49 at the district level. The ministry officials noted in August 2014 that the decision would adversely impact five crore households and result in the employment provided to the poor coming down by 136 crore persondays. The officials also noted that while the move was 'technically possible', it ran contrary to the spirit of the law, which was meant to create employment opportunities for unskilled workers.
The officials pointed out that hiking the material component could also have an impact on the budgetary resources, as then almost 50 per cent of the total 2014-15 Budget will go for material, leaving very little for wages, necessitating an additional fund infusion of around Rs 20,000 crore in 2014-15 if the work provided under the law were to be maintained at the same level.
This proposal is still alive in the ministry, sources said. The proposal to amend the law to restrict it to backward districts only, which has now been put to rest, was originally mooted by the rural development ministry to the Prime Minister's Office (PMO) in June 2014. The ministry note reads, "The Act needs to be amended through Parliament to enable its coverage only in backward districts/blocks." The PMO asked the ministry to examine the possibility and the then Rural Development Minister Nitin Gadkari too approved of such a move. But, in August, the PMO held another meeting, after many activists and economists protested. In the meeting, it was decided to bury the decision, said sources. Now, within the ambit of the existing law, a special focus has been put on the backward districts but other districts cannot be outright denied monies under the scheme.
But a fund crunch imposed by the Centre and much-delayed release of these, began to squeezeMGNREGA anyway by then, documents accessed through RTI show. The labour budget (the estimation done at the beginning of the year of work to be provided under the law) was approved for 227 crore persondays. This worked out to more than Rs 60,000 crore. But the budgetary allocation (then under UPA government) was limited to Rs 34,000 crore.
Out of this, in the first tranche at the beginning of the financial year, only Rs 7,309 was released to states - just enough to pay the pending wages from previous year. In July 2014, the rural development ministry created another rule that put a cap on the funds the Centre would give to the states each quarter. This turned the scheme from a demand-driven one to one controlled by central government's purse strings. Then, in the mid-year revision of the Budget brought the allocation to the scheme has now been brought down from Rs 34,000 crore to Rs 31,000 crore.
The delay in funds from Centre made several states, including those under BJP rule, write to the Centre in January, documents show. These included, Chhattisgarh, Telangana, Bihar, Jharkhand and West Bengal. They noted that restrictions on funds were preventing them from offering work to the poor under the scheme.
This is disclosed in internal notes of the ministry revealed through a Right to Information application. The notes also disclose disquiet in the ministry over the proposal to change the ratio in the Budget provided for manual labour and material from 60:40 to 51:49 at the district level. The ministry officials noted in August 2014 that the decision would adversely impact five crore households and result in the employment provided to the poor coming down by 136 crore persondays. The officials also noted that while the move was 'technically possible', it ran contrary to the spirit of the law, which was meant to create employment opportunities for unskilled workers.
The officials pointed out that hiking the material component could also have an impact on the budgetary resources, as then almost 50 per cent of the total 2014-15 Budget will go for material, leaving very little for wages, necessitating an additional fund infusion of around Rs 20,000 crore in 2014-15 if the work provided under the law were to be maintained at the same level.
This proposal is still alive in the ministry, sources said. The proposal to amend the law to restrict it to backward districts only, which has now been put to rest, was originally mooted by the rural development ministry to the Prime Minister's Office (PMO) in June 2014. The ministry note reads, "The Act needs to be amended through Parliament to enable its coverage only in backward districts/blocks." The PMO asked the ministry to examine the possibility and the then Rural Development Minister Nitin Gadkari too approved of such a move. But, in August, the PMO held another meeting, after many activists and economists protested. In the meeting, it was decided to bury the decision, said sources. Now, within the ambit of the existing law, a special focus has been put on the backward districts but other districts cannot be outright denied monies under the scheme.
But a fund crunch imposed by the Centre and much-delayed release of these, began to squeezeMGNREGA anyway by then, documents accessed through RTI show. The labour budget (the estimation done at the beginning of the year of work to be provided under the law) was approved for 227 crore persondays. This worked out to more than Rs 60,000 crore. But the budgetary allocation (then under UPA government) was limited to Rs 34,000 crore.
Out of this, in the first tranche at the beginning of the financial year, only Rs 7,309 was released to states - just enough to pay the pending wages from previous year. In July 2014, the rural development ministry created another rule that put a cap on the funds the Centre would give to the states each quarter. This turned the scheme from a demand-driven one to one controlled by central government's purse strings. Then, in the mid-year revision of the Budget brought the allocation to the scheme has now been brought down from Rs 34,000 crore to Rs 31,000 crore.
The delay in funds from Centre made several states, including those under BJP rule, write to the Centre in January, documents show. These included, Chhattisgarh, Telangana, Bihar, Jharkhand and West Bengal. They noted that restrictions on funds were preventing them from offering work to the poor under the scheme.
-- Business standard 03 feeb 2015
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