Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

February 18, 2023

Context:

Union Rural Development Minister has said that the MGNREGA Act should be amended to change the contribution of funds from 100% by the government to a 60:40 split between the Centre and the States.

About Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):

MGNREGA is one of the largest work guarantee programmes in the world launched in 2005 by the Ministry of Rural Development.
The primary objective of the scheme is to guarantee 100 days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work.
Legal Right to Work:

1. Unlike earlier employment guarantee schemes, the act aims at addressing the causes of chronic poverty through a rights-based framework.
2. At least one-third of beneficiaries have to be women.
3. Wages must be paid according to the statutory minimum wages specified for agricultural labourers in the state under the Minimum Wages Act, 1948.

Demand-Driven Scheme: The most important part of MGNREGA’s design is its legally-backed guarantee for any rural adult to get work within 15 days of demanding it, failing which an ‘unemployment allowance’ must be given.

Decentralised planning:

1. There is an emphasis on strengthening the process of decentralisation by giving a significant role to Panchayati Raj Institutions (PRIs) in planning and implementing these works.
2. The act mandates Gram Sabhas to recommend the works that are to be undertaken and at least 50% of the works must be executed by them.

Utility of MGNREGA

It has given some amount of bargaining power to the people or rural labourers and is working as a market mechanism.
It has helped in reducing penury through providing off season employment and thereby improving household consumption among the invariably poor citizens who avail the scheme.
It has been acting as insurance during monsoon deficient seasons, besides allowing for greater food security through increased productivity helped by the works generated.
Thousands of migrant workers who left urban areas due to the lockdowns took up work under the MGNREGA in rural areas where demand for the menial but arduous work peaked.

Challenges in implementing the Scheme:

Government reduced allocation by 30% for the scheme in the Union Budget, from 2.14% of overall outlay in FY23 to 1.33% in FY24.
There is much evidence that Aadhaar based payments have neither reduced corruption nor reduced wage payment delays while creating hurdles for officials and workers during implementation.
Delay and Insufficiency in Funds Dispersal:

1. Most states have failed to disburse wages within 15 days as mandated by MGNREGA. In addition, workers are not compensated for a delay in payment of wages.
2. This has turned the scheme into a supply-based programme and subsequently, workers had begun to lose interest in working under it.

Ineffective Role of PRI: With very little autonomy, gram panchayats are not able to implement this act in an effective and efficient manner.
Large Number of Incomplete works: There has been a delay in the completion of works under MGNREGA and inspection of projects has been irregular. Also, there is an issue of quality of work and asset creation under MGNREGA.
Fabrication of Job cards: There are several issues related to the existence of fake job cards, the inclusion of fictitious names, missing entries and delays in making entries in job cards.
The scheme has still not transcended into creating more useful assets beyond roads and irrigation canals.

Issues related to recent proposal:

Considering the shrinkage in the States’ share of taxes following GST and the financial stresses during the pandemic, states will not be able to contribute 40% of funding which is suggested by the Union Minister for Rural Development.
States taking up 40% of the funding burden would affect the payment of wages even further.
Besides, MGNREGS is a demand driven programme and salient especially in poorer States and it is incumbent upon the Centre to ensure its robust funding instead of putting the onus on individual States to do so.

Way Forward

Standing Committee Recommendations: The Standing Committee on Rural Development and Panchayati Raj in 2022 had recommended increased budgetary allocation and increased person-days to MGNREGA.
Immediate Work for Workers: State governments must ensure that public work gets started in every village. Workers turning up at the worksite should be provided work immediately, without much delay.
Support for Migrant Workers: Local bodies must proactively reach out to returned and quarantined migrant workers and help those in need to get job cards.
Empowerment of Gram Panchayats: Gram panchayats need to be provided with adequate resources, powers, and responsibilities to sanction works, provide work on demand, and authorise wage payments to ensure there are no delays in payments.
Convergence with Other Government Schemes: MGNREGA should be converged with other schemes of the government. For example, Green India initiative, Swachh Bharat Abhiyan etc.