MGNREGA analysis: A triple blow to job guarantee scheme

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Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, one of the most ambitious schemes aimed at removing poverty and biggest social welfare programmes in the world, aims at guarantying 100 days of work to people in rural areas.
The programme has arguably lifted lakhs of people out of poverty however there are few lacunas that needs to be addressed.
Among those lacunas, lack of sufficient funds, rampant payment delays and abysmal wage rates act as triple blow to the job guarantee scheme.
Lack of sufficient funds
The program has made fundamental difference for people who could now do much better than before. The issue of finance has to be addressed properly.
  • On one side we have a set of a states performing extremely well, on the other side there are states that are performing very low due to paucity of funds. There is an urgent need for the centre to address the issue of finance for effective implementation of scheme.
  • Budget allocation over the years has been insufficient. The real budget of 2018-19 is much lower than that of 2010-11 (after adjusting for inflation).
  • In August 2017, the Ministry of Rural Development demanded a supplementary MGNREGA budget of ₹17,000 crore, but the Ministry of Finance approved only ₹7,000 crore, that too in January 2018.
Rampant payment delays
  • The scheme is meant to be demand-driven in the sense that the government is mandated to provide work within 15 days of a worker seeking work. Otherwise the worker is entitled to an unemployment allowance.
  • A second key provision of the Act pertains to payment of wages within 15 days of completion of work, failing which a worker is entitled to a delay compensation of 0.05% per day of the wages earned.
However, both these provisions have been routinely violated. Lack of funds has led to a subverting of these provisions in letter and spirit.
  • The total amount of wages pending under the MGNREGA scheme for the whole country (2016-17) was around ₹11,000 crore.
  • Only 21% of payments in 2016-17 and 32% of payments in the first two quarters of FY17-18 were made on time.
The principal reasons for payment delays were “infrastructural bottlenecks, (un)availability of funds and lack of administrative compliance”.
Abysmal wage rates
  • The third issue is about stagnating MGNREGA wages. Delinking of MGNREGA wage rates from the Minimum Wages Act (MWA), 1948 has contributed to this.
  • MGNREGA wages are a less lucrative option for the marginalised, being lower than the minimum agricultural wages in most States.
  • This can push primary beneficiaries of the Act, women, Dalits and Adivasis to choose more vulnerable and hazardous employment opportunities as they get paid more than MGNREGA work. Such contravention of the MWA is illegal.
Conclusion:
All the above lacunas reflect that there is only a legal and moral crisis created by the Centre. The poor are paying a heavy price for this throttling of funds by the Centre. The fight is not even for a living wage but one for subsistence.
Connecting the dots:
  • Lack of sufficient funds, rampant payment delays and abysmal wage rates have acted as triple blow to the job guarantee scheme. Do you agree? Critically analyze.
  • Examine the issues that needs to be addressed properly for effective implementation of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.

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