Underfunding, misleading claims: The story of MGNREGA in New India

Govt has made tall claims on NREGA implementation; but it is neither keen on providing dignified wages nor allocating adequate funds for the scheme

By Debmalya Nandy
Published: Monday 15 July 2019
Photo: Getty Images

The Union Budget for 2019-20 ignored issues of social security and employment and did not show any intent to boost rural India. The Budget tabled by Nirmala Sitharaman on July 5, 2019 was a disappointment for 13 crore rural households dependent on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). 

The act continues to fight widespread corruption and administrative negligence 13 years since its inception. Technology-based, centralised, faulty implementation has thrashed local accountabilities and increased leakages.

Anyone who has closely observed the jobs scheme based on the act (MGNREGS) will acknowledge that it can be revived only through:

  1. Adequate allocation of Budget funds 
  2. Timely payments to workers
  3. Completely decentralising implementation
  4. Improving entitlements (ie, wages, compensations and worksite facilities)

The central government failed to acknowledge these issues and tried to paint a false picture — that implementation of MGNREGA has has improved in the last five years.   

It has made tall claims time and again on MGNREGA implementation through faulty MIS (Management Information system), flawed studies and surveys; but the government is neither keen on providing dignified wages nor allocating adequate funds.

The Centre has also unlawfully denied paying minimum wages to workers. Agricultural minimum wages exceed MGNREGA wages in almost all states.

The 2019-20 Budget has Rs 60,000 crore for MGNREGA, lower than the Rs 61,084 crore revised estimate for 2018-19. This reduction in the budget has no explanation.

Independent activists, researchers and organisations working on MGNREGA have repeatedly claimed with rationales that the scheme can't function properly with anything less than Rs 88,000 crore. 

The Centre had to allocate supplementary budgets for three straight years after original allocations were exhausted in the first few months of the respective financial years due to heavy demand from workers. Supplementary allocations, hwoever, were considerably delayed and slowed down work across the nation. 

The government has the power to release funds centrally to workers’ accounts and the luxury to control the pace of the programme through slowing down administrative processes, non-release of funds to states and delay allocating supplementary budget. Therefore, it becomes easy for them to play with the numbers on the MIS and keep the figures well below targets set at the beginning of the year. 

Going by MIS figures, the Centre generally argues that allocated funds are adequate and supplementary funds are used to manage deficit. However, the truth is that the potential, need and demand for work are much more than what is finally shown as achieved on the MIS.

There are currently about 13 crore job card (JC) holding families in the nation, of which 7.5 crore households have worked at-least one day in the last three years (recorded as active JCs), according to the official website.

To ensure adequate opportunities for these 13 crore households to access 100 days' employment, the government need to allocate at least Rs 2.8 lakh crore (Rs 217 / person / day).

Even if the government intends to provide allocations for at least 50 days' employment for active JC-holding families, nothing less than Rs 81,000 crore will be required annually.

Allocation for a year includes pending liabilities of previous years. That has ranged Rs 5,000-10,000 crore in the past three years, eating into the budget in real terms. Also, budget calculations never adjust for inflation.

Work demand for NREGS 

Let’s look at another perspective to understand the inadequacy. Considering each application demands work for at least 14 days, according to 2018-19 data, the government should allocate funds for at least 310 crore person days. The government though approved only 256 crore person days in ’18-19 and 258 crore for ’19-20.

Registered work demands on MIS are far less than the actual needs and demands.

Genuine work demands are not registered in most regions and dated receipts are not provided, thereby denying employment to workers. Moreover, people also do not get work under MGNREGA despite being in need as adequate schemes are not opened by local administration. In some areas of certain states, MGNREGA work opens only during specific seasons and time.

The centre needs to ensure uninterrupted operations by primarily ensuring allocation of adequate funds for the programme. The Centre should respect the idea of the decentralised planning processes through Gram Sabhas across the country and allow adequate fund allotment, according to labour budgets provided by each Gram Panchayats.

NREGA wages

Workers across the nation have been demanding higher wages in accordance with the recommendations of the Seventh Pay Commission, but to no avail. Different committees constituted by the Centre vouched for higher MGNREGA wages, but they have been conveniently ignored.

The recent central committee for fixation of national minimum wage, headed by Anoop Satpathy, recommended that the national minimum wage should be fixed at Rs 375 per day. Union Minister for Rural Development Narendra Singh Tomar, however, recently said the national minimum wage will not be applicable to MGNREGA and will be governed by its own law.

His knowledge and understanding of the Act seems incomplete as it primarily states that the MGNREGA wages cannot be less than the minimum wage.

These open violations of the law raise a question mark on the government’s intention for the poorest communities.

Further, the Centre’s valiant attempts to prove that payments have been streamlined through the Aadhaar-linked payments (ALP) system, is a joke on the workers who have been suffering due to the centralised Aadhaar-based payments (ABP) system.  

MGNREGA and Economic Survey

The recent Economic Survey indicated that prior to 2015, when direct benefit transfer (DBT) via ABP came into effect, all MGNREGA payments were done through Gram Panchayat bank accounts. It is a false claim.

The Centre had been making payments to the bank accounts of workers from 2011 through electronic fund management system (E-FMS). It is, however, not very difficult to understand why 2015 has been taken as a benchmark.

The Survey mentioned that ABP reduced duplication of job cards and depleted corruption at local levels. This government has been quite active in the past few years to establish the narrative that Aadhaar has been able to wipe out ghost beneficiaries from the system and managed to save significant tax money, which has been invested in other developmental and welfare activities.

The narrative of ‘Aadhaar-based savings’ is a myth and far from reality. On the contrary, many genuine job cards have been deleted due to hierarchical pressure in implementation of DBT. An application under the Right to Information in 2016-17 revealed so called “ghost beneficiaries” only constituted 1.4 per cent of total JC holding households.

MGNREGA payments worth more than Rs 1,000 crore have been rejected citing “inactive Adhaar” from 2015-16 to 2018-19. How can an Aadhaar be inactive is a mystery.

The survey also claimed a reduction in delays in wage payments post-ALP.  The use of Aadhaar in payments arise once pay orders are sent to the Centre and wages are released centrally through the electronic payment system via Aadhaar-based DBT.

Prior to the signing of the pay order, there are multiple reasons for payments being delayed due to local administrative lapses. Aadhaar has no solution for these implementing and delivery flaws. The survey report seemed to have completely ignored the current state of governance and the incompetence of the administration in ensuring proper supply.

Delay in NREGA payments

It is now well known that the centre has defined MGNREGA payments complexly. They have divided the process into two stages; Stage I is considered to be the set of processes until local authorised functionaries sign electronically generated pay orders; In Stage II, the Centre credits wages to accounts.

The faulty MIS in NREGA does not account for the Stage II delays and shows a misleading figure of on-time payments. So, while ideally a delay should be calculated if wages are not credited to worker’s accounts in 15 days, the delay on the part of the Centre is not really accounted. 

The Union government was directed by the Supreme Court (May 18, 2018 verdict) to show delays in both stages in the official website. The Centre, however, recently included a report Stage II tracking on the website, which does not show the delay but only gives out the volume of transactions currently pending. This anyway was shown in other reports earlier.

The government should come up with only one delay-payment report, accounting for the entire time taken and delays during the closure of the muster roll and wages getting credited to worker’s accounts. The current two-stage conundrum is a trick tactfully engineered to create a false impression.

The MGNREGA Sangharsh Morcha and People’s Action for Employment Guarantee (PAEG) — organisations and individuals working on MGNREGA — recently said underfunding and inappropriate use of technology continue to violate worker’s entitlements and demanded adequate allocation.  

Is the  Bharatiya Janata Party-led government interested in grassroot realities after securing a powerful mandate despite ignoring real, ground issues?

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