Job half done

25 per cent funds allocated to national rural employment scheme remain unspent

By Jitendra
Published: Saturday 30 November 2013

Job half done

The scheme helped UPA return to power in 2009

Poor planning is crippling the government’s flagship employment scheme, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). In most states funds for the scheme could not be utilised in absence of comprehensive plans at the panchayat, block and district levels.

MGNREGS, which was introduced in 2006, guarantees 100 days of wage employment in a financial year to a rural household whose adult member volunteers to do unskilled manual work.

But government data shows that only 75 per cent of funds allocated for the scheme have been utilised in the last seven years (see ‘Wasted money’).

imageThe underutilisation of funds has resulted in poor performance. The government has failed to provide jobs to over three million households in the past seven years. The scheme could provide the mandatory 100 days of employment to only 8 per cent of the beneficiaries. The national average person-days is only 42 (see ‘Sorry state of affairs’).

The scheme was one of the main reasons behind the re-election of the UPA government in 2009. With general elections next year, the government last year revived the programme with new guidelines and is calling it MGNREGS-2.

What went wrong

MGNREGS uses a bottom-up approach for planning, in which the gram sabha (every voter is a member) draws an annual list of works the village requires and the number of people it will employ. The village panchayat secretary then makes a proposal on the demands of the gram panchayat and submits it by October 15 of each year to the block panchayat, which has several gram panchayats under it. The block panchayat then analyses all the proposals and draws an inter-gram panchayat proposal and submits it to the district panchayat. The district panchayat draws a comprehensive report and submits it to the state. Besides the annual work plan, MGNREGS operational guidelines also have the provision for a district perspective plan (DPP), which aims to identify works that have the potential of generating long-term employment.

A Comptroller and Auditor General of India report released in April this year pointed out that there is delay in the submission of annual reports at every level. At times, submission of proposal by the gram panchayat to the block panchayat can be delayed by 21 months (see ‘Structural delays’).

Source: Comptroller and Auditor General of India

The report says 26 per cent districts do not prepare annual plans and 46 per cent districts don’t have a DPP.

Poor district perspective plans

The operational guidelines of MGNREGA call for formulation of DPPs to facilitate advance planning and development perspective for districts.

Rural development ministry is clueless about the implementation of the DPP provision. Aparajita Sarangi, joint secretary MGNREGS, rural development ministry, says: “Many states delay their annual plans so it is hard to think about perspective planning for districts. Regarding advance planning, it is decided in the 12th plan to prepare two-year gram panchayat perspective plans. From this financial year onwards, we have asked states to direct gram sabhas to plan projects with two year shelf life.”

Government documents say only 69 of the 600-odd districts, have formulated DPPs since the launch of the employment scheme in 2006. Also, most of the DPPs for MGNREGS are based on the DPPs of an earlier programme, the National Food for Work Programme. Satish M K, rural policy analyst and vice-president of IDFC Foundation, says: “DPCs can help panchayats in charting out DPPs. Both have a bottoms-up approach and can consolidate inter-panchayat and block programmes by judicious use of local resources.” The foundation recently released the Indian Rural Development Report 2012-13.

Even Tamil Nadu, one of the best MGNREGS performing states, has failed to generate 100 days of work, “despite having accurate labour budget”, says Kumar. In the case of Uttar Pradesh, one of the worst MGNREGS performing states, things have not improved despite regular meetings of gram sabhas because of lack of public participation. “Village residents are not involved in planning so they lose interest during implementation of the scheme,” says Singhal.


“The problem is that the role of panchayat has been reduced,” says Vijay Kumar, former secretary, Ministry of Rural Development. “For instance, when we look at the labour budget that the state proposes, it is predominantly based on the pattern of the previous year. It is not a bottom-up approach based on the grassroots-level assessment of the actual demand.”

He also points out that there is a relatively big gap between what is projected and what is achieved by the states. Even Comptroller and Auditor General of India has observed a large shortfall between planned employment generation and the actual generation of employment. In its audit report, the shortfall in actual employment generation against the projected employment ranged between two per cent and 100 per cent in state annual plans. Kumar says poor planning at the local level has led to inefficient use of funds. “Enough jobs are not being created,” he says. “As a result, while some panchayats utilise the entire amount and still fail to provide 100 days’ work, the remaining do not carry out work and the money remains unspent.”

Arun Singhal, principal secretary, Department of Rural Development in Uttar Pradesh, holds lack of local participation in the planning process responsible for the poor performance of MGNREGS. “We couldn’t generate enough person-days because of lack of projects at the grassroots level,” he says.

Weak panchayati system

MGNREGS was conceptualised as a people-driven programme where panchayati raj institutions were empowered to plan, implement, monitor and audit the scheme’s progress. But, the panchayati system has been crippled by bureaucratic interference, lack of transparency and accountability, and absence of district planning committees.

Richard Mahapatra

A Parliamentary Standing Committee report, which was released in August, recommends district planning committee (DPC) should be involved, along with panchayati raj institutions and gram sabhas, in planning and execution of DPP. DPC is a constitutional planning body devoted to preparation of annual and five-year plans for a district.

“As per MGNREGS operational guidelines, there is no role of DPC, but the formation of DPCs can definitely help in strengthening the panchayati raj system and the planning process,” says S M Vijayanand, additional secretary, Ministry of Rural development. A DPC has elected representatives of rural and urban panchayats, local members of the Assembly and Parliament and designated officials. It is chaired by the district collector.

T Raghunandan, former joint secretary of the Ministry of Panchayati Raj, says decentralisation in planning has not happened because political parties are not interested in it. “Independent functioning of DPC would end the patronage model system of delivery. No political party wants this,” he says.

Union rural development minister Jairam Ramesh also believes states do not want to share power with DPC.

“The setting up of a DPC is a Constitutional provision which every state has to undertake, but states are reluctant to share or devaluate power to DPC. In the absence of DPCs, panchayati raj institutions fail to deliver expected results. It is the duty of the panchayati raj ministry to pursue the matter with states to make the panel functional,” he says.

Kumar told the standing committee that some parts of the Act could not be implemented due to poor panchayati raj mechanism. “MGNREGS and panchayati raj cannot be seen separately. It is the need of the hour to strengthen panchayati raj institutions for better implementation of this scheme,” he says.

The standing committee report says that while all states, except for Jharkhand and Uttarakhand, have set up DPCs, most panchayats have failed to formulate DPPs, a necessary condition for effective utilisation of funds available under MGNREGS. Vijayanand says the reason for the failure is that most DPCs are only on paper.

Planning Commission member Mihir Shah has similar sentiments.

Shah believes the poor performance of DPC is because “we lack passion towards strengthening panchayati raj system”. In the 12th Five-Year Plan, rural development ministry volunteered to provide one per cent funds from its big schemes to panchayati raj ministry for strengthening panchayati raj system. We have launched the Rajiv Gandhi Panchayat Sashaktikaran Abhiyan scheme to empower panchayats. The rural development ministry has devoted Rs 6,000 crore to strengthen panchayati raj institutions,” he says.

Kerala is the only state where DPC is functional “to some extent”. “Here 25 per cent of state plans are approved by the DPC,” says Vijayanand.

Raghunandan calls Kerala’s DPC model as “backdoor entry system because the DPC is only approving plans and is not involved in planning or consolidating programmes”.

Arbitrary distribution of jobs One of the biggest fallouts of poor planning is the scheme’s failure to generate enough work to employ all applicants. As a result, there is rationing of jobs. gram panchayats issue job cards and distribute jobs in an arbitrary fashion, leaving out several qualified applicants.

According to IDFC Foundation’s Indian Rural Development Report 2012-13, in poor performing states such as Bihar, many deserving job seekers are facing caste bias. The report also says that in many places, farmers bribe village heads not to give jobs under MGNREGS during the peak agricultural season to get cheap labour.

“It is also an issue of awareness of rights and empowerment to demand work. If individuals do not get jobs within a fortnight, they can move court. A political movement is required to generate awareness about the right-based programme to realise its true potential,” says Rajesh Bhushan, joint secretary, rural development ministry.

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