7 PM Editorial |A Moment for the True Revival of MGNREGA | 22nd May 2020

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A Moment for the True Revival of MGNREGA

Context: The Centre announced to pump additional Rs 40,000 crore for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for FY21, as part of the ‘Aatma Nirbhar Bharat’ stimulus package to allay the plight of the migrant workers returning to villages from the cities.

  1. Concept:MGNREGA is a social security measure that aims to guarantee the ‘right to work’. It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
  2. Features: Employment must be provided with 15 days of being demanded failing which an ‘unemployment allowance’ must be given. Gram Sabhasmust recommend the works that are to be undertaken and at least 50% of the works must be executed by them.  PRIs are primarily responsible for planning, implementation and monitoring of the works that are undertaken. Social audits are conducted by gram sabhas to enable the community to monitor the implementation of the scheme. Funding is shared between the centre and the states.
  3. Operation:Total individuals working under the scheme rose to 7.87 crore in FY20, with the number of households rising to 5.47 crore. This was the highest since at least FY17, indicating a lack of job opportunities in the broader economy. A record number of 9.33 crore persons demanded work under MGNREGA in last financial year, against that 9.30 crore individuals were offered jobs and 7.89 crore individuals worked.
Significance of MGNREGA 
  1. To Fight the Covid Crisis:Migrant workers in the country number between 12 crore and 14 crore at any point of time, including 6 crore to 8 crore short-term migrants, most of whom are now headed back to their villages as their work sites in urban areas have closed because of the lockdown. Many others might enroll themselves since employment prospects are likely to remain stressed in urban areas for several months.
  2. Social Security and Social Justice:MGNREGA has been a critical source of income for female-headed households. A major proportion of the beneficiaries — much higher than their percentage in the general population — belong to SC/ST and other marginalized communities.
  3. Sustainable Assets:The scheme has boosted agricultural productivity through development of wasteland/fallow land, and construction of post-harvest storage facilities and work sheds. MGNREGA works have contributed to improved ground water levels, and increased availability of drinking water for humans and livestock.
  4. Rural Economy:It has given a fillip to rural entrepreneurship, with households using the supplementary income to start a rural business. It has a multiplier effect on the rural economy, with the additional purchasing power generated from it spent on items produced in the rural economy.
  5. Human Development:In many states, up to half of the MGNREGA income is spent on food, which improves health and nutrition — a critical factor in a country plagued by malnutrition.   
Criticism of MGNREGA
  1. Labor Market Distortions:MGNREGA has altered the power balance between the landless poor and their employers (agricultural landlords, labor contractors), making it less loaded in favor of the latter. By raising rural incomes, it has decreased distress migration to the cities, thereby reducing the numbers of the reserve army of labor, and increasing the cost of labor.
  2. Existential Crisis:State governments had begun to implement MGNREGA like a supply-driven scheme, instead of running it like a demand-based guarantee backed by law.
  3. Low Wage Rate:Various judgements have upheld that the MGNREGA wage rate cannot be less than the minimum agricultural wage rate of the state. The ridiculously low wage rates have resulted in lack of interest among workers in working for MGNREGA schemes, making way for contractors and middlemen to take control, locally.
  4. Insufficient budget allocation:MGNREGA’s success at the ground level is subject to proper and uninterrupted fund flow to the states. Almost every year, more than 80 per cent of funds get exhausted within the first six months.
  5. Lax Implementation:Workers had begun to lose interest in working under it because of the inordinate delays in wage payments. With very little autonomy, gram panchayats had begun to find implementation cumbersome.
  6. Too much centralization weakening local governance:A real-time MIS-based implementation and a centralized payment system has further left the representatives of the PRIs with literally no role in implementation, monitoring and grievance redress of MGNREGA schemes.
Way Forward

Short Term Measures in MGNREGA to fight Covid Crisis 

  1. Workers turning up at the worksite should be provided work immediately, without imposing on them the requirement of demanding work in advance.
  2. Local bodies must proactively reach out to returned and quarantined migrant workers and help those in need to get job cards.
  3. At the worksite, adequate facilities such as soap, water, and masks for workers must be provided free of cost.
  4. Gram panchayats and elected representatives need to be provided with adequate resources, powers, and responsibilities to sanction works, provide work on demand, and authorize wage payments to ensure there are no delays in payments.
  5. The limited coverage of bank infrastructure in rural areas must not be made a hurdle. Attempts to distribute wages in cash, sans biometric authentication, must be rolled out.
  6. While many governments will possibly prioritize individual land-based works to comply with instructions of physical distancing, it is important to also keep community works going to ensure that landless workers are not crowded out of the program. 

Long Term Measures for Revival of MGNREGS

  1. Funds:After the additional Rs 40k crore allocated, the budget for 2020-21 is now above Rs 100k crore. This is the highest allocation for MGNREGA in any year since the passage of the law. However, the allocation, which amounts to 0.47 % of the GDP continues to be much lower than the World Bank recommendations of 1.7 % for the optimal functioning of the program.
  2. Wages:Wages offered under MGNREGA were upped in April, from Rs 182 to 202 per person. This is too small an increase and need be revised upwards.
  3. Minimum Work:The limit of 100 workdays per year for a member of each rural family needs to be raised to 150 days.
  4. Demand Orientation:Need to strengthen the demand-driven aspects of MGNREGA through a focus on local level social audits, funding and tracking of outcomes. In order to improve transparency and the accountability of Sarpanchs, it is recommended that MGNREGA projects be tracked right down to the village-level and not just the Gram Panchayat level as is the practice now.
  5. State Capacity:States should be provided with support to improve their capacity and allowed a degree of flexibility in MGNREGA implementation.

With nearly eight crore migrant workers returning to their villages, and with an additional allocation for the year, this could be a moment for the true revival of MGNREGA.

 Main Source: https://indianexpress.com/article/opinion/columns/india-lockdown-rural-distress-coronavirus-a-moment-to-revive-mgnrega-6421558/

 Mains Question (GS 2: Topic 12 – mechanisms for vulnerable sections)
  1. MGNREGA has yielded many benefits to the vulnerable sections in rural areas, but it continues to be marred by implementation hurdles and lack of political will. Discuss.


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