MGNREGS runs out of funds; Ministry seeks more budget

Source: The post is based on the article “MGNREGS runs out of funds; Ministry seeks more budget” published in “The Hindu” on 7th October 2023

What is the News?

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is facing a deficit of around Rs 6,000 crore.

To address this deficit, the Ministry of Rural Development (MoRD) has requested a supplementary budget of ₹23,000 crore from the Finance Ministry.

What is MGNREGA?

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was passed in 2005 and aimed at enhancing the livelihood security of households in rural areas.

Under it, the MGNREGS is a demand-driven scheme that guarantees 100 days of unskilled work per year for every rural household that wants it, covering all districts in the country except those with a 100% urban population.

There are currently 15.51 crore active workers enrolled under the scheme.The types of projects undertaken for employment generation under MGNREGA include those related to water conservation, land development, construction, agriculture and allied works.

Under the scheme, if work is not provided within 15 days from when it is demanded, the worker has to be given a daily unemployment allowance. 

What are the challenges in the MGNREGA implementation?

Low Budget allocation: For the fiscal year 2023-24, MGNREGA was allocated ₹60,000 crore which is 18% less than the budget estimates of ₹73,000 crore and 33% less than the revised estimates of ₹89,000 crore for the previous fiscal year 2022-23.

Low Employment Completion: MGNREGA guarantees 100 days of employment per household per year.But data shows since 2016-17, on average, less than 10% of the households completed 100 days of wage employment. 

Delayed Wage Payments: Delays in paying wages to MGNREGA workers continue to be a problem.

Minimum Wage Rate Issue: The minimum wage rate for MGNREGA is calculated based on the Consumer Price Index-Agricultural Laborers, which differs from the work done by MGNREGA workers.

– Activists have suggested a switch to the Consumer Price Index-Rural, which accounts for recent trends and higher expenditure on education and medical care.

Corruption and Fraud: Challenges include fake job cards, widespread corruption, late uploading of muster rolls, and inconsistent payment of unemployment allowances, as pointed out by the Parliamentary Committee.