The demand for MGNREGS work is unmet

Source: The post is based on the article “The demand for MGNREGS work is unmet” published in The Hindu on 7th February 2023.

Syllabus: GS 2 – Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.

Relevance: About the demand for MGNREGS.

News: The allocation for MGNREGA in the Budget is ₹60,000 crore. This is less than 0.2% of the GDP, the lowest ever allocation as a percentage of GDP. World Bank economists had estimated that the allocation should be 1.6% of the GDP.

What is Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)?

What is the rationale behind the reduction in funds for MGNREGA?

What are the challenges in meeting the demand for MGNREGS?

MGNREGA is a demand-driven law. Every household must get work within 15 days of demanding work, failing which the workers are legally entitled to an unemployment allowance. But the demand-driven aspect is not functioning well at present.

For instance, Two crore new job cards were issued between 2019-20 and 2022-23 showing the continued demand. But the average number of days of employment continues to be around 45 days highlighting the demand suppression.

Management Information System (MIS) used in MGNREGA has been used to subvert the Act in many ways. Such as a) The aggregated persondays of work demanded at the State and national level is not available as a national MIS report, b) National MIS reports also grossly underestimate the unmet demand. A private study conducted in four States highlights that 39% of the households did not get a single day of work despite wanting 77 days on average. On the other hand, national MIS reports shows that almost all the households that demanded work were offered work.

Hence the Rural Development Ministry claims that low demand has resulted in Budget cuts, but the reality is opposite.

What are the challenges associated with the inadequate allocation of funds and the demand for MGNREGS?

Inadequate allocations led to a) A steady centralisation of the programme architecture even as wages for most States remain lower than minimum agricultural wages, b) wage payment delays in many areas, c) a rise in unmet demands for the scheme, d) Officials might give fewer days of work to many households or provide many days of work to a few households and e) Officials might not even register work demand on the MIS owing to inadequate funds.

Over all, budget cuts have created a vicious cycle of demand suppression, wage payment delays, overburdened field staff and corruption. These further discourage workers from doing MGNREGA work.

What should be done to meet the demand for MGNREGS?

The person-days of work demanded must be made readily available for each State for that the government should address the real problem of underfunding and excessive centralisation.