The funding and demand for MGNREGA

Source: The post is based on the article “The funding and demand for MGNREGA” published in The Hindu on 1^st February 2023.

Syllabus: GS 2 – Governance

Relevance: MGNREGS and associated concerns

News: The article discusses the performance of MGNREGS and challenges associated with it.

What are some highlights of Economic Survey 2022-23 on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)?

The Economic Survey 2022-23 showed that 6.49 crore households demanded work under the MGNREGS.

The survey credited the scheme for having a positive impact on income per household, agricultural productivity, and production-related expenditure.

It also said that the scheme helped with income diversification and infusing resilience into rural livelihoods.

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

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How has MGNREGA helped during the Covid Pandemic?

It acted as a lifeline for a record 11 crore workers during the first lockdown in 2020.

Wages earned under MGNREGA helped compensate between 20% to 80% of the loss of income caused because of the lockdown. The demand for the work also increased during the pandemic.

Moreover, the demand for jobs under MGNREGA has seen a decline in recent months but it is still larger than pre-pandemic levels. This shows that rural households are still in need of the job despite the end in curbs of pandemic.

As per the Ministry of Rural Development, demand under MGNREGS has doubled in the last seven years,

Therefore, looking at the huge demand for jobs under the scheme, the government has increased the budget for the scheme over the years.

How has the Centre’s allocation for MGNREGS changed over the years?

The budgetary allocation for the scheme has increased successively since 2013 from ₹32,992 crore in the 2013-14 Union Budget to ₹73,000 crore in 2021-22.

However, in recent years, the actual expenditure on the scheme has successively been higher than the amount allocated to it at the budget stage.

What are the challenges with the implementation of MGNREGA?

Decline in the number of days of employment: The scheme provides 100 days of employment per household per year. However, since 2016-17, on average, less than 10% of the households completed 100 days of wage employment.

Further, the average days of employment provided per household under the MGNREGS fell to a five-year low this financial year.

Increasing Budgetary allocation: Every year the budget allocation on MGNREGS increases. However, it should be at least ₹2.72 lakh crore for FY 2023-24, if the government intends to provide legally guaranteed 100 days of work per household.

Moreover, every year, about 80-90% of the budget gets exhausted within the first six months. This causes a slowdown of work on the ground and a delay in wage payments to workers.

Delay in wage Payments: There has been delay in the payments of wage to workers, even though SC has directed the centre to release the wages on time. Wage delays also have an impact on the MGNREGA work. For example, vendors are reluctant to supply materials for any new work due to the delay in payments.

Minimum Wage Rate: Minimum wage rate under MGNREGS is fixed by the Centre on the basis of the Consumer Price Index-Agricultural Labourers. However, the type of work done by agricultural labourers and MGNREGS workers was different.

Therefore, it has been suggested that minimum wage should be decided on the basis of the Consumer Price Index-Rural. It is more recent and provides for higher expenditure on education and medical care.

Other issues:  Fake job cards, corruption, late uploading of muster rolls, and inconsistent payment of unemployment allowance also hampers the implementation of MGNREGS.