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Rural jobs scheme too big to fail

By Vatsal Srivastava ,

There has been quite an outrage for the lack of vision towards the social sector in Arun Jaitley’s budget. There was a lot of anticipation on how the new finance minister will tweak the UPA’s flagship programme – the MGNREGA. Jaitley said that the program will now focus on better and more efficient asset creation. However, he gave no details as to how he intends to reduce leakages and corruption in the act.

The fact is that MGNREGA is here to stay for the sole reason that it is too big to fail.

The MGNREGA is the largest public employment programme in the world. Since its inception in 2005, it has generated 250 crore days of employment for the rural poor and there are currently 10 crore persons working under the programme, implying that one of every three rural households has worked under MGNREGA. As of 2013-14, 138.08 lakh works were taken up under MGNREGA on themes ranging from rural connectivity, flood control, water conservation and harvesting, drought-proofing, micro-irrigation, renovation of traditional water bodies, land development, Rajiv Gandhi Sewa Kendras, rural drinking water, rural sanitation and anganwadis, among others. In terms of financial inclusion, 10 crore beneficiaries of MGNREGA have been linked to formal financial institutions to receive their wages.

The sheer enormity of this programme inevitably subjects itself to diminishing rates of efficiency along the years that it is implemented. However, any evaluation needs to be one that is careful and nuanced. The above figures indicate the broad impact that MGNREGA has had on a constituency that it was specifically designed for. But the Act has also been plagued by largely unsubstantiated allegations of creating a “shortage of labour” and contributing to rural inflation. We are yet to see a detailed economic assessment supplemented with genuine statistics on how this is in fact possible. For example, as per the Census data of 2011, during the peak seasons of agriculture (August-December), 2.57 percent of the persondays available for agriculture labour by rural labourers was put towards working under MGRENGA. The corresponding figure of persondays available for agriculture labour that was ‘diverted’ to MGNREGA during the lean season of agriculture stood at a smarting 4.7 percent. The figures do stand in good stead compared to engineered paranoia.

However, resting on the benefits of MGNREGA should not lead one to believe that all is well with the programme. The implementation of the Act is plagued with systemic inefficiencies that are a clear writing on the wall for the eventual collapse of the programme. Some of these include delay in payment of wages to workers having completed work under MGNREGA where today almost 40 percent of the wages paid under MGNREGA are paid beyond the statutory time limit of 15 days; poor durability of assets created under the Act; use of machines and contractors prohibited under the Act; fudging of records; poor average persondays of employment demanded of 45 days corresponding to the entitlement of 100 days; limited technical personnel hired by States and inefficient fund release systems deployed by the central government, among others.

Therefore, the concerned governments need to urgently put in place administrative reforms to ensure any marginal improvement in the implementation of the Act. These include: developing protocols for institutionalizing convergence with line departments for ensuring application of technical expertise while designing assets under the Act; enforcing systematic capture of demand for those households that are most in need of MGNREGA such as scheduled castes/tribes, beneficiaries of land reforms, released bonded labourers and FRA beneficiaries, among others; putting in place a decentralized fund release system to release funds to the states based on principles of automatic debit pull for expenditure incurred; put in place minimum technical personnel to ensure timely measurement and supervision of works and taking punitive action against functionaries causing a delay in payment of wages, among others.

It is important to mention that as a statute, MGNREGA has one of the most rigorous provisions of pro-active disclosure of information and audit requirements than any other social sector policy/law passed in independent India. There is an urgent need to put in place those norms and ensure their compliance for reigning in leakages.

With India facing the worst drought in the last three decades, a programme that has the mandate of reach-out to every rural household of the country and ensuring its right to waged employment cannot be ignored by any political dispensation of the country.

(12.07.2014. Vatsal Srivastava is consulting editor for currencies and commodities with IANS. The views expressed are personal. He can be reached at [email protected])