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Rural Unemployment

MGNREGA: Safety net looks fragile

Print edition : Aug 04, 2022 T+T-

MGNREGA: Safety net looks fragile

MGNREGA workers at Ramakrishnapuram in Khammam district, Telangana in May 2021. 

MGNREGA workers at Ramakrishnapuram in Khammam district, Telangana in May 2021.  | Photo Credit: Rao G N

Though not the only solution to rural unemployment, it is an important social security measure.

Soon after becoming Prime Minister, Narendra Modi mocked the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in Parliament and called it a monumental failure of the United Progressive Alliance government. Interestingly, he added that he would not end the scheme but would keep it alive as a symbol of the Congress’ inability to address poverty.

Five years later, when COVID-19 hit the country, it was MGNREGA that came to the rescue of the rural poor, as a last resort of employment in a crumbling economy. When, in an unprecedented exodus, vast numbers of migrants left the cities to return to their villages, they took recourse to MGNREGA jobs.

The World Bank report titled “COVID-19 Crisis Through a Migration Lens”.
The World Bank report titled “COVID-19 Crisis Through a Migration Lens”.

According to the World Bank, the lockdown impacted the livelihoods of nearly 40 million internal migrants. According to its report titled “COVID-19 Crisis Through a Migration Lens”, around 50,000-60,000 people moved from urban centres to rural areas of origin in the span of a few days. MGNREGA, which guarantees 100 days of work a year to at least one member of every rural household, saved many of them from starvation and probable death. Subsequently, as wave after wave of COVID hit the country, the economy collapsed, triggering record unemployment in both urban and rural sectors. Once again, MGNREGA provided relief to the beleaguered masses.

This is not to say that the scheme is without its share of problems. Ranjan from the Kudar Dori Shakti Sangathan in Bihar told Frontline that they really had to struggle to get work during the pandemic. Even when they managed to get work, they did not receive adequate wages. In Vaishali district of Bihar, the scourge of dalals, or middlemen, siphoning off MGNREGA money has emerged as a grave threat to the functioning of the scheme. “The dalals pay up to 40 per cent of the estimate as commission and get the work done by machines while the workers sit jobless,” said Ranjan. Most people who had returned to the villages were forced to return to the cities when they were faced with the lack of employment opportunities in the rural areas. Moreover, the MGNREGA wage rate is low. In Bihar, it is Rs.210 which is much lower than the daily minimum wage of around Rs.250 in the State. Ranjan and other labourers demand a minimum MGNREGA wage rate of at least Rs.600 to arrest the migration.

In Jharkhand, MGNREGA is popularly called “Marega” (“you will die”.) It implies that working in MGNREGA is a death sentence because of the difficulties workers have to face, including but not limited to registering their demand for work, getting continuous and adequate work, getting paid on time, or at least receiving compensation for wage delays, rejected payment requests, pervasive corruption and commissions, and the technical difficulties in withdrawing hard-earned wages from bank accounts.

Sham of new wage rates

While there are implementation problems with the scheme, the government’s apathy has made it worse. On March 23, the government notified the wage rates for MGNREGA workers for the financial year 2022-23. The hike ranged from a meagre Rs.4 to Rs.21 for various States and Union Territories. Workers in three States—Manipur, Mizoram and Tripura—got no hike at all.

The NREGA Sangharsh Morcha and People’s Action for Employment Guarantee pointed out that the average increase in the MGNREGA wage rate across the country was only 4.25 per cent, whereas Central government employees and pensioners get a dearness allowance (DA) of 31 per cent and it costs the exchequer Rs.9,544.5 crore each year. In a joint statement, they said that while the government revises DA twice a year and pays out thousands of crores for it, it systematically ignores MGNREGA workers. An increase in MGNREGA wages, since it is a base wage, would also lead to upward pressure on rural and subsequently urban industrial wages, they said. In times such as the current economic distress, it would help increase rural expenditure, leading to an increase in aggregate demand in the economy, crucial for recovery.

Women working at a MGNREGA project site at Umachagi village in Hubballi taluk, Karnataka.
Women working at a MGNREGA project site at Umachagi village in Hubballi taluk, Karnataka. | Photo Credit: KIRAN BAKALE

Echoing these views, Dipa Sinha of the Right to Food Campaign said that while MGNREGA alone was not a solution to the employment problem, it is an important social security measure. It can contribute to the revival of rural demand and thereby the economy. At present, purchasing power in the country is declining, so MGNREGA is a good way to put money in the hands of people. But it is not enough and the government needs to do more.

Sinha added: “On the one hand there is jobs distress, while on the other MGNREGA has delayed wages, low wages, and other implementation challenges, including digitisation. Besides, the government is not too keen on continuing with it as it does not fit into their core vision. But the current economic situation has forced them into continuing with it, just as they are being forced to continue with the PDS. Every year, the Economic Survey says that these schemes are wasteful expenditure. But the government realises that it would be politically disastrous to discontinue them. So long as they cannot find other ways of subverting the schemes, they will continue to operate in this half-hearted way.”

According to Vijay Ram S. of the Peoples’ Action for Employment Guarantee (PAEG), the government is not keen on continuing with MGNREGA and has continuously reduced the budget for the scheme, even as demand for work has not reduced. He said: “Even with the wage rate revisions for FY 2022-23, the increases in wage rate have been abysmal. In many States, the increase is less than the increase in rural inflation. The constant crunch in funds has changed the demand-based nature of MGNREGA to a supply-based one. Because of the funds crunch, even States and local authorities are wary and thus give lesser and lesser work.”

In general, MGNREGA reduces underemployment in the rural agricultural sector. It is the last resort for the rural unemployed and also a buffer against urban migration. In the absence of MGNREGA, if a worker is not able to find work in their village or during the agricultural lean season, they will be forced to migrate to cities for a livelihood, increasing the pressure for jobs in cities.

Crucial for women

MGNREGA becomes crucial for women also, who form more than 50 per cent in its total employment. Before MGNREGA, in the lean season women were mostly unemployed, especially in the case of small landholders and peasants. Also, nearly 40 per cent of MGNREGA employment goes to Scheduled Caste or Scheduled Tribe households. This makes it an important contributor to social equity in terms of gender, caste, or class.

Jean Dreze.
Jean Dreze. | Photo Credit: The Hindu Photo Archives

MGNREGA is undoubtedly a major source of fallback employment in rural India. Jean Dreze, eminent economist and one of the chief architects of MGNREGA, told Frontline that in the last five years the scheme generated 3 billion person-days of work per year on an average—50 days per household (on an average) for 60 million households. In individual terms, it employed 90 million workers a year on an average in the same period, with a peak of 110 million in 2020-21.

Dreze said: “These are official figures, probably overestimating actual employment because muster rolls (worksite attendance records) tend to be inflated. Still, what does this cost? MGNREGA expenditure peaked at a little over Rs.1 trillion (1 lakh crore) in 2020-21, or $13 billion at the current exchange rate. That’s about 0.5 per cent of India’s GDP—a modest price to pay for such a far-reaching initiative.” He added: “The main problem with MGNREGA is that it is a pro-worker law implemented by an anti-worker system—a system steeped in indifference, if not hostility, towards working people. Three manifestations of this problem have caused much damage: delays in wage payments, the stagnation of real wages, and resilient corruption.”

A few years ago, PAEG launched a tracker for MGNREGA to analyse its functioning and outcomes. The latest data does not look promising. As on January 1, 298.86 crore person days of work have been generated, which is 9 per cent less than the same period last year. About 11 per cent of the total households that demanded employment under MGNREGA did not get it., implying that even though there was more demand than the person days of work generated in FY 2021-22 until January, lesser person days of work were generated this year.

Insufficient fund allocation by the government year after year has led to a decrease in the person days of work generated each year. This might lead to an increase in unmet demand and pending liabilities every year. As many as 9.94 crore job cards were active as on January 31, 2022. Out of these active job cards, 7.58 crore, or 76 per cent, demanded work this year. The government shared no data on unemployment benefits claimed or given to workers in the management information system. Out of the total households employed under MGNREGA, only 12.31 per cent were employed for 81-99 days and 4.62 per cent were employed for 100 or more days.

Delayed wages

Wage payments to the value of Rs.3,273 crore were delayed by the Central government. This amounts to nearly 6 per cent of total wage payments and involves almost 2 crore wage payment transactions. Payment of compensation owed to workers for delayed payment of wages stood at Rs.11.78 crore, of which only 1.42 per cent has been paid. Sixty lakh wage payment transactions, amounting to Rs.816.63 crore, were rejected as on January 31, 2022.

Neela Devi of Chitoria panchayat in Katihar district, Bihar, said that she had received wages only for the first two muster rolls she had worked in. The payment for many workers like her has been pending for more than three months, and they usually received only half the wages for work.

Unfriendly tech

Compounding these problems, in May the Ministry of Rural Development made the NMMS (National Mobile Monitoring Software, an app-based online attendance system) mandatory for MGNREGA on work sites with more than 20 workers. While it was an attempt to reduce corruption, it resulted instead in a lot of work stoppage, with workers losing their attendance and experiencing technical difficulties. A group of individuals, organisations and institutions wrote to the Ministry expressing concerns and urging the withdrawal of the app, which they said was in violation of the MGNREGA.

Jayati Ghosh, Member of the UN Advisory Board on Multiculturalism, was one of the signatories to the letter addressing issues with the NMMS.
Jayati Ghosh, Member of the UN Advisory Board on Multiculturalism, was one of the signatories to the letter addressing issues with the NMMS. | Photo Credit: C.V. SUBRAHMANYAM

The letter, signed by Jayati Ghosh, Member, UN Advisory Board on Multiculturalism, Aruna Roy and Nikhil Dey of Mazdoor Kisan Shakti Sangathan, Annie Raja of National Federation of Indian Women, and PAEG, among others, highlighted the problems with the app.

The non-provision of physical muster rolls at MGNREGA worksites that record work completed each day in addition to the daily attendance was a direct violation of the Act, which states that measurement record of each work and details of the workers should be available for public inspection.

The NMMS app specified that it was mandatory for workers to upload two time-stamped photos within a predetermined time window designed by the app. This was in direct contravention of Section 3 of the Act, which states that workers are entitled to their wages under MGNREGA on the basis of work completed by them, that is, on a piece-rate basis. By forcing workers to stay for a specified number of hours irrespective of when they finished their work, the app was forcing a time-rate basis for payment of wages.

Moreover, the NMMS order undermined the Ministry’s own initiative towards encouraging women workers from rural areas being trained and appointed as MGNREGA mates, according to the signatories. Having a smartphone was now mandatory for mates to record attendance on the NMMS. However, many women from poorer households, a large fraction of whom belong to SC/ST households, do not have access to smartphones. Besides, the app is designed in English. All messages, errors, and instructions are available only in English, making it even more inaccessible to rural women workers. Technical challenges made the app unreliable. In May, the NMMS faced outages for almost 10 days.

While MGNREGA needs to be strengthened to become a gainful employment option, even supporters admit that it is a scheme of last resort. Other rural employment options need to be bolstered to meet the vast demand for jobs in the villages.

Women renovate a children’s park as part of MGNREGA work in Tamil Nadu’s Kancheepuram district.
Women renovate a children’s park as part of MGNREGA work in Tamil Nadu’s Kancheepuram district. | Photo Credit: VELANKANNI RAJ B

Ramesh Sharma of Ekta Parishad believes that since the ultimate nodal point for MGNREGA is the State and the scheme is dependent on its policies, finances and other structures, which have proven to be fragile, biased and corrupt over time, it is not a long-term solution.

Inspired by the Gandhian worldview of swarojgar (self-employment) through the cooperative model, Ekta Parishad set up during the COVID crisis small units of mahua cooperatives in Chhattisgarh, weavers’ cooperatives in Assam, and brought together broomstick makers in Tamil Nadu led by local women. “The smaller the unit, easier it is to maintain trust,” he said. In Manipur, Ekta Parishad brought together 30 single women to form a weavers’ cooperative; in Chhattisgarh they organised 100 farmers working on scented rice, while in Kalahandi they had 25 people producing black turmeric. The Saharaiya Adivasis near Gwalior in Madhya Pradesh practised shram daan (voluntary contribution of labour) to build a small well. In 2018-19, the villagers reported a good harvest and the migration rate from the area was reduced to zero. During the first wave of the pandemic, in 2020, the villagers offered Ekta Parishad three quintals of wheat for distribution in other areas as they had excess.

These are effective solutions which can be used in tandem with the national policies but their success cannot absolve the government of its responsibility. Ultimately, the buck stops with the elected government of the day.