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MGNREGA: Wake-up call

Print edition : Mar 11, 2022 T+T-

Women working under the Mahatma Gandhi National Rural Employment Guarantee Act on the banks of Padianallur tank in Chennai, a file photograph. Women generated over 50 per cent of the persondays under the scheme in the current fiscal.


Giriraj Singh, Union Minister for Rural Development and Panchayati Raj, in the Lok Sabha on February 11.


Work under the MGNREGA in May 2021 in Telangana’s Khammam district. Reverse migration during the pandemic pushed up demand for work.

A Parliamentary Standing Committee pulls up the Rural Development Ministry in its report on a “critical evaluation” of the MGNREGA and calls for more investment in the scheme.

A P arliamentary Standing Committee report of the Ministry of Rural Development and Panchayati Raj, tabled in February, strongly recommends enhancing the budget for implementation of work under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, higher wage rates, and increasing the number of persondays to 150 from the present 100 days. (The report makes 33 recommendations in all.) It has also pulled up the Rural Development Ministry for its “lackadaisical” approach towards the scheme.

The committee was “bemused” that the Ministry as the nodal agency had highlighted only the “loopholes” of State governments. This was “completely unacceptable” and the blame game was “unpalatable”, it said. The need of the hour in a federal form of government was “not finger-pointing” to the “detriment of a public welfare scheme” but working in “unison” with the “common goal of the upliftment of the lives of the rural masses”. It described as “unfathomable” the notified wage rates of Bihar, Uttar Pradesh, Jharkhand and West Bengal at Rs.198, Rs.204, Rs.198 and Rs.213 respectively.

Taking a strong view of pending wage liabilities of Rs.2,76,378.22 lakh as of November 2021, the committee stated that it felt “sorry" at the state of affairs. Noting that the beneficiaries of the scheme were people whose hopes for a “decent upliftment of their economic status” hinged upon the “succour” from the scheme, it held that “no reason was good enough” for the “huge pendencies” and asked the Ministry to “pull up its socks”.

It has also expressed surprise at the reduced budget for the scheme in the current fiscal year. The committee, which undertook field visits in some States, observed that the Revised Estimates for the last four to five years had been going up in keeping with the increased demand for work. Therefore, the rationale for keeping the budget estimate for 2021-22 at Rs.73,000 crore was “perplexing”, especially as the expenditure for the previous financial year was Rs.1,11,170.86 crore. The government had itself acknowledged a surge in demand for work in 2020-21 because of reverse migration and the consequent dependence on MGNREGA work as a “last resort of solace”. The Department of Rural Development, it said, should review its budget keeping in mind expenditure of the last few years.

The report is a scathing indictment of the reduced importance given to the MGNREGS, considering the massive scale of rural distress, rural unemployment both in the pre-pandemic and pandemic periods. The MGNREGS as envisaged under the Act is a demand-driven scheme. The Central government under-provided for the scheme in the Budget Estimates of 2021-22, which drew a critical response in the parliamentary committee report. The Budget Estimates for 2022-23 also under-provided for the scheme.

Government spokespersons defend the decision on the grounds that the scheme is demand-driven and is a safety net rather than a solution for unemployment; they say that the Budget for the current fiscal focusses on creating employment and that the dependence on MGNREGA has been consequently reduced. In 2020-21, the allocation for the scheme in the Revised Estimates was much higher than the figure in the Budget Estimates because of the lockdown-induced distress; yet the amount that was released finally fell short of the figure in the Revised Estimates. The Central funds released until September 2021 was less than what was released in 2017-18.

Under the 2005 Act, hundred days of guaranteed wage employment must be provided each financial year to every rural household whose adult members volunteer to do unskilled manual work. The committee found that the average number of days of work per household was 51.52 days in 2020-21 and 31.68 days in 2021-22 until August 2021.

The average wage rate in 2021-22 was Rs.206.39 and Rs.200.72 in 2020-21.

Under the Act, the Central government is supposed to meet the cost of wages and three-fourths of the material cost of the scheme and a percentage of the administrative costs. The State governments are supposed to pay the unemployment allowance, one fourth of the material cost and administrative costs of the State Councils. The Act provides for an unemployment allowance for those persons who were not given work despite an application seeking employment, payable within 15 days of the application. Wage payment delays have to be compensated for.

The households that were provided employment in 2021-22 numbered 537.78 lakh (as of August 31, 2021), of whom 7.76 lakh received 100 days of work. As these figures are until August 2021 only, it can be assumed that the actual numbers are somewhat higher. However, if the figures of the previous year are looked at, the scenario is not very encouraging. In 2020-21, 755.36 lakh households were provided employment, but only 72 lakh households completed 100 days of work. In 2019-20, of 548.23 households that were provided work, 40.60 lakh households completed 100 days of employment. The average number of days of employment per household was 31.68 in 2021-22 (until August 2021), 51.52 in 2020-21, 48.4 in 2019-20 and 50.88 in 2018-19. Among the BIMARU States, the average was below the national average in Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. The States that ranked consistently above the national average were Kerala, Meghalaya and Mizoram. The work completion rate was over 90 per cent in Andhra Pradesh, Chhattisgarh, Kerala, Mizoram, Nagaland, Puducherry and Tripura.

Wage rate variations

There was a wide variation in the wage rates. In some gram panchayats in Sikkim the wage rate was as high as Rs.313. In Goa, Kerala, and the Union Territory of Nicobar it was more than Rs.290. In Uttar Pradesh and Uttarakhand, it was as low as Rs.204 and in Bihar, Madhya Pradesh Chhattisgarh and Jharkhand below Rs.200. The figures also revealed a huge pendency in payment of wages running into lakhs of rupees for workers from the Scheduled Castes, Scheduled Tribes and others. Strangely, there appeared to be no problem of pendent wages in the Bharatiya Janata Party-ruled States of Uttar Pradesh, Uttarakhand, Tripura, Goa and Assam.

Among non-BJP States, only Chhattisgarh claimed to have no wage backlog. Overall, unpaid wages ran to the tune of Rs.33,918.30 lakhs for workers from Scheduled Castes; Rs.33,054.60 lakh to workers from Scheduled Tribes and Rs.2,09,405.32 lakh for those in the “Others” category. According to the Ministry, the delay in the payment of wages was because of the failure in the transfer of payment, which was caused by inactive, frozen, closed or absent Aadhaar accounts. The Secretary of the Department of Rural Development put the responsibility on the State governments for not sorting out the technical failures involved, unmindful of the fact that it was the Centre that had made Aadhaar-linked accounts mandatory for payments. He claimed that the rejected transactions amounted to only 1.15 per cent of the total number of responses. Yet, in actual numbers the rejected transactions added up to 3,99,096. For the government, this was a technical glitch; for the three lakh or so workers and their families, it might have been a choice between life and death.

Onus on States: Centre

In response to a question by the parliamentary committee on whether the government would consider increasing the number of days of work under the scheme, the Ministry of Rural Development said 50 days’ additional work could be provided in the event of natural calamities. The onus was on the States to provide extra days of employment if they wanted. The committee was also told that no State had been provided funds for additional working days in the current fiscal year. So, despite the extraordinary circumstances that the rural poor had faced prior to, during and after the pandemic, there was neither any intention to substantially increase the wage rates notified by the Centre, nor any plan to increase the number of days under the scheme.

Data shared by the Ministry from 2018 onwards showed that almost 54 per cent of workers under the scheme were women. Nearly 52.6 per cent of persondays was generated by women in the current financial year. The large number of job cards issued each year since 2018-19 was also a reflection of the crisis. There was a wide gap between the job cards issued and actual employment provided to households. For instance, in 2018-19, 1,334.63 lakh job cards were issued, but households that were provided employment numbered 526.60 lakh. In 2019-20, the corresponding figures were 1,407.24 lakh and 548.23 lakh; in 2021-22, 1,532.99 lakh job cards were issued but only 755.32 lakh households were provided employment. In 2021-22, until November 2021, 1,558.44 lakh job cards were issued but less than 50 per cent, or 605.60 lakh households, were provided work.

The problem in muster roll updation, resulting in delayed payment of wages, was attributed to lack of Internet facilities at the gram panchayat level. About 1.25 lakh gram panchayats had Bharat Net, but as Internet networks were not available, muster rolls could not be filled out or updated. The Ministry had communicated to the States that if social audits were found wanting, money would not be released. The social audits identify financial misappropriation, financial deviation, grievances and process violations. For 2020-21, the government claimed it had made the highest ever allocation for a financial year under the scheme.

Wide disparity in wage rates

The committee was critical of the wide disparity in daily wages across States. It ranged from “as low as” Rs.193 in Chhattisgarh and Madhya Pradesh and Rs.198 in Bihar and Jharkhand to Rs.318 in three gram panchayats in Sikkim. The majority of the States were found to be paying less than Rs.250. The committee expressed concern at the high cost of living, inflation and price rise of essential commodities and that the scheme beneficiaries, all belonging to marginalised sections, were surviving on “such amounts”. If wages, it reasoned, were of such nominal nature, people would be forced to move to urban locales. That the wages were a non-incentive was evident from the fact that of 521.61 lakh households that were provided employment in 2018-19, only 52.58 lakh households completed 100 days of employment. In 2021-22, until August 31, 2021, of 537.78 lakh households that were provided employment only 7.76 lakh households completed 100 days of employment. This figure, it said, was “even more poor” than that of previous years.

The committee observed that low wages were one of the major reasons why people opted out of the scheme. It lamented that despite the committee’s repeated recommendation to index the wages with the cost of living, little had been done. A proposal to have a Consumer Price Index (Rural) instead of the present Consumer Price Index (Agricultural Labour) had not been considered. It noted that the wage rates would continue to languish due to no change in indexation. It has also recommended a uniform wage rate to be fixed by the nodal agency given the wide range of wage rates. Wage rates fluctuating from Rs.193 to Rs.318 across States and Union Territories in “no way seem justified”. Bridging the disparity and bringing wages at par would “not only end the conundrum of uncertainty among beneficiaries but serve the larger purpose of welfare of MGNREGA workers”.

The scheme was a last “fall back” option for numerous poor people. It is “high time” that the scheme was revamped in view of the “changing times” and the pandemic. It recommended that the number of days needed to be increased from 100 to 150 days. Describing the picture regarding payment of wages as very grim, it said that it was a “breach of trust of the goal of the scheme”. It expressed shock at the low rates paid in lieu of unemployment allowance paid by States and at the Ministry’s “passing the buck” approach.

The committee was concerned about the low rates of social audits and urged the Department to take up the matter in “all earnest”. It also suggested that social audits be placed in the public domain. It expressed concern at the non-participation of officials from related departments in decisions relating to work commissioned under the scheme. The success of the projects depended on the choices made at the selection level, it noted: “Rather than stalling the project at later stages, discussion in the initial stage would go a long way in ensuring the success of the projects.” It pulled up the Ministry for its failure to appoint ombudsmen as mandated under the Act. Only 263 ombudsmen had been appointed so far against 715 possible appointments. No reason, it said, could be enough to “justify such callousness” for such a long period of time.

Most experts of repute have argued that the government needed to “put money in the hands of the people” in order to generate demand. Given the nature of the crisis and sluggishness in recovery of economic activity, for quite some time many social scientists and others have been demanding enhancement of both rural and urban wages, increase in the number of days of employment, and initiation of an urban employment guarantee scheme.

The committee has rightly argued for enhancing the expenditure for the scheme from the present allocation. For the rural poor, the crisis is immediate and not a prospective one. The increasing allocation since the inception of the Act indicates that rural unemployment levels continue to be high: people are willing to do hard manual work for even low wages. The report underscores all these concerns. Though its recommendations are not binding on the government, it is nevertheless a document that needs to be taken up seriously especially as it is attuned to present-day realities faced by the rural poor.

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