Print edition : December 26, 2014

Desilting the Gangula Cheruvu near Boddam village in Vepada mandal of Vizianagaram district under the MGNREGS. A file picture. Photo: C.V. Subrahmanyam

(From right) CPI(M) general secretary Prakash Karat, Tripura Chief Minister Manik Sarkar and Polit Bureau member Brinda Karat at a dharna in New Delhi on November 26 against the drastic changes proposed by the Centre in the MGNREGS. Photo: V. Sudershan

At a dharna in New Delhi on November 26 against the drastic changes proposed by the Centre in the MGNREGS. Photo: V. Sudershan

The Left and other national parties protest against the NDA government’s attempts to dilute the MGNREGS by limiting its budget and reducing its reach.

IN a rare show of solidarity, representatives of several political parties took issue with the Bharatiya Janata Party-led National Democratic Alliance (NDA) government on its controversial proposal to restructure the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The opposition, which was initially confined to the Left parties and hence muted both in the media and in the Budget and monsoon sessions of Parliament, got an unexpected fillip when other parties joined in. In the ongoing winter session, the objections acquired a cogent shape, especially on three aspects: reduction in the budgeted allocation to the MGNREGS as opposed to the projected demand, dilution of the labour-material ratio from 60:40 to 51:49 without a commensurate increase in the overall funds, and reduction in the coverage from 6,576 blocks to 2,500 blocks. The Budget provision was enhanced only by Rs.1,000 crore—it was Rs.33,000 crore in 2013-14 and for the current fiscal (2014-15), it is Rs.34,000 crore.

Responding to a calling attention motion in the Rajya Sabha on November 27, Rural Development Minister Birender Singh said that the MGNREGA was enacted in 2005 with the aim of enhancing the livelihood security of households. One of its “primary goals is also to create durable assets and strengthen the livelihood base of the rural poor”, he said.

The Minister further stated that the government had notified that 60 per cent of the works to be taken up in a district in terms of cost would be for the creation of productive assets directly linked to agricultural and allied activities through development of land, water and tree cover. He declared that the convergence of the MGNREGS with the schemes of other departments was being encouraged to promote quality asset creation. He said the wage-material ratio for works taken up by agencies other than gram panchayats would be counted at the district level instead of the block level to facilitate the creation of more durable assets. He admitted that the Act had achieved significant results in the past eight years. Around five crore households were provided employment each year (29 per cent of the total rural households); 54 per cent of the beneficiaries were women and close to 40 per cent were from the Scheduled Castes and the Scheduled Tribes.

Citing the performance audit of the Comptroller and Auditor General (CAG) of India as recording that 90 per cent of the beneficiaries were either casual labourers or small or marginal farmers, he said the scheme had a positive impact on agricultural production and productivity. In the past eight years, he said, nearly 70 per cent of the total expenditure, or Rs.1,80,000 crore, was paid as wages. But he made it clear that the “current focus of the government was to ensure both wage employment generation and creation of quality assets” and that the list of permissible works was expanded.

“Expensive failure”

Attempts to downplay the significance of the MGNREGS and to portray it as a white elephant have been under way. The scheme’s critics argue that it has reduced the availability of labour for agricultural works (the Union Minister mentioned that landlords were affected), has not created productive assets, and is marred by corruption. In fact, Union Minister for Women and Child Development Maneka Gandhi described the scheme as the most “expensive failure” which made agricultural labour unavailabile and destroyed cultural patterns by affecting, among other things, the carpet and silk-weaving industry in Varanasi. This view is not shared by several State governments.

Several parties and State governments are increasingly throwing their weight behind the scheme. The show of solidarity has extended from Parliament to State Assemblies and even to the streets.

State Assemblies in Jharkhand, Telangana, Tripura and West Bengal have adopted joint resolutions against the Centre’s moves. In West Bengal, the ruling Trinamool Congress (TMC) and the opposition Communist Party of India (Marxist) and the Congress joined hands to propose and pass a resolution decrying the efforts of the BJP government to dilute, truncate and limit the budget for the scheme.

The Centre released a note in September 2014 quoting some studies that questioned the efficacy of the MGNREGS as a poverty alleviation programme. The note fundamentally ignored the fact that the MGNREGS was not an asset creating and guaranteeing scheme but an employment guarantee scheme. The note quotes a study of sustainable livelihood models from Jharkhand done by a Prime Minister’s Rural Development Fellow (an initiative of the United Progressive Alliance (UPA) II government), which says that “the scheme is not solving its real purpose, i.e., to contribute to poverty reduction at the village level through sustained livelihood generation resources. The objective has reduced to fill muster rolls with more and more days of employment [sic].”

It also cites another study by a University of Michigan scholar that says: “The results suggest that the overall direct effects on the labour market are small… given the large size of a programme such as the NREGS with expenditures of about 1 per cent of Indian GDP [gross domestic product], the results raise the question whether the provided welfare benefits are large enough to warrant the existence of such an ambitious scheme, at least in its current form or whether the money would be more efficiently spent on other anti-poverty measures.”

The note says that “in spite of clear evidence of rampant corruption at various places, the scheme continues to be presented as a successful scheme. This, perhaps, is due to a solid network of vested interests involving political party functionaries, government officials, NGOs, research institutes and experts desirous of milking the scheme to their advantages [sic].” It quotes a study from Rajasthan, which contends that the Congress benefited from the scheme and that the vote share of the Congress increased in areas where the funds allocated were more.

A study from Andhra Pradesh says that there was “consistent evidence that the distribution of funds after the elections was politically motivated, either as a patronage effect following the 2009 election or as a vote buying effect leading up to the byelection in 2012 or full election in 2014. Moreover, we find evidence that aggregate MGNREGS spending in the pre-2009 election years is positively related to a shift in the voting patterns towards the UPA coalition in 2009, implying that voters ‘rewarded’ the governing coalition for the well-targeted nature of the programme in the initial years, evidence that overt voting buying was unnecessary to secure their win.”

Increased spending by UPA-I (2004-09), primarily under the pressure of the Left parties, which were supporting the coalition from outside, was seen as one of the factors instrumental in the re-election of the coalition in 2009.

Also, the reduced budgetary allocation and the backlog of payments, including non-payment of unemployment allowance in several States, among other factors, resulted in the Congress’ debacle in 2014. It was no surprise then that Mani Shankar Aiyar, Congress Member of Parliament, supported the public protest organised by the CPI(M) in New Delhi on November 26 against the dilution of the scheme. His colleague and former Rural Development Minister Jairam Ramesh demanded clarifications from the Union Minister on the move to restrict the number of blocks for coverage. The other parties which criticised the government were the Janata Dal (United), the TMC and the Dravida Munnetra Kazhagam.

Unrelenting government

The Ministry for Rural Development, first under Nitin Gadkari and now under Birender Singh, is in no mood to relent. The government is convinced that over the years the MGNREGS has effectively blocked the procurement and use of machinery and use of skilled labour for creating assets such as large check dams and minor irrigation dams. The September note selectively mentions a CAG report’s observation that most of the works related to temporary earth fills and levelling of land which were washed out in the rains and were not “objectively measurable”. It also argues that most of the Lok Sabha MPs had either demanded scrapping of the scheme or creating measurable assets.

D. Raja, Rajya Sabha member from the Communist Party of India, denied that there was consensus in the Lok Sabha on this issue.

A circular of the Rural Development Ministry dated July 21, 2014, stated that attention would be paid to backward blocks while conducting the labour budgeting exercise along with the State governments. Budgetary allocation is conventionally decided by the State governments, after consultation with the Centre, as the MGNREGS is essentially a demand-driven programme.

P. Rajeeve, CPI(M) member in the Rajya Sabha, pointed out that the Intensive Participatory Planning Exercise was launched only in 2,500 blocks, which was much less than the total number of blocks (6,576) classified as backward by the Planning Commission. He said the government calculated the labour budget at Rs.61,200 crore for 2014-15 but the funds allocated were half of that. In 2013-14, the payable unemployment allowance was around Rs.2,923.80 crore but not a single rupee was paid to any worker under this head. Birender Singh refused to give a clear reply to the members’ questions on reduced coverage under the scheme.

Om Parkash Palati, a former office-bearer of the All India Agricultural Workers Union in Hisar district of Haryana, said: “The MGNREGS provides 100 days of work a year and agricultural work is for around three months a year. Now is the time to give employment under the scheme. Agricultural work has ceased. We should get MGNREGS work when agricultural work is not available but the panchayats always release works for the scheme during the harvest and cultivation seasons. That is one reason why there is shortage of labour for agricultural operations as people prefer to take up MGNREGS works as it guarantees wages and their self-respect. In the lean agricultural months, we do not actually get any work. That is the time when they should release work under the scheme. The worker is sitting idle now. The poor seek work all year round. They would like to do both normal agricultural work as well as MGNREGS work. It is not true that there is a labour shortage for work.”

He said the panchayat could sanction pucca work (long-term assets) such as planting and grooming of trees all through the year. “It is environment friendly too and people can be employed for longer durations. Other works that could be considered are laying of village roads and cleaning of canals, works that are required to be done on a regular basis. But panchayats use machines to lay roads and dredge canals, and that is the reason for unemployment. We get beaten up for demanding to know what works had been sanctioned,” he said.

According to him, one Dilbagh was beaten up at Mojahadpur village in Hansi tehsil for making an application under the Right to Information Act demanding to know what works were sanctioned by the village panchayat.

There is a great demand for work even in the so-called better-off States. Clearly, MGNREGS works may not have had a spectacular effect on the lives of the rural people but they have had several positive outcomes, one of them being guaranteed wage work and a degree of reduced dependence on the landed. At the time of the enactment of the MGNREGA, the Left parties had demanded an employment guarantee scheme for the urban poor. Ironically, even the scheme for the rural poor seems to be under threat.