While heated debates on the proposed change to MNREGA are on among policy-makers, academics, activists, there has been little movement on any decision on the proposals.
Officials in the Ministry of Rural Development said the Minister of Rural Development Nitin Gadkari's proposal that MGNREGS be restricted to only tribal and poor areas — 2500 blocks of all States — is still under consideration in the PMO. His second proposal that the permissible labour to material ratio of expenses be changed from the current 60:40 to 51:49 is being examined by the Ministry of Finance.
With Mr. Gadkari travelling — first to Maharashtra for the Assembly elections, and to other States related to his other portfolios of Road Transport, Highways and Shipping — there had been no further communication from the Minister on the proposed changes, said officials. Ministry of Finance officials said the proposal was yet to be considered.
Earlier, in October, an internal note from the Minister’s office had criticised the MNREGS in its current form, including how “procurement of machinery through transparent contractual procedures even for large skilled component of works like irrigation canals is not permitted.
“The scheme was allowed to be exploited for purely partisan purposes in states like Andhra Pradesh. It is necessary that the scheme be converted into a popular movement aimed at zero-unemployment in villages, Hamara Gaon Hamara Rozgaar Hamara Vikas! or similar slogans may inspire villages… there may be training or orientation for job seekers... could be linked to skilled development such as training for masonry or electrician,” read the note.
Commenting on the announcements made by the Minister on the proposed changes, officials in the MoRD had, however, pointed out that the Minister’s proposal to increase the limits for spending on material could lead to entry of contractors and corruption, even as it may reduce the availability of funds for spending on wages.
A note by MoRD official on August 3, 2014 had calculated that the proposed changes may shrink the scheme, accessed by the poorest rural population, reducing the person days by 40 per cent from 220 crore person days to 136 crore person days. “By using nearly half the budgetary resources towards material, and restricting fund availability towards wages, central government may have to provide additional resources for wages, which may amount to Rs 20,000 crores,” MoRD officials supervising MNREGS had written.to the Minister after which the proposal was sent to the Ministry of Finance for its consideration.
“The material intensive works demand a higher order of organizational skills brought in only by contractors.. In the past employment schemes, this had led to entry of benami contractors,” noted the MoRD officials. Ministry data shows that in 2013-14, States spent 26.6 per cent of MGNREGS funds on material. In 2012-13, this was 27.7 per cent, much lower than even the current permissible upper limit of 40 percent.
Activists have argued that restricting the MNREGA to only 2500 blocks will alter the character of and kill the MNREGA reducing it from a rights-based Act to a dole-based scheme, and that it is discriminatory to the rural poor across the country.