A week after the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme received a Budget allocation 25% lower than the previous year’s revised estimates, a Parliamentary panel has pulled up the government, noting that Budget estimates for the Centre’s flagship rural jobs scheme have failed to keep up with proven demand for the last four to five years.
“Budgetary Allocation of a scheme of such enormous magnitude should be done in a more pragmatic manner so that there is no dearth of funds in mid-year, and flow of funds for payment of wages, material share, etc. is maintained seamlessly,” said a critical evaluation of the scheme presented to the Lok Sabha on Tuesday.
The Parliamentary Standing Committee on Rural Development spotlighted the failure to pay unemployment allowances and also recommended a hike in wage rates and in the number of days of guaranteed work, and a revision of the 60:40 wage-material ratio under the scheme. The panel, chaired by Shiv Sena MP Prataprao Jadhav, adopted the report at its last meeting on February 4.
Analysing budget allocations since 2018-19, the Committee found that there had been a substantial hike at the revised estimates stage in order to augment the initial sum each year, indicating an increase in demand. “[It is] quite perplexing as to the rationale behind keeping the BE for 2021-22 at ₹73,000 crore, while in the previous financial year the expenditure was to the tune of ₹1,11,170.86 crore,” said the report. It acknowledged that 2020-21 witnessed an unusual surge in demand due to reverse migration, but still emphasised that the “agreed to labour budget” should be made keeping in mind the previous year’s expenditure so there is no dearth of funds during the year.
The 2022-23 budgetary allocation for MGNREGA was maintained at the same ₹73,000 crore level, despite the fact that the previous year’s revised estimates were 25% higher at ₹98,000 crore. The scheme’s financial statement for 2021-22 already shows a negative net balance of ₹15,683 crore.
The Department of Rural Development told the Committee that the “agreed upon labour budget is not final and binding”, but simply facilitates “pragmatic planning”.
The Committee said it was “appalled at the blatant violation of the provision of unemployment allowance”, noting that no money had been paid out in the current year until November 5, while payments for the last two years were only ₹3000 and ₹12,000 in total. The allowance is mandatory for all applicants who are not given work within 15 days of their seeking employment.
The report also slammed the “inordinate delays” in wage payments and urged the Department to “pull up its socks” and take all measures to wipe out the pending wage liabilities of almost ₹2364 crore. “There may be plethora of reasons causing delay in the payment of wages, but none of the reason can be sufficient enough to justify this blatant nonadherence to the statutory provision of the Act,” said the report, adding that compensation for payment delays has dropped to “abysmally low” levels despite ground reports of continuing delays.
The panel urged the government to ensure that a “long pending demand of justifiable hike in wages is fulfilled”, urging a review of the decision not to index MGNREGA wages to the Consumer Price Index-Rural, rather than the lower index for agricultural labourers. It also urged that a unified wage rate be notified across the country to discourage distress migration. The Committee also strongly recommended an increase in the number of guaranteed days of work per household from 100 to 150.