The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is under pressure from several quarters. One such source of pressure is the rural rich whose concerns were recently voiced by Agriculture Minister Sharad Pawar, when he raised the bogey of shortage of supply of farm workers because of the employment guarantee scheme.
The fact is that the national average for workdays generated under the scheme is less than half of the entitlement of 100 days per household, per year. Even in 2009-2010, a severe drought year, only 54 days of work per household were generated. In 2010-11, this number decreased to around 47 days. Till October this year, the average number of workdays is only 27. Clearly, the scheme cannot be creating a shortage of farm workers with such low levels of employment creation.
Further, the demand for work under the scheme shows clear seasonal fluctuations with a larger demand in off-season months. For example, last year (2010), the national average of workdays generated peaked during the non-agricultural months of May and June at 30.6 crore and 32.8 crore workdays respectively, and plummeted down to 11 crore, 9 crore and 8 crore workdays in the agricultural season months of July, August and September. Since its operation is supposedly demand driven, the workdays reflect the number of households demanding work. Thus whereas 2.26 crore and 2.18 crore households demanded work during May and June, the number came down in July, August and September to 1.4 crore, 98.7 lakh and 83 lakh respectively. Given the wide regional variations in agricultural operations and peak seasons in India, it is true that these figures can be taken only as broad parameters. Nevertheless, they do unequivocally show that work generated through the employment guarantee scheme does not impair the availability of farm labour.
The other bogey raised is that the scheme has put an upward pressure on wage rates in rural India, adversely affecting employers. Landlords and agribusinesses believe that access to cheap labour is their fundamental right. The Arjun Sengupta Commission report on the unorganised sector had assessed that in 2004-2005, 90.7 per cent of agricultural workers and 64.5 per cent of rural workers were paid less than the central minimum wage of Rs 66 a day. While there can be little doubt that the enactment of the rural employment guarantee Act has given an impetus to the revision of minimum wages in many States, the number of workdays is too low to put any significant upward pressure. Moreover, the increases in the minimum wages have been hardly substantial, given that the base rates were so low.
This can be seen from the movement in real wages. The average minimum daily wage rate for all States increased from Rs. 89 in 2009 to Rs. 100 in 2010 (an 11.94 per cent increase) to Rs. 112 in 2011 (an increase of 12.26 per cent). However, the Consumer Price Index for Agricultural Labourers shows an increase ranging over 9 per cent for both 2010 and 2011. So the wage increases were nullified to a large extent by high inflation rates and the real wages of workers under the employment guarantee scheme has remained more or less stagnant.
In addition, workers in many parts of the country are not getting even the specified rate. Wages under the scheme are not time-rated but task-rated — that is, linked to a specific amount of work completed. State governments fix the tasks under a Schedule of Rates (SoRs). In 2008, a committee was set up at the Central level to study the SoRs and their impact on minimum wages. It found wide discrepancies in the SoRs for the same work performed in the eight States it studied — namely West Bengal, Andhra Pradesh, Tamil Nadu, Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh and Gujarat. The committee came to the conclusion that the high out-turns in the SoRs made it difficult for workers to earn the minimum wage. It recommended that there should be a reduction in the tasks and that there should be a central unified SoR for the country based on the different types of soil, already divided into five categories by the Bureau of Indian Standards. It specifically recommended a reduction in the lift and lead norms. This is related to lifting of mud, done mainly by women. It also recommended special task rates for senior citizens and the disabled. The committee submitted its report in March 2009, over two-and-a-half years ago, but its recommendations on SoRs have been ignored by the government, leading to situations where the earned wage is less than what is specified.
Take the example of the eight States mentioned in the 2009 study. According to the figures on the Ministry's website, in only three of the eight States — West Bengal, Uttar Pradesh and Bihar — do the average wage rates for the months from April-October 2011 equal or marginally exceed the official daily wage rate which was revised upwards in January 2011. In the other States, the difference of wages between the official wage and the earned wage is very high. A MGNREGS worker earned on average 24 per cent less than the official rate in Tamil Nadu, 19 per cent less in Andhra Pradesh, 20 per cent less in Rajasthan, 13 per cent less in Gujarat and 3 per cent less in MP.
Therefore, though an upward pressure on real wages should have been a desirable outcome of a well implemented rural employment guarantee programme, this has not happened so far in the case of MGNREGS.
Yet another absurd charge made by the votaries of the neo-liberal order is that the meagre earnings of workers under the scheme is responsible for an increased demand for protein based food items, leading to high inflation rates of food items. Even if a worker worked 50 days a year at a wage of Rs. 120 a day, a family of five members would earn just over Rs 3 per person per day. Hardly enough to set the markets on fire.
The motivated propaganda against the employment guarantee scheme comes at a time when it is clear that it has not realised its potential as an instrument to make a serious dent in chronic unemployment and underemployment in rural India. According to the quinquennial National Sample Surveys, the rural employment growth rate went down by three percentage points between 2004-2005 and 2009-2010. This happened in the years after the MGNREGA was enacted. But instead of concentrating on removing the barriers to its implementation, such as low and delayed wage payments and a rigid list of permissible works, the Centre seems to have other priorities.
Its major obsession today, which is yet another threat to the scheme, is not for its expansion or better implementation but towards a cut in government expenditure so as to bridge its fiscal deficit. The budget allocation in 2011-2012 for the scheme was Rs 100 crore less than the previous year at Rs 40,000 crore. Till October 2011, the Central government had released only around Rs 16,500 crore to the States. The reason cited was that the States have unutilised funds. Far from taking the required steps to help in the better utilisation of funds, the Centre sees this as an opportunity to cut expenditures. The Finance Minister has reportedly instructed his officials to ensure even more stringent conditions for the release of funds. This creates a scenario where the Centre has a stake in the poor implementation of the law.
Unfortunately, the half-hearted implementation of the MGNREGA does not excite even half the attention that a high-profile exchange of letters between the Union Minister for Rural Development and the Chief Minister of Uttar Pradesh on the reported corruption in the scheme, does. Corruption in public work programmes must invite close scrutiny, investigation and punishment to those looting the funds. But it should not become a convenient way to deflect attention from the main problems concerning work, wages and the funds needed to expand and strengthen the scheme.
