Sunday Anchor

Is the MGNREGA being set up for failure?

The Mahatma Gandhi National Rural Employee Guarantee Scheme (MGNREGA) has generated more rural employment than any other government scheme or private initiative in the history of independent India. At the same time, it has also generated a great deal of controversy over its merits and demerits.

It would be fair to say that the policy establishment in the country right now is not favourably disposed towards the MGNREGA, with the Prime Minister himself branding it a “monument to 60 years of failure.” Its critics have called it wasteful, ineffective, leaky, and argued that it hurts the poor by fuelling inflation. They claim that the assets created by MGNREGA works are of poor quality; that the money would be better spent on skill-development; that promoting economic growth and private investment is the only way to battle rural poverty, etc.

Such a negative view of the MGNREGA enjoys credence in many quarters, especially among the urban middle classes. This is not entirely unexpected given that this is a rural-specific scheme (districts that are 100 % urban are excluded from it) aimed at the extremely poor.

Yet the bad press this programme continues to enjoy is puzzling on two grounds. One, as the world’s largest such jobs programme, there are >innumerable research studies done > on it, and nearly all of them attest to its manifold successes as an > anti-poverty, pro-growth intervention in the rural economy.

Secondly, the MGNREGA debate is woefully — and for a democracy, scandalously — deficient in the voices of the very people who are its targeted beneficiaries. Therefore, for this special feature on the MGNREGA, The Hindu brings you field reports from four different states — Uttar Pradesh, Telengana, Chhattisgarh and Bihar — that document the experiences of those who have actually used the MGNREGA.

The picture that emerges is different from what is conveyed by the scheme’s critics, but consistent with the findings of several field studies, many of which have been endorsed and published by the Union Ministry of Rural Development (MoRD) in a volume titled ‘ > MGNREGA Sameeksha’.

The studies reveal that, far from being a wasteful expenditure, the works under the MGNREGA have helped create rural assets and infrastructure, ranging from anganwadis, toilets for individual households, crematoria, cyclone shelters, and playgrounds for children, to drought-proofing, flood protection and control, water conservation and harvesting, and rural road connectivity.

Contrary to the claim that it distorts the rural economy, the MoRD’s ‘Report to the People on MGNREGA, 2014’ acknowledges that the scheme has actually boosted agricultural productivity through development of wasteland/fallow land, and construction of post-harvest storage facilities and work sheds.

An Indian Institute of Science, Bangalore, > study states that MGNREGA works have “contributed to improved ground water levels, increased water availability for irrigation, increased area irrigated by ground and surface water sources, and increased availability of drinking water for humans and livestock.”

The MoRD report also states that the MGNREGA’s works on regenerating the rural ecosystem has “aided workers in moving from wage employment to sustainable employment.” Further, MGNREGA has been a critical source of income for female-headed households, providing as much as 15 percent of the household income in some states. Plus it has given a fillip to rural entrepreneurship, with households using the supplementary income to start a rural business.

In many states, up to half of the MGNREGA income was spent on food, which improved health and nutrition — a critical factor in a country plagued by malnutrition. And since only the most needy sought work under this Act, it was an accurate self-targeting scheme, with a major proportion of the beneficiaries — much higher than their percentage in the general population — belonging to Scheduled Castes/Scheduled Tribes and other marginalised communities.

A study conducted in Karnataka in 2010-11 revealed that the MGNREGA has also had a multiplier effect on the rural economy, with the additional purchasing power generated from it spent on items produced in the rural economy.

Yet, despite so many positives (all documented in the field studies anthologised by the MoRD and in its Report to the People 2014), prominent voices from across the political spectrum have dismissed the MGNREGA as nothing more than a glorified ditch-digging scheme. Of course, a country like India which accounts for > one-third of the world’s poorest needs a multi-pronged approach to poverty-alleviation. Skills development is necessary for the integration of the rural poor into a modernizing economy. But till date there are no studies which prove that skills development can take place on an empty stomach.

The two biggest complaints against the MGNREGA, however, are ones that are not often aired in public, perhaps because they might show the critic in poor moral light. One, the MGNREGA has altered the power balance between the landless poor and their employers (agricultural landlords, labour contractors), making it less loaded in favour of the latter; two, by raising rural incomes, it has decreased distress migration to the cities, thereby reducing the numbers of the reserve army of labour, and increasing the cost of labour.

The MoRD report cited above says that, thanks to the MGNREGA, “for the first time in nearly 25 years, growth in rural spending outpaced urban consumption in the two years between 2009-10 and 2011-12.” Incidentally, these are also the two golden years of the MGNREGA, when work allocation was prompt and wage delays were minimum.

In other words, if we aside for a moment the currently popular view that there is no class conflict involved in a capitalist market economy, the MGNREGA is a blatantly pro-labour intervention — both in economic and political terms. And it is all the more anomalous for having come into existence in a liberalising economy. So, of course, it has to go.

But given that work under the MGNREGA is a legal right, the state does not have the authority to wind it up. Most beneficiaries of the scheme The Hindu spoke to say that for the past one year, they have had trouble getting work, and getting paid.

Both these claims, if taken at face value, imply that the government is flouting the law, for the MGNREGA requires the state to provide employment (or an unemployment allowance) within 15 days of application, and wages to be paid within a fortnight of work done.

The data shows a clear decline in the work provided under the MGNREGA (see graph). For instance, the number of households that received the legally guaranteed 100 days of work fell from 51.73 lakhs in 2012-13 to 46.73 lakh in 2013-14 (under the UPA), and then dipped sharply to 23.24 lakh in 2014-15 (under the NDA). One explanation for this could be that funds are not being released by the Centre.

If we look at the data on amount sanctioned, it shows a similar steep decline under the NDA government, from Rs. 27,484 crore in 2013-14 to Rs17,074 crores in 2014-15. While the government might argue that this reflects falling demand, testimonies from the field reports indicate that it is the delay in payments that is turning people away from this programme.

MGNREGA is a demand-driven scheme. A widespread denial of work under MGNREGA and endless delays in wage payment would end up killing the demand for work. If that happens, it wouldn’t be long before the program is deemed a failure and wound up for good.

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Printable version | Mar 4, 2021 5:40:30 PM |

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