A scheme for change

Ten years on, MGNREGA requires constant review. And consistency in political support

Written by Jairam Ramesh , Neelakshi Mann | Updated: February 2, 2016 12:28 am
MGNREGA, MGNREGA scheme, MGNREGA policy, MGNREGA news, What is MGNREGA, MGNREGA policy results, MGNREGA scheme results, opinions, indian express The main arguments against the MGNREGA have been that it is full of leakages and that it is a dole that has not resulted in any assets.

Today is the 10th anniversary of the launch of the MGNREGA. This legislation was pathbreaking in its scale, architecture and thrust. Its demand-based legal framework promised an open-ended budget for implementation, unlike all other allocation-driven social sector schemes. The MGNREGA appealed to the left, provoked the right and stayed central to the development discourse. As it completes 10 years, a longer lifespan than most rural development schemes, it is an opportune moment to answer three key questions: First, has the MGNREGA worked? Second, what is happening with it today? And third, do we still need the act?

We can evaluate the MGNREGA’s performance in two ways: By asking whether the act has enhanced livelihood security, and whether it has served as an instrument for rural empowerment. Every year, the MGNREGA provides 40-45 days of employment to a fourth of rural households. Further, seasonality trends indicate that the employment is supplementary and sustains households during periods when non-MGNREGA work opportunities are few. These figures validate its role in enhancing rural incomes.

But the verdict on rural empowerment is divided because of the act’s uneven implementation across states. There are, however, clear successes — for instance, the increase and reversal of a six-year-long period of stagnation in rural wages. Even its worst critics would concede that the MGNREGA’s provisions like work within five kilometres of home, equal wages, etc, have provided greater work opportunities for women and improved gender parity. The participation rate of women has remained around 50 per cent. In the absence of the MGNREGA, these women would have remained either unemployed or underemployed. There is also strong data to suggest that the legislation has reduced distress migration in traditionally migration-intensive areas. The MGNREGA has often been referred to as an ecological act that changed the rural landscape and renewed the natural resource base through its focus on water-conservation works. On the act’s impact on poverty, the findings are less categorical. Though a recent panel survey by the NCAER suggests that the MGNREGA has reduced poverty among Adivasis and Dalits by 28 and 38 per cent, respectively.

The evolution of the MGNREGA has also triggered institutional changes beyond its intended benefits. For example, between 2008 and 2014, more than 10 crore no-frills bank and post office accounts were opened and 80 per cent of wages were paid through these. This was unprecedented financial inclusion in the true sense since it ensured regular use of these accounts while reducing corruption and leakages.

So where does the MGNREGA stand today? After being described as a monumental failure, the answer to that question is apparent. With rising MGNREGA minimum wages and an artificially capped budget, demand has been plummeting. Total person-days of employment dipped to 166 crore in 2014-15 as compared to 220 crore in 2013-14. There has also been a 40-per cent delay in wage payments in the current year. Overall, the government’s policy on the MGNREGA has been wavering. In 2014-15, there was also an attempt to change the wage-material ratio from the current 60:40 to 51:49. The idea was to change the labour-intensive nature of the scheme, which would have diluted the objective of the act. Though the Centre went back on this suggestion, fund allocation continued to be unpredictable. This year, the states are starved of funds and are unable to open new works and pay wages — as of January 2016, 14 states were showing a negative fund balance. The change in government has taken away a key ingredient that contributed to the success of the MGNREGA: Political will and belief in the act.

The main arguments against the MGNREGA have been that it is full of leakages and that it is a dole that has not resulted in any assets. Both these are vastly exaggerated and founded on intellectual laziness and ideological blinkers. The MGNREGA certainly does not exist in a silo and there is no denying that it faces similar challenges on corruption as other development schemes. Corruption needs to be dealt with harshly, but cutting funds to development programmes is definitely not a plausible solution. The MGNREGA has been fighting corruption through the use of IT and community-based accountability mechanisms like social audits. It is, in fact, one of the few schemes that has digitised almost all information and made this database publicly available. Concerns on the durability and utility of assets were addressed by adding new permissible works in 2013. As a result, 50 per cent of MGNREGA works relate to productive rural infrastructure, including toilets, and 23 per cent relate to building assets for marginalised communities.

Finally, a judgement on the need for the MGNREGA should make a distinction between the soundness and value of the act and the bottlenecks in implementation. In other words, poor implementation in some states/ districts or, for that matter, incidents of corruption, are not a statement on the need or utility of the act. Of course, they point to the need to strengthen service delivery, improve access and governance structures.

While assessing the MGNREGA, we must consider that it has been the singlemost important instrument for empowering gram panchayats (GPs). The act gave gram sabhas the mandate to plan their own works and untied funds to execute these works, half of which have to be executed by GPs. No other scheme has placed funds at this scale (Rs 15 lakh per year on average) directly with GPs.
That said, programmes do need constant review and evaluation. For one, the MGNREGA should have an intensified focus on marginalised communities in the most backward blocks and on skill development of households that have completed 100 days (about 8 per cent of the total). In addition, the act should immediately be linked with the Socio-Economic Caste Census to ensure better targeting. It is also time to review the basis for determining wage rates. But most of all, what the MGNREGA requires is consistency in political support. What it does not need is slow strangulation, which is the approach of the Modi government.

Mann is a former consultant with the ministry of rural development. Ramesh is a Congress Rajya Sabha MP and former Union rural development minister

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First Published on: February 2, 2016 12:09 am
  1. O
    OneChan
    Feb 1, 2016 at 10:16 pm
    Thank you Jayaramji for such an unbiased analysis of MGNREGA.
    Reply
    1. S
      Sirius
      Feb 2, 2016 at 12:14 pm
      Despite its claimed advantages, MNREGA's shortcomings have been decline in skilling of workforce, disproportionate rise in rural labor wages , wasteful expenditure in unproductive tasks . In my opinion, they will cost the economy very heavily in near future ....
      Reply
      1. H
        Haradhan Mandal
        Feb 2, 2016 at 9:18 am
        People who are/were against it, made/make taunting and abusive comments against MGNREGA are primarily from middle and upper cl and upper caste. And the beneficiaries were the rural poor (agricultural labor primarily who keeps migrating to city as cheap construction labor or as domestic servants or 'women and girl trafficking'.) "NCAER suggests that the MGNREGA has reduced poverty among Adivasis and Dalits by 28 and 38 per cent, respectively.". AND IT is not difficult to see why there is an opposition to the MGNREGA from this section from the start. In fact - all kinds of 'imaginative' objections/facts were raised against it. On the contrary - many recent studies have shown the positive effect of MGNREGA on improving many HDI parameters in this potion. As Mr Ramesh points out, it was targeted mainly to supplement their income/subsistence during distress period of summer month and at the same time tackle the water conservancy/water shed program - which have helped in many TRADITIONALLY DROUGHT (and NON-irrigated) areas to RAISE the water table.
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        1. K
          K SHESHU
          Feb 2, 2016 at 10:46 am
          This is one of the better schemes formulated by the government. But its implementation needs political will. There is no wrong if the programmes of former governments are refindd and carried forward instead of deriding the former governments for non-performance.
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          1. T
            toku thomas
            Feb 3, 2016 at 12:54 pm
            This all are government policy for clutching of vote not for favour mercy of poor ,dalit labors or rural development .if the schem is intention for rural development they should directly credited to a labors account not just upper to middle clss chain system.atlast then labors are recieving less payment then work done.
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            1. D
              dmwn
              Feb 2, 2016 at 8:41 am
              Brilliant piece ! But it is of no use because its like talking sense to a moron. This Govt headed by a megalomaniac is filled with a bunch of jokers who do not know if they are coming or going. Look at the state of economy despite serious fall in crude prices. These clowns in the govt. just do not have a clue of what to do and how to govern. Raving and ranting about non issues and foisting hard their ideology on everyone, which does no good to the nation is by far their most important occupation. This country is going to suffer and no matter what you try to explain sense to these imbeciles, it will not make a difference. MNREGA was a landmark initiative, a scheme with a great deal of thought gone into it. Bhains ke aagey been bajaane se kya hoga ?
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              1. H
                Hari Hari
                Feb 2, 2016 at 8:42 am
                The greatest turncoat of all writes about the impact of dole as opposed to impact of value creation. I always wonder what converted this free market 'chanakya' into a Jean Dreze type do good by handing dole mother teresa clone. If only the energy and thought that went into this inefficient scheme were put on something like crop insurance or guaranteed minimum 'income' for agricultural produce.
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                1. I
                  i
                  Feb 2, 2016 at 6:26 pm
                  The you have law and order problem...not employment problem
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                  1. I
                    indian
                    Feb 3, 2016 at 9:01 am
                    Cong was not voted out by rural India, but by urban India - pls check the figures.
                    Reply
                    1. J
                      Java.id
                      Feb 2, 2016 at 3:27 am
                      Yes, it's a scheme for change all right: small change in the pockets the intended poor beneficiaries, while the big notes go to the officials and politicians - always the real beneficiaries of these harebrained populist schemes. It's a badly thought out scheme which no sane economist would have introduced without ensuring thorough controls and clearly defined outcomes.
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                      1. J
                        Java.id
                        Feb 3, 2016 at 6:46 am
                        OneChan, we Indians are simple minded and have a problem understanding sarcasm.
                        Reply
                        1. J
                          Java.id
                          Feb 3, 2016 at 7:14 am
                          They have already cost the economy heavily by fueling the galloping Inflation starting FY 09 when this scheme took off.
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                          1. J
                            jagar
                            Feb 2, 2016 at 9:04 am
                            Depends on how State Govts implement it.It has created tangible ets in Rajasthan and Odisha,while others have frittered it away.Systemic checks do exist.
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                            1. J
                              jagar
                              Feb 2, 2016 at 9:00 am
                              You are obviously cut off from rural realitysurance is outright loot there with Production norms kept low.How can you guarantee minimum income? You may have MSP WHICH THIS gOVT. HAS HARDLY INCREASED DESPITE COSTS GOING UP STEEPLY.
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                              1. R
                                rahul mayank
                                Feb 3, 2016 at 5:50 am
                                What poverty has to do with cast here ??
                                Reply
                                1. K
                                  Kirit
                                  Feb 2, 2016 at 2:28 pm
                                  Freeload is main idea in this scheme. When India is going to learn that India needs infrastructure and Indis should spend money to employ people to do real work instead of hands out. People are looking for job not hands out.
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                                  1. M
                                    MS
                                    Feb 2, 2016 at 4:56 am
                                    MNREGA; lacks logic, Stage for rampant corruption, utter failure atleast in UP. So mr Natwarlal stop bragging about your schemes. Get acquainted with the ground reality. And i would like to ask IE, what is wring with you guys ? Your opinion page seems to have been published in congress HQs.
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                                    1. R
                                      Rajaram V.V.
                                      Feb 3, 2016 at 2:34 am
                                      Per se, this programme is aa good initiative, but the vision and mission are missing. If you take income to poor alone as the vision, it is a good program. But look at the value addition, it a big zero, people are engaged in deweeding continuously in stead of preventing weeding. For this the government has support the panchayats with finance. This is not done, left to the state government who use the revenues on such schemes that can fetch them votes. Progr
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                                        rkannan
                                        Feb 2, 2016 at 6:09 am
                                        It is strange that Congress leaders cannot look beyond the same kind of solutions that have failed the nation. Why not give money directly to beneficiaries ? The main purpose of such schemes is to encourage corruption and not poor livelihood improvement.
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                                        1. S
                                          sk
                                          Feb 2, 2016 at 7:10 pm
                                          I am more concerned about the output it has achieved, we are a country with limited resources which should be wisely invested to build growth rather than just spending hard earned tax payers money
                                          Reply
                                          1. S
                                            sk
                                            Feb 2, 2016 at 2:41 am
                                            MNREGA is leftist obsession which lacks logic, it can be a temporary program to address rural distress during droughts etc but not a permanent scheme, it is more of a pension policy which aims at spending funds without creating ets which number of audits have proved
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