India’s founding fathers firmly believed that a government must respect, protect and further the collective aspirations of all Indians, so that it can guarantee fullness of life to each of them. In doing this, it must do everything possible in its power to establish the conditions necessary to actualise socio-economic equitableness. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a programme singularly designed to achieve that goal, and all evidence suggests that it has radically transformed the rural landscape of India in its ten years of existence.
It is a fact that the MGNREGA is widely hailed across the world as a critical lifeline for India’s rural poor, given it provides employment for one out of every four rural households. A testament to its success is that since its inception, the number of households who availed of work increased from 20 million to roughly 50 million in 2013-’14.
An even bigger testimony to its success is that according to an IHDS & University of Maryland study, MGNREGA prevented 14 million persons from sliding into poverty! In fact, because of the programme, poverty among Scheduled Castes (SCs) and Scheduled Tribes (STs) (still the most disadvantaged and marginalised sections of society) reduced by 38% and 28% respectively. This was partly because of the fact that SC/STs constitute between 40-60% of households employed every year, and because 30% of all assets created under the scheme were on their lands.
One of the most important things the MGNREGA has also done is create a healthy wage market. By increasing the range of employment options available, it forced an increase in the daily minimum wage rate, which completely redefined employee-employer relations. Between 1999 and 2004, nominal wages in the rural economy grew at a glacial rate of 2.7%. In stark contrast, because of MGNREGA, average wage increases almost quadrupled to 9.7% between 2006 and 2011.
Consequently, the average wage rate increased from a mere Rs. 65 (2004-’05) to Rs. 162.5 (2013-MGNREGA also ushered in a mass revolution in rural sanitation (much before the photo opportunity called Swachh Bharat was launched). More than 64 lakh toilets were constructed in 2014 alone. Moreover, under the programme, 6.3 crore rural assets were being created every year throughout India, up from 14.51 lakh in 2006-‘07! These have created much needed rural infrastructure that has transformed rural India.
A less publicised aspect of the Act is that 11 crore no frills bank and post office accounts were opened until 2014! Unlike the Jan Dhan yojana, most MGNREGA accounts are still fully operational. Even more importantly, four crore individual accounts were opened in the name of women across the country. This has given them control over resources and provided them with a sense of economic empowerment like never before.
Dismissing the obvious success of the programme (be it in rural development, social justice, women empowerment, poverty eradication and decentralised democracy), the NDA has made concerted efforts to dilute the MGNREGA, and evidence suggests this is solely because it was spearheaded by a Congress government.
Firstly, the programme was glibly caricatured as a wasteful subsidy. In stark contrast to what’s been proselytised, the NREGA costs less than 0.3% of India’s GDP, which is a small cost to pay for supporting and empowering millions of Indians.
Secondly, in trying to limit the scope of the Act, the then Minister for Rural Development announced in September 2014 that the MGNREGA would be restricted to less than 1/3rd of all districts in the country. Then, reportedly after prodding from the PMO, the next Minister of Rural Development said that it would be scrapped entirely, and outstanding wages would not be paid.
The NDA also did not raise the wage rate (until very recently, and that too by a marginal Rs. 08), something which is mandated by policy (wages have to be raised every five years so they are commensurate to inflation and price rise). Even more shockingly, 60% of all wages (over Rs. 11,000 crores) were inordinately delayed because of the NDA’s attitude towards the programme!
Thirdly, completely diluting the people centric nature of the scheme, the NDA proposed increasing the share of material expenditure from 40% to 49%. By increasing the share of expenditure on material, more work would have been done by heavy machinery enabling contractors to corner the lion’s share of MGNREGA allocations. This would consequently have reduced employment, and made the programme redundant.
Realising scrapping the programme entirely would be politically risky, the NDA delayed sanctioning monies to states. Consequently, states could not disburse funds either for wages or asset creation. Even today, 14 states have negative balances because of this myopic (and partisan) approach. This has had severe consequences for the outcomes of the programme. Consider these: In 2013-‘14, over five crore families across India availed of employment under MGNREGA. Because of NDA’s dilutions, this dropped to less than 3.5 crore households.
The idea of MGNREGA is to ensure that households get 100 days of work on demand. In 2013-‘14, 47 lakh households completed 100 days of work (up from 22.36 lakh in 2006-’07). In 2014-’15, less than 25 lakh households completed the full 100 days of work, and last year, this further dropped to less than 17 lakh.
Similarly, roughly 18 lakh SC and ST households completed the full 100 days of work under MGNREGA in 2013-’14. Last year, around seven lakh SC/ST families availed of the full 100 days
These dilutions would not have been possible without the active machinations of the NDA government, whose Prime Minister callously caricatured the MGNREGA as a “living monument of the Congress Party’s failures” (something that none of the families dependent on it would ever label it). It is surprising that a government that came to power on the plank of sabka saath, sabka vikas (a yardstick by which this author, and indeed the whole country hold it accountable) should be so determined to destroy a programme that not only triggered a rural transformation across India leading to a dramatic rise in rural wages, but also created countless community assets critical for agriculture. Given that it has also drastically reduced rural poverty and contained distress migration, any government (even the NDA) should have been committed to continuing the programme, as well
Instead, the NDA has diluted this radical programme of social transformation. Coupled with the ruthless welfare expenditure slashes, and the regressive policies being imposed on farmers, workers and other marginalised sections of society, the NDA and PM Modi seem to have lost their way.
Pandit Nehru once said that “no nation can be great whose people are narrow in thought or in action”. Let us pray our government realises that too.