Dr. Rajiv Kumar

To

Me

Oct 16 at 6:27 PM

Dear Mr. Sagar I am forwarding my article on MNREGA that appeared in the Financial Express this morning. It argues that changes proposed will make the scheme work better and help raise agriculture productivity. Your feedback and response will be truly appreciated. Best regards Rajiv Kumar  Making MGNREGA Deliver Better There is good news about the Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) scheme. Recent press reports reveal that the rural development minister, Nitin Gadkari, has instructed lowering of the mandatory share for unskilled wages in total expenditure from the current 60% to 51%. He has also directed, quite rightly, that 50% of the expenditure be used for enhancing agricultural productivity by improving minor irrigation systems. He has supported the rural development secretary’s recommendation for the scheme to be focused on ‘needy’ districts where, presumably, there is greater incidence of poverty and unemployment rather than be spread across 645 districts as at present. Contrary to the assertions of some bureaucrats and assorted activists like Aruna Roy and economists like Prabhat Patnaik, these are steps in the right direction. In 2013-14, the MGNREGA covered 644 districts, 6,576 blocks, 2.47 lakh gram panchayats and 7.78 lakh villages. As many as 13.3 crore households and 29 crore individuals were registered under the scheme. Thus, one in three persons living in rural India was an MGNREGA job card holder, entitled for a daily wage of R137.3 in 2104-15. This would yield a per capita income of R27 for a rural family of five, barely sufficient, if at all, to cover most basic of needs if the income was available throughout the year. However, the disturbing fact is that, on average, every household covered under the scheme was provided with only 46 days or less than 7 weeks of work during the year! This does not even cover the lean season in most regions of the country, which lasts at least 10 weeks over the summer months. With average annual income of only R6,104.2, from the MGNREGA, households were forced to find other employment to sustain themselves. Thus, the MGNREGA is not a substitute to more rapid growth, productivity enhancement and securing quality employment. It is also worth noting that, of the 13.3 crore households covered under the scheme, only 46.6 lakh or 3.5% were provided with 100 days of employment as mandated under the scheme.  Evidently, even with a total annual outlay of nearly R41,000 crore in 2013-14 (of which R38,692 crore came from the Centre), the MGNREGA could not provide assured sustenance or an adequate safety net to rural households. This is a result of the scheme being spread too thinly across the country. Therefore, it will be beneficial to focus it on the ‘more needy’ districts that suffer from chronic or structural unemployment. In these so-called backward districts, the MGNREGA could be used to provide longer periods of employment to larger number of poor and unemployed households.  Over the years, the share of unskilled wages in total expenditure has remained above 70% and has gone up to 77% in 2014-15. This has resulted in virtually all the 84.1 lakh ongoing works being incapable of creating durable fixed assets. A former Planning Commission member’s claim that nine times more assets have been created under the MGNREGA than under the Jawahar Rozgar Yojana (JRY) is more likely a comment on the greater waste under the JRY than proof of productive utilisation under the MGNREGA. In the villages, the scheme has become synonymous with “moving mud from one place to another” or with digging purposeless ditches. This surely represents a sheer waste of resources that could be used to improve physical infrastructure in rural areas, raise water tables by building check dams, deepening the existing water bodies and repairing the ponds and wells, and building community facilities, including the much-needed toilets for girls in government schools.  A majority of newly-elected MPs have strongly demanded better utilisation of MGNREGA resources and for achieving greater convergence and coordination between the MGNREGA and other ongoing schemes in rural areas. I am at a complete loss to understand how anyone could object to a more rational utilisation of these vast outlays and for them to contribute to improving agricultural yields. It is asserted that a larger share for materials and skilled wages will result in higher incidence of benami contractors and, consequently, higher leakages under the MGNREGA. Those who argue on these lines must recognise that the present implementation of the MGNREGA is riven with malpractices and corruption. A large number of beneficiaries exist only on the registers; quite often the beneficiaries are paid a fraction of their dues after long delays while the officials and elected representative pocket the rest. Poor governance is the issue and not the proportion of outlays allocated to materials. To address this, the minister should replicate the very successful example of quality monitoring of projects undertaken under the MGNREGA by civil society organisations as done under the Pradhan Mantri Gram Sadak Yojana.  It is also argued that these changes are against “the spirit of the scheme” and could result in a reduction of up to 40% in job creation. The past record has been that with a minimum stipulation of 60%, the actual share for unskilled wages has been around 75%. It is important to understand that the reduction in the share is an enabling condition and not mandatory. Therefore, there is no  a priori reason that a bias against unskilled labour will be characteristic of the scheme’s implementation going forward. To argue that more productive and efficient utilisation of funds is against the spirit of the scheme is to insist on waste and inefficiency and reeks of bureaucratic inertia.  Finally, it is of course true that the most efficient form of consumption support for the poor is through direct cash transfer to their bank accounts. But there is simply no conflict in using direct cash transfer for MGNREGA wages and, at the same time, ensuring that those who receive these funds are engaged in capacity enhancing projects rather than digging ditches.  Author is a Senior Fellow at the Centre for Policy Research. He is also the Director of Pahle India Foundation and his most recent book is Exploding Aspirations.