Poverty & Inequality

Is the proposed restructuring of MNREGA desirable?

  • Blog Post Date 20 October, 2014
  • Perspectives
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The rural development ministry plans to restrict MNREGA to the 200 most backward districts, and reduce the wage component of the total expenditure of the programme. In this article, Ashwini Kulkarni - a member of the National Consortium of Civil Society Organisations working on MNREGA - argues against the proposed changes.

The present government at the centre in India rode high into the office on the plank of ‘Development with Good Governance’. This certainly was a welcome signal to organisations like us working at grassroots who experience, day after day, that good-intentioned social policies get stuck in ill-designed programmes. There is a huge governance deficit in the delivery of social development programmes. Hence, we have been closely following the announcements of the Ministry of Rural Development (MoRD) to look for desirable changes in the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). However, some of the recent developments have left us feeling disenchanted about the development and governances ideas of the government.

MNREGA is for the entire rural, adult population without any criteria for getting employment. As long as one is ready to do hard manual work, one can demand and get work at the notified wage. Since state governments needed to build administrative capacities to respond to the demand (instead of usual ways to provide specific benefits to selected beneficiaries as per the criteria of particular schemes), the programme was unfolded in three phases. The first phase consisted of the most needy, backward 200 districts across the country.

Restricting MNREGA to backward districts

Now there is a move that the programme be scaled back to just these 200 backward districts. This will translate to fewer people/ villages benefitting from the programme, and to a reduction of fund requirement. However, there are serious, multi-dimensional consequences of this decision.

One, the need for MNREGA is the need of all those rural people who have been deprived of public investment in roads, agriculture-related basic infrastructure (example, water bodies, land development, irrigation capabilities, and soil and water conservation treatment structures). It is the need of all rural people that are entirely dependent on kharif (single season) crops and hence, on rains. Education and health services rendered to their regions are abysmal, hence public investment in human capital is lacking. Government funds, which ought to have reached and ‘developed’ these backward regions, were never utilised and hence, the populace is either unemployed or underemployed for a major part of the year. These people need meaningful employment. Otherwise the only option is forced or distress migration, which is obviously not a solution but rather a more dreadful response to an unjust situation. In general, migration of choice may lead to better prospects, but not a move out of the frying pan into the fire. Given this situation, what can the rationale be for restricting the programme to 200 districts? How can any government use districts as the unit of selection, and not blocks or Gram Panchayats or households? If we agree, in principal, that there are people who are in this situation then all those people need MNREGA employment on demand. What is the rationale for providing it to people in some districts and not others? Administrative boundaries do not define poverty and need; demand by the people can be the only restricting factor for the benefits of the programme. MNREGA data clearly shows that the uptake of jobs has been in non-kharif seasons and primarily in non-irrigated and non-industrial regions. If there is agriculture and industrial growth then MNREGA demand will decrease on its own. Hence, restricting it does not make either economic or governance sense.

Second, the identification of targeted beneficiaries has been found to be a problem in the delivery of all other social development programmes. MNREGA addressed this problem creatively by making the programme demand based - whoever is ready to do unskilled manual labour at the notified wage can demand work. This automatically transcends the hurdles and hassles typically involved in becoming a beneficiary of other social programmes. In the case of MNREGA, one may need work in a particular month but may not in the next month. This essentially gives the beneficiary a choice and as a result, there is no fixed beneficiary base of the programme. Typically, natural calamities like drought or heavy rains that directly affect agriculture production influence MNREGA uptake in the affected regions. So it works as a safety net. Otherwise, in such situations, people have to wait for the government to recognise the problem, address it with some scheme and provide relief in due course. We are well aware of what happens to such relief support. . In addition to providing work during stressful periods, MNREGA also enables rebuilding infrastructure that may have been destroyed due to the natural calamity. Again, how can any government decide who needs MNREGA in any particular period? Isn’t it best left to the people to decide?

Third, the proposal to restrict MNREGA to just a few districts can create an administrative nightmare. MNREGA districts might start getting migrants from adjacent districts that are in need of work. This will increase the burden on resources including administrative capabilities of already backward districts.

Reducing share of wage component in total MNREGA expenditure

The other forthcoming policy change that is of significance is the change in ratio of expenditure on labour (unskilled wages) and material components. So far, it has been 60:40; a ratio of 51:49 is being proposed. So for every Rs. 100 spent, the government wants to spend less on unskilled labour for whose benefit the scheme has been formulated. MNREGA is primarily an employment guarantee programme with an equally important objective of creating durable, productive assets for the local communities. Spending less on the wage component for unskilled labour undermines the primary objective with no assurance that it can qualitatively impact the durability and/ or utility of assets produced. Under MNREGA, water bodies have been created that have helped provide irrigation in rain-fed areas, and land development activities have been undertaken to bring more land under cultivation. These are basic requirements for agriculture growth. And these structures do not require more material but more technical input in terms of better designs.

Moreover calculating the ratio at the district level instead of Gram Panchayat level is also problematic. It implies that the material and unskilled wage component may get spent in different regions of the same district. In all likelihood, the politically strong Panchayat Samitis will keep more of the material component, leaving the unskilled wage component for the less politically vocal regions of the district. If so, what happens to the rationale of spending more on material so as to create better assets? How can the government ensure that this is rationally determined?

Keeping the promise

Administration of a massive programme like MNREGA is complex by its very design. Yet it has shown quite a few ‘firsts’ in its implementation with novel accountability and transparency measures. Now the same can be used in all other social development programmes of the government. Yes - there are reports of leakages, siphoning of funds and inefficiencies in administration. But the more important concerns are the delays in wage payments and suppressed/ unrealised demand for work. Addressing these implementation issues is a challenge that we have been grappling with over the years. But the fact that the challenge exists and that it is difficult to address it, should not be a reason for shirking responsibilities. Instead, the response should be to take on the challenges and find ways and means of improving governance of such programmes. This Act was passed by the parliament with support from all political parties. It is a commitment made by the State. And this government has come to power with the catchphrase of ‘Good Governance’. Now is the time to make a breakthrough with better governance practices so as to implement this programme to realise its full potential – and not to scuttle it.

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