About MGNREGA ~!
- MGNREGA is the biggest single public works programme in the world.
- It provides employment to around one in every six Indian families, according to the World Bank.
- It completed 10 years this year...!
Why MGNREGA is neither bad politics nor bad economics ?
- It has been a success despite the complaint of leakages, fraud beneficiaries, lop-sided implementation, poor targeting and the allegation that it has distorted the wage structure in rural areas and made agriculture expensive.
- The critics would like to ignore the fact that it has improved the purchasing power in rural households and this impacted their quality of life.
- The best aspect of it is it has been an effective bulwark against the general mood of hopelessness among the poor in times of economic distress.
Some Success models of MGNREGA !
- Bundi (Rajasthan) in the Chambal river area, is a well-watered district in an otherwise water-scarce state. A pre-existing canal irrigation system had been lying in disrepair as bushes and silt had not been cleared for years. Each year, water disputes between upper and lower villages led to the deployment of police pickets. The MGNREGA has been used for the maintenance of the canals, ensuring better water supplies to farmers and fewer disputes.
- In the Sundarbans, there were three interesting categories of mud works. One, building embankments to prevent high tide and flood waters from inundating habitations. Two, flood protection works, and three, for the longer term, the MGNREGA is being used for mangrove forest rejuvenation to reduce erosion. Protecting mangrove forests has positive spin-offs for environmental issues as well. These are examples of mud works with no material expenditure. The MGNREGA allows up to 40 per cent of total expenditure on material.
- Fish farm ponds are examples of works with material costs. In several states (including Chhattisgarh, Tamil Nadu and Tripura), working with the fisheries department, fingerlings have been introduced into MGNREGA ponds.
- MGNREGA workers in Maharashtra have “replaced scrublands with forests, built earthen structures for impounding water and preventing soil erosion, cleared lands and levelled them to make them cultivable”, among other activities
Pessimistic view !
Is MGNREGA the only way out ?
The main challenge that the scheme sets out for itself is clearly to provide livelihood security to rural households. There are two questions that defenders of the rural jobs scheme need to answer.
- First, is there indeed greater livelihood security in the villages 10 years on?
- Second, wouldn’t direct income support through cash transfers be a better way to reach the goal?
Successive governments have spent an estimated Rs.3.1 trillion on MGNREGA schemes over the past decade. This is not a small sum of money, especially if spending in past years were to be converted to current prices to take care of inflation. The impact of such spending would have been far higher if the money had been used for rural infrastructure that would have raised productivity as well as helped the structural transformation of the rural economy.
One part of the sorry tryst with high inflation is that MGNREGA pushed up rural wages without having much of an impact on rural productivity. Basic economic reasoning tells us that inflation accelerates whenever nominal wages rise faster than productivity. It is also well known that inflation hits the poor the hardest. Paradoxically, the delinking of rural wages from productivity acted as an incentive for farmers to replace men with machines.
As B.R. Ambedkar pointed out nearly a hundred years ago, the real solution to rural distress is to be found in rapid industrialization as well as urbanization. The entitlements strategy of the United Progressive Alliance was supposed to provide a permanent cure to the sort of rural distress that India is currently battling. MGNREGA should be judged in terms of what it set out to do rather than its unintended consequences.
What has new MODI Government done to REFORM MGNREGA ?
- In order to prevent leakages in the flagship rural job programme, all wage payments to MGNREGA workers will be made through Direct Benefit Transfer to bank accounts of the beneficiaries from April this year.
- Currently, 94 per cent of the wage payments are directly deposited in the account of beneficiaries.
- For smooth fund flow, the electronic Fund Management System (e-FMS) has been made mandatory from April 1 this year.
- Among the reforms responsible for revival of MGNREGA are
1. timely release of funds to states to provide work on demand.
2. an electronic fund management system.
3. consistent coordination between banks and post offices.
4. monitoring of pendency of payments.
- Ministry will also aim to train and place 10,000 Barefoot Technicians from worker households and through Project LIFE, skill and train workers for wages, for self-employment and livelihood upgradation.
What MGNREGA lacks ?
It is essentially RURAL centric and conveniently ignored URBAN !
Why we want MGNREGA to take care of URBAN ?
- It is imperative now that the government expands it to urban areas, if not in the exact form maybe in some other.
- As it goes ahead with encouraging businesses of all sizes and tries to be business-friendly through drastic changes in labour laws, we are going to see a lot of job instability.
- There will be more jobs but all disposable. Employees will be at the mercy of the employer and given that only 10 percent of new ventures become a success chances are there will be a lot of temporary, insecure jobs.
- There will be too many job-seekers in the market with no bargaining power with their prospective employers. The older and the higher paid you are, the great are the chances of you staying unemployed for a longer time.
What questions arise in such a situation ?
- Where does the new scenario land you if you are 35 plus with the responsibility of a family and otherwise?
- Who takes care of you in the period you are jobless?
The cheer-leaders of start-ups rarely and labour law changes hardly see things from the employees’ perspective. They also discount the fact that courts are not really an option for them. It’s always an unequal fight.
Here is where we want the GOVERNMENT to intervene !
A safety net for the period is what the government can come up with. It is possible only when the employees’ perspective is built into policy. Why cannot the government apply itself to something akin to NREGA for the jobless youth? Of course, it would require a lot of money but it’s always politically wise to not have too many ready-to-revolt young people around.