Problems with MGNREGA Scheme

November 9, 2011

Problems with MGNREGA and recasting of the scheme

Discuss the problems of the MNREGA Scheme. Do you think that this is a truly Demand Based Programme? Why this scheme needs an overhaul?

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) came into existence by a legislation by Parliament of India in 2005. It provides legal guarantee for 100 days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work.

The scheme created three billion person-days of work in 2009-10 against 86 million person-days in 2003-04 through other programmes such as food for work.50 million families are likely to get work in 2009-10 with an expenditure of Rs. 40,000 crore.

The positive visible impacts are as follows:

Agricultural wages have increased
Distress migration has shown a decline
Area cultivated in some states has increased
Water conservation structures have been built and in many cases, have been revived.

However, despite all these amazing data, MGNREGA has become one of the most abused programmes, where everybody who is getting the chance to make money is making. There are clear evidences that original objectives of MGNREGA have yet to be achieved on a large scale and its true potential as an instrument of rural transformation is yet to be fully realized.

Most of the jobs created under the Act are in the area of water conservation, land development and drought proofing. While NREGA is implemented by the ministry of rural development, its progress is also monitored by the Planning Commission. A recent Planning Commission evaluation of the National Rural Employment Guarantee Act (NREGA) has questioned the effectiveness of projects implemented under the Act in boosting productivity and creating assets. Planning Commission highlighted the dearth of technical and professional support for implementing projects under NREGA, delays in payments to workers, and issues of corruption and leakages.

Here are some important points:

Planning commission finds poor implementation of the scheme in states such as Bihar and Uttar Pradesh.
Payments to workers are being delayed as there is a late measurement of work.
Only 19% of the 850,000 differently abled people registered for the scheme have got work under NREGA.
Another issue is that of fake muster rolls and bills being generated.
So-called elite groups within the workers capture most of the job cards.
Workers were moving away from their main activity, agriculture, and “are digging pits in the name of ponds under NREGA… Water from these pits evaporates very fast”.
There is corruption in implementing the programmes and no real asset was being created.

Recasting of MGNREGA

Rural Development Minister Jairam Ramesh has recently said that government will recast the Mahatma Gandhi National Rural Employment Guarantee Scheme, to give it a welfare edge, following criticism that it was disconnected from people’s concern over corruption, high food prices and inflation.

Government would make an attempt to make the scheme more responsive to people’s needs and increase earnings of the rural poor.

The reform attempts to make the scheme truly demand-based, besides addressing issues of fraud, misuse of funds, corruption and structural problems like delayed payments.
The issues such as uneven implementation across states and districts need to be addressed.
The effort is clearly to recast itself into a welfare state by reaching out “to the 2000 poorest blocks, especially those with a high Scheduled Caste and Tribe population”.
By focusing the reforms on the poorest areas, the government is seeking to stress that in recasting its welfare component it will not endanger industry’s growth path.
In its document on ‘Reforms in MGNREGA Implementation,’ the Rural Development Ministry has sought to put the legal entitlements of the rural labour at the heart of the programme in keeping with the rural employment guarantee law. It has been suggested that all states index its schedule of rates, or wage rates, to inflation at the beginning of every financial year. This would mean that cost estimates of projects would have to be revised.
The idea is to avoid the current practice where wages are revised downwards when the project cannot be completed within the existing cost rate.

MGNREGA is NOT a truly demand based programme because-though rural labour is legally entitled to be paid if work is not provided within 15 days of application, this happens very rarely. This undermines the demand based nature of the programme. The Government would make it mandatory for all states institute systems to pro-actively seek and record demand for work. This would include efforts at the gram panchayat level to proactively increase recording of demand for work. (747 Words)

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