Demand getting closer to COVID levels for perennially fund-starved MGNREGA

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act  (MGNREGA) has been shooting up, getting close to the levels last seen during COVID-19 years. In this backdrop, a parliamentary panel chaired by DMK MP Kanimozhi Karunanidhi has raised several questions about the rural employment guarantee scheme.

In a report tabled earlier this week, the panel questioned the meagre budgetary allocation for the scheme for 2023-24, which is just about two-thirds of the demand made by the Ministry of Rural Development for the fiscal. It reiterated its earlier recommendation of increasing the wages paid to workers and bringing about uniformity in how much they are paid per day across the country.

At present, workers earn different wages in different states. In any case, there has been a long pending demand by this panel to increase to 150 the number of days for which employment is guaranteed under the scheme.

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MGNREGA is India’s largest welfare programme, started by the UPA regime, which guarantees 100 days of employment for the rural poor. But data show that not once since 2014 have workers registered under the scheme been offered the entire 100 days of guaranteed work. 

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Demand from households

The average number of days for which any work is offered each year is less than 50. Also, wage payments are routinely delayed. Each year, dues accumulated from the previous fiscal (April-March) are cleared after allocation under the Union Budget is received. Thus, the cycle of unpaid wages and other dues keeps repeating.

The comments of the Kanimozhi-led Parliamentary Standing Committee (PSC), which was examining the action taken on its recommendations made earlier for FY24, come just when demand for work under MGNREGA has shot up in recent months. 

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Government data show that demand for work came from 3.4 crore households in June 2023 and 3.2 crore in May. The rise is staggering when compared to the previous month — nearly 1 crore more households sought work under the scheme in June 2023, compared to April 2023 (2.4 crore). 

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The previous high was 4.47 crore households in June 2021, after the countrywide COVID-19 lockdown the previous year had led to mass migration of people back to their villages. In May 2021, 3.73 crore households had sought work under MGNREGA. The demand seen in May and June of 2023 is rather close to the COVID-19 numbers. Analysts said the spike in demand for work was due to monsoon vagaries and climate change, which severely impacted agricultural income. The numbers for July show a downward trend.

Budget cut

The committee pointed towards the increased demand for funds under MGNREGA for each of the three consecutive years before FY24 and the Rs 98,000 crore demand put forth by the Rural Development Ministry for the current fiscal, against which only Rs 60,000 crore was allocated in the Budget.

The panel has recommended that instead of remaining short of funds for much of the year and then looking forward to more money at the Revised Estimates (RE) stage, the Rural Development Ministry should ensure adequate provision is made for the scheme during the Budget Estimate (BE) stage itself.

As on January 25 this year, the liabilities under MGNREGA (wages and material component) were close to Rs 14,000 crore. Such a large quantum of liabilities hurts the beneficiaries under the scheme but the ministry has not addressed the panel’s queries on this subject at all.

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“Instead of elaborating upon the real cause and remedy to the problem, the effort seems to be solely to pass the buck to the State… The committee finds such a reply evasive in nature and (this) may lead to lopsided implementation of MGNREGA,” it said.

Wage disparity

A worker who seeks work under MGNREGA in Chhattisgarh is paid Rs 204 per day whereas the same work done in Haryana fetches Rs 331 a day. The panel has again sought to know the reasons for such wide disparity in wages for the same work done in different states under the same scheme.

The panel has also pushed for an increase in wages under MGNREGA, asking the rates to be indexed to inflation.