Civil society presses for an increase in budgetary allocation for MGNREGA in FY 2020-21

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published Published on Jan 27, 2020   modified Modified on Jan 27, 2020
-Press release by NREGA Sangharsh Morcha dated 27 January, 2020

As the Indian economy continues to languish, the government ignores the advice given by several noted economists, including that of the most recent Nobel winner Abhijit Banerjee, to improve the functioning of the National Rural Employment Guarantee Act (NREGA). The economy is facing blow after blow. India has the highest rates of unemployment in the past 45 years and food inflation hit double digits in November 2019, soaring to a 71 month high. The government's own data has pegged the annual growth rate at 5 percent. Leaving aside the legislative obligation to ensure that NREGA functions well, providing resources to improve NREGA will be helpful for the economy in general. NREGA wages would increase disposable income in rural areas. This inturn will boost demand and increase consumption. However, the BJP government is intentionally ignoring the programme, year after year.

Drying up of funds: As on 17 January 2020, 93 percent of wage payments were pending for the month (please click here to access the screenshot). Every financial year, from the third quarter onwards, the funds for NREGA dry up. As a result, work slows down and delays in wage payments escalate. Every year, about 20 percent of the NREGA budget is used to clear arrears. This cycle keeps continuing and adversely affects workers in the peak NREGA season in the final quarter of the financial year. NREGA Sangharsh Morcha (NSM) has been consistently demanding that budgetary allocation for NREGA should be adequate to meet the legal guarantee of 100 days of work for every rural household demanding work and timely payment of wages.

Delays in wage payments and compensation: While the Ministry of Rural Development (MoRD) claims to have made progress in timely wage payments, large delays in wage payments still plague the programme. A recent article by the then Secretary, MoRD says that 75% of payments are credited in 15 days, but the snapshot above shows that once funds started drying up in October, this ratio would have fallen significantly since then. Additionally, despite calculating delays made by the centre in depositing wages, the delays made by the centre is not added to calculate delay compensation. The centre must fix accountability on the agencies that cause the delays and ensure that workers are compensated for the full duration of the delay in the crediting of wages to their bank account. Kindly check the table below. 

Delayed payment
Stagnating wage rates:
The issue of stagnating wage rates is not new to NREGA. The government's decision to index the wage rate to the Consumer Price Index - Rural (CPI-R) as opposed to the older Consumer Price Index - Agricultural Labourers (CPI-AL) is a welcome move. However, it has made such an announcement many times in the past and has not acted on it. Also, the change in index will lead to a very meagre increase in NREGA wages since they are very low to begin with. The new indexation will be meaningful if the NREGA wages are at least at par with the minimum wages in the states.

Strengthening gram panchayat planning: The Act had envisioned that gram panchayats would be instrumental in planning what work can be undertaken and what kind of assets can be built based on local needs. With the passing of years, the planning of what work should be undertaken is thrust by the centre. There is a need to ensure that the planning process is bottom-up in nature and gram panchayats have a greater say in deciding the nature of assets.

For further information, please write at [email protected] or contact Abhay Kumar (9845371493), AnuradhaTalwar (9433002064), Arundhati Dhuru (9919664444), GangaramPaikra (9977462084), Kamayani Swami (9771950248), Mukesh Nirvasat (9468862200), Neeta Hardikar (9825412387), Nirmala Tammineni (9848930031) or Richa Singh (9452232663) on behalf of NREGA Sangharsh Morcha.


Press release by NREGA Sangharsh Morcha dated 27 January, 2020

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