Move to dilute MGNREGA: From Right to Scheme

Move to dilute MGNREGA: From Right to Scheme

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published Published on Oct 10, 2014   modified Modified on Oct 11, 2014
Documents availed through RTI reveals that the Rural Development minister Shri Nitin Gadkari has ordered to bring drastic changes in the schedule of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which includes changing the labour to material ratio and restricting the implementation of MGNREGA in 1/3rd of backward blocks in India (please click here to access a note on labour-material ratio prepared by People's Action for Employment Guarantee-PAEG).

The MoRD has notified the State Governments that labour to material ratio has to be changed from the existing 60:40 to 51:49 at the district-level so as to encourage durable works. However, as a result of this action total employment will decline to 136 crore person days in 2014-15 from 220 crore person days in 2013-14, displaying a sharp fall of 40%. Nearly, 5 crore households will be adversely affected, predicts Government's own officials.

The attempt to raise the expenditure share on material component in its total NREGA budget does not sound logical since across the country only 27% has been spent on the same despite 40% being the permissible limit. Madhya Pradesh is the only exception, which demanded a rise in the expenditure share on material component.

The online RTI, which was filed by one Siddhartha Sharma from Delhi, has further revealed that in a drought year like this, people's demand for employment will go up, and if the expenditure share on material component is raised (at the cost of wage component), the MoRD will require an additional Rs. 20,000 crore (to meet wage bill) from the Ministry of Finance. If the labour to material ratio is decided at the district-level, it will give enormous power in the hand of district administration at the expense of Gram Panchayats, thus, affecting the process of democratic decentralization.

The recent move will incentivize the entry of benami contractors, anticipated a senior Government official. Social activists believe that the move will discriminate against villages where unemployment and poverty is high. The marginalized and the primitive tribals will die due to hunger and starvation in the absence of this programme (please click here to read a press release by PAEG dated 8 October 2014).

The Government has exhibited apathy towards the proper implementation of MGNREGA across the country although prior to the 16th Lok Sabha election many political parties promised to improve the programme. A letter written to the Director of MGNREGA at MoRD by SM Raju, then Secretary of Rural Development Department in Bihar (dated 28 August 2014) shows that despite the demand for Rs. 1082.40 crore as Central assistance to the State Employment Guarantee Fund, only Rs. 256.40 crore was released. The outstanding liability as on 28 August under the MGNREGA (as per MIS) stood at Rs. 624.16 crore for Bihar (click here for SM Raju's letter).

Prior to Raju, Mihir Kumar Singh, then Commissioner of MGNREGA, Rural Development Department in Bihar wrote to the Director of MGNREGA at MoRD (dated 6 June 2014) that as on 31st March 2014, the state had a pending liability of more than Rs. 500 crore (please click here for MK Singh's letter).

Financial liabilities of all states taken together (on MGNREGA) as on 31 March 2014 was Rs. 5915.8 crore approximately (please click here to access RTI document). States are starved of the necessary funds to run the programme successfully despite Centre-State financial responsibity being clearly stated in the MGNREGA.

Budget analysis done by Centre for Budget and Governance Accountability in its report 'Has the Tide Turned?' shows that under the MGNREGA there were enormous unpaid wages in the year 2013-14, amounting to a sum of Rs. 4,800 crore. An average NREGA worker is delayed wages by an average of 2-3 months. The MoRD's own record shows that upto September 2014 in the current financial year, 56% of the total wages disbursed are delayed.

CBGA's report shows that as compared to the budgetary allocation of Rs. 33,000 crore in 2013-14 for MGNREGA, there has been no significant rise in allocation during 2014-15 (by the NDA). The new FM allocated Rs. 33989 crore for the programme. Given high rate of inflation, and 2014-15 being drought-ridden, trend shows that MGNREGA funding has actually been squeezed.

According to PAEG, MGNREGA funds are arrived at through a detailed participatory process and scientific method. The ‘approved person days as per the labour budget' is 227 crore persondays in 2014-15, which by the MoRD's own calculations amounts to nearly Rs 60,000 crore at the rate of approximately Rs 270 per person day. However the budgetary allocation for financial year 2014-15 is only Rs. 33989 crore, which is nearly half the labour budget proposed by the states. Thus, based on Government's own calculations, the funds allocated to itself is insufficient.

A calculation done by PAEG shows that spending on MGNREGA as a percentage of GDP declined from 0.87% in 2009-10 to 0.59% in 2013-14. Therefore, social activists allege that there has been rationing of funds, despite NREGA being a demand driven law.

The MoRD on the instruction of Prime Minister's Office (PMO) has ordered that the MGNREGA be targeted to backward and tribal blocks. By restricting the Act to 1/3rd of the blocks, the Govt. is trying to convert the MGNREGA into a scheme. Eminent persons are arguing that poverty cannot be defined geographically. Even in rich cities and locations, there exists poverty and unemployment.

An open letter has been written to the Prime Minister of India, opposing the dilution of the Act. The letter has been signed by more than 250 eminent citizens (please click here to access).


Proposed changes to rural job scheme will hit 5 cr households, say activists, The Hindu Business Line, 8 October, 2014 (please click here to access) 

Do not dilute MGNREGA, eminent citizens ask government, Business Standard, 8 October, 2014 (please click here to access) 

Tweaking MGNREGA to cost 5 crore jobs-Iftikhar Gilani, DNA, 9 October, 2014 (please click here to access) 

Rights groups criticise Govt, The Sangai Express, 8 October, 2014 (please click here to access) 

Government rolling back rural job scheme, say activists, Central Chronicle, 8 October, 2014 (please click here to access) 

Babu warns of 40% fall in MGNREGS jobs, but overruled, The Times of India, 9 October, 2014 (please click here to access) 

‘Modi government is diluting MGNREGA', Millennium Post, 9 October, 2014 (please click here to access) 

Job scheme dilute finger at Gadkari, The Telegraph, 9 October, 2014 (please click here to access) 

Changes proposed by Centre weaken MGNREGA, says activist Aruna Roy, The Indian Express, 10 October, 2014 (please click here to access)  

Image Courtesy: MKSS, Rajasthan


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