A lot of hue and cry going on over the tweaking of labor:material ratio from 60:40 to 51:49 as well as over the overall benefit of MGNREGA the so called ROI.
MGNREGA standing as the Mahatma Gandhi National Rural Employment Guarantee Act was started in 2005 is a demand driven right to work programme to rural India. It aims at ensuring 100 days of productive work to rural households during off agricultural season ensuring a minimum wage. The purpose behind the programme included ensuring a minimum wage rate to agricultural labourers by providing them a bargaining tool, preventing the off season migration from undeveloped rural areas, reducing poverty through wage based empowerment of poor, women empowerment through increased women labor force participation ratio, uplifment of oppressed classes like SC and ST and implicitly increasing literacy level among destitute's children by providing working opportunities to parents. The program is very noble in its objectives and labor:material ratio of 60:40 is in right direction towards labor intensive works to be carried.
Now 9 years after its deployment, time has come to analyze the actual benefits caused by MGNREGA and at what costs. It has been observed that number of days an average worker is provided with work is a meagre 46 days in 2013-14 with a outlay of 33000 crore of INR. Also, the quality of infrastructure built under MGNREGA are of inferior standards. A lot many reasons are there behind this debacle, starting from poor governance in job card distribution, poor coordination among departments over transfer of funds leading to delay in payment of wages, poor coordination among different social sector programmes like PMGSY, MGNREGA, NBA (Nirmal Bharat Abhiyaan transferred to Swachha Bharat Abhiyaan), poor implementation of information, education and communication of programmes among rural people, awareness among PRI over their power in conducting social audits of programme, and mal-functioning grievance redressal mechanism. Another major cause which has been said to be responsible for poor quality of infrastructure is less inclusion of material expenditure. Another ground on which MGNREGA has been criticized is the rising food inflation in India and the blame is on increased rural wages in agriculture (MGNREGA minimum wage has been increased from 67 in 2006-07 to 132 in 2013-14).
Under such reasons, there are talks of scrapping MGNREGA to improve the quality of constructional works being carried out and focus towards infrastructural built up to boost manufacturing.
At this point, we should rather revise the major objectives of MGNREGA and its role in achieving those and then look at the reasons behind its failure. And if those failure can be rooted out in a sustainable and profitable manner or to scrap the programme. MGNREGA achievement has been mixed across the states, while it has been more successful in southern states of Andhra Pradesh and Tamil Nadu who together provided 23% of working hours under MGNREGA using smart card, social audit by panchayats, use of ICT in payment of wages and closing all loopholes and dedicated grievance redressal mechanism. While in poor states like UP, Bihar, Jharkhand, Orissa there are the major leakage in the funds. But the impact is more widespread in these backward states only reducing the migration from the tribal areas of Orissa and Madhya Pradesh with availability of works and high involvement of women (near about 45% ) which has actually been one of its major objective.
Coming to quality of construction, in the rising awareness towards environment and world moving from GDP level of growth to Gross Happiness Index and Happy Planet Index of development, there is need to carry out eco-friendly construction practices and use of natural resources. And this is what has been practiced in many of the rural blocks in rainwater harvesting, irrigation infrastructure and development projects and if it has not been done, professional teams have to be deployed at rural level to achieve this. To the point of MGNREGA causing inflation, it's contribution to inflation is very less with respect to structural causes (protein based diet and low output of pulses and livestock, poor agricultural infrastructure in terms of cold storage and warehousing, increase in MSP under rich farmer lobbying). Anyway inflation is synonymous to decreasing unemployment as per philips curve and if that inflation is coming on the empowerment of poor agricultural labourers, it must be accepted. And efforts should be rather on decreasing structural causes.
The recent govt. initiative for special focus on 2500 backward blocks through enhanced funding and deployment of Cluster based professional teams to assist the panchayats in carrying out productive work in an environmentally friendly manner is in the right direction of streamlining MGNREGA. At the same time, learning is there for poor performing states from states like AP and Tamil Nadu which has shown the way of blocking leakage through use of ICT initiatives. MGNREGA has been a great innovation towards achieving equality in rural society which need to be nurtured rather than scrapped.
MGNREGA standing as the Mahatma Gandhi National Rural Employment Guarantee Act was started in 2005 is a demand driven right to work programme to rural India. It aims at ensuring 100 days of productive work to rural households during off agricultural season ensuring a minimum wage. The purpose behind the programme included ensuring a minimum wage rate to agricultural labourers by providing them a bargaining tool, preventing the off season migration from undeveloped rural areas, reducing poverty through wage based empowerment of poor, women empowerment through increased women labor force participation ratio, uplifment of oppressed classes like SC and ST and implicitly increasing literacy level among destitute's children by providing working opportunities to parents. The program is very noble in its objectives and labor:material ratio of 60:40 is in right direction towards labor intensive works to be carried.
Now 9 years after its deployment, time has come to analyze the actual benefits caused by MGNREGA and at what costs. It has been observed that number of days an average worker is provided with work is a meagre 46 days in 2013-14 with a outlay of 33000 crore of INR. Also, the quality of infrastructure built under MGNREGA are of inferior standards. A lot many reasons are there behind this debacle, starting from poor governance in job card distribution, poor coordination among departments over transfer of funds leading to delay in payment of wages, poor coordination among different social sector programmes like PMGSY, MGNREGA, NBA (Nirmal Bharat Abhiyaan transferred to Swachha Bharat Abhiyaan), poor implementation of information, education and communication of programmes among rural people, awareness among PRI over their power in conducting social audits of programme, and mal-functioning grievance redressal mechanism. Another major cause which has been said to be responsible for poor quality of infrastructure is less inclusion of material expenditure. Another ground on which MGNREGA has been criticized is the rising food inflation in India and the blame is on increased rural wages in agriculture (MGNREGA minimum wage has been increased from 67 in 2006-07 to 132 in 2013-14).
Under such reasons, there are talks of scrapping MGNREGA to improve the quality of constructional works being carried out and focus towards infrastructural built up to boost manufacturing.
At this point, we should rather revise the major objectives of MGNREGA and its role in achieving those and then look at the reasons behind its failure. And if those failure can be rooted out in a sustainable and profitable manner or to scrap the programme. MGNREGA achievement has been mixed across the states, while it has been more successful in southern states of Andhra Pradesh and Tamil Nadu who together provided 23% of working hours under MGNREGA using smart card, social audit by panchayats, use of ICT in payment of wages and closing all loopholes and dedicated grievance redressal mechanism. While in poor states like UP, Bihar, Jharkhand, Orissa there are the major leakage in the funds. But the impact is more widespread in these backward states only reducing the migration from the tribal areas of Orissa and Madhya Pradesh with availability of works and high involvement of women (near about 45% ) which has actually been one of its major objective.
Coming to quality of construction, in the rising awareness towards environment and world moving from GDP level of growth to Gross Happiness Index and Happy Planet Index of development, there is need to carry out eco-friendly construction practices and use of natural resources. And this is what has been practiced in many of the rural blocks in rainwater harvesting, irrigation infrastructure and development projects and if it has not been done, professional teams have to be deployed at rural level to achieve this. To the point of MGNREGA causing inflation, it's contribution to inflation is very less with respect to structural causes (protein based diet and low output of pulses and livestock, poor agricultural infrastructure in terms of cold storage and warehousing, increase in MSP under rich farmer lobbying). Anyway inflation is synonymous to decreasing unemployment as per philips curve and if that inflation is coming on the empowerment of poor agricultural labourers, it must be accepted. And efforts should be rather on decreasing structural causes.
The recent govt. initiative for special focus on 2500 backward blocks through enhanced funding and deployment of Cluster based professional teams to assist the panchayats in carrying out productive work in an environmentally friendly manner is in the right direction of streamlining MGNREGA. At the same time, learning is there for poor performing states from states like AP and Tamil Nadu which has shown the way of blocking leakage through use of ICT initiatives. MGNREGA has been a great innovation towards achieving equality in rural society which need to be nurtured rather than scrapped.
