Parliamentary Standing Committee Questions Huge Cut in MGNREGA Outlays

Parliamentary Standing Committee on Rural Development and Panchayati Raj in its report has expressed concerns over reduction of Rs 29,400 crore in the budget for the Mahatma Gandhi National Rural Guarantee Scheme (MGNREGS)  rural job scheme for financial year 2023-24 when compared to Revised Estimates of 2022-23.

Understanding MGNREGA

• The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 is the foundation for the Mahatma Gandhi National Rural Employment Guarantee Scheme Mahatma Gandhi NREGS) and provides guaranteed employment.
• Demand Based Employment – MGNREGA is bottom-up, people centred, demand-driven, self-selecting and rights-based programme. It provides a legal guarantee for wage employment by providing allowances and compensation both in cases of failure to provide work on demand and delays in payment of wages for work undertaken.
• Involvement of Panchayats – Plans and decisions regarding the nature and choice of works to be undertaken, the order in which each worksite selection etc., are all to be made in open assemblies of the Gram Sabha (GS) and ratified by the Gram Panchayat.    
• Social audit is a new feature of MGNREGA which creates accountability of performance, especially towards immediate stakeholders.  
• The mandate of the MGNREGA is to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
• The core objectives of the MGNREGS are:
• Providing not less than one hundred days of unskilled manual work as a guaranteed employment in a financial year to every household in rural areas as per demand, resulting in creation of productive assets of prescribed quality and durability.
• There is also a provision for additional 50 days of unskilled wage employment in a financial year in drought/natural calamity notified rural areas.
• Strengthening the livelihood resource base of the poor.
• Proactively ensuring social inclusion and
• Strengthening Panchayati Raj Institutions. 

Goals of MGNREGA are

• Social protection for the most vulnerable people living in rural India by guaranteeing wage employment opportunities.
• Enhance livelihood security of the rural poor through generation of wage employment opportunities in works leading to creation of durable assets.
• Rejuvenate natural resource base of rural areas.
• Create a durable and productive rural asset base.
• Empowerment of the socially disadvantaged, especially, women, Scheduled Castes (SCs) and Scheduled Tribes (STs), through the processes of a rights-based legislation.
• Strengthen decentralised, participatory planning through convergence of various anti-poverty and livelihoods initiatives.
• Deepen democracy at the grassroots by strengthening Panchayati Raj Institutions.
• State Government may by notification make rules to carry out the provisions of Act subject to the conditions of consistency with Mahatma Gandhi NREGA and rules made by the Central Government.
• Transfer of Funds – MGNREGA is demand driven wage employment programme and resource transfer from Centre to States is based on the demand for employment in each State.  

Permissible Work under MGNREGA

• Mahatma Gandhi National Rural Employment Guarantee Act allows Central Government to add new works in the permissible list of works under Schedule 1 of the Act.
• As per Schedule 1 of Act, there are 265 permissible works under Mahatma Gandhi NREGA.
• The demand from States to add work in the list of permissible works is examined in consultation with stakeholders.
• Also, the list of permissible works is reviewed annually by a Committee of Central Government having different States as member of the Committee.
• Recently, plantation of Dragon-fruit under horticulture plantation has been permitted under the Scheme against the request from States keeping in view the local requirements and the objective of MGNREGA Act.
• Some of recently added works in the list of permissible works under Mahatma Gandhi NREGA are given below:
• Construction of bio-gas plant for individual
• Unskilled wage component towards the construction of bio-gas plant for community;
• Maintenance of tunnel constructed by Border Road Organisation (BRO); and
• Maintenance of bridges constructed by Border Road Organisation (BRO)

Employment Status under MGNREGA

• Data on Job Employment – The details of households demanded employment and households offered employment under Mahatma Gandhi NREGS in last three financial years 2019-2020, 2020-2021, 2021-2022 and current financial year 2022-23 (as on 31.07.2022) is given below:   

• MGNREGA provided employment during COVID Pandemic – not only to the members of rural household but also to the families which migrated back from the cities due to job loss and lockdown.       
• Demand for work under MGNREGA increased during the Pandemic – Upto 72% more household demanded work in July 2020 as compared to July 2019 and upto 66% more household demanded work in August 2020 as compared to August 2019.
• Significant proportion of women worked under the employment guarantee scheme

Important Highlights of the Standing Committee’s Report

• Important Role Played during COVID – The Report highlighted the important role played by MGNREGA during COVID pandemic it acted as a ray of hope for the needy in times of distress. 
• Increased Outlay during COVID – The importance of the scheme got highlighted through the substantially huge increment at the Revised Estimate stage in 2020-21 and 2021-22 from Rs 61,500 crore to Rs 1,11,500 crore, and Rs 73,000 crore to Rs 99,117.53 crore, respectively, to meet the increase in demand of work during the pandemic.
• The Committee is unable to comprehend the rationale for reduced allocation of funds under MGNREGA and strongly feels that the matter needs to be looked afresh.
• Ministry of Rural Development should Apprise Min. of Finance of Ground Reality – The Committee “strongly” recommended that the Department of Rural Development apprise itself of the still-existing high demand for jobs under MGNREGA at the ground level “more realistically and press upon the Ministry of Finance to increase allocation for MGNREGA.
• Problems in Uploading Attendance – The Committee also highlighted the problems faced by workers on updating their attendance through mobile app twice a day. Digital capturing of attendance of the workers takes place through the National Mobile Monitoring System, a mobile based application.
• MGNREGA beneficiaries belong to extremely deprived sections of the society, and come from different linguistic milieu. It is difficult to expect that MGNREGA workers are well-versed with the functioning and language of the mobile app and depending upon a nodal human intervention for attendance further compounds the problem.
• Delay in Compensation – The Committee further flagged a chronic problem of non-adherence to the provision of delay compensation which has been pointed out by several activists and organisations working in the field.
• Increase Rates under MGNREGA – The committee has recommended that the government should increase wage rates under MGNREGA by linking it to a suitable pricing index and explore the feasibility of notifying a uniform wage rate under MGNREGA for the entire country.

Recommendations of Sixth Common Review Mission (CRM) for MGNREGA

National Level Monitoring, Common Review Mission and Internal Audits are some of the periodic exercises carried out to monitor implementation of MGNREGA at grassroot level. The Ministry of Rural Development in its Sixth Common Review Mission (CRM) has called for decentralisation of the programme to allow greater flexibility in its implementation.

• Need for greater diversification of permissible work under the MGNREGA Act
• Broad categories of work should be listed and flexibility should be given at the ground level to select types of work.
• Job Card needs to be updated for better access and information despite presence of digital records.
• Payments to material vendors need to be done in timely manner.
• Timely and Regular flow of the funds needs to be ensured as effective fund flow is the backbone of any government scheme.
• Option of Revolving Fund may be explored to ensure timely flow of funds. Revolving Fund is a fund or an account that remains available to finance an organization’s continuing operations without any fiscal year limitation.
• There is a need for common vertical and social audit for all schemes of Ministry of Rural Development and Ministry of Panchayati Raj.