NREGS capacity to offer work shrinks sharply, data show
Anyone who has seen the eight-year-old Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) at work may presume the programme has come in handy this drought year, when farm work for poor labourers is usually scarce. But the rural job scheme — meant to cushion such bad times — isn’t helping like it used to earlier. Its capacity to offer work has, in fact, shrunk sharplyindia Updated: Oct 11, 2015 01:13 IST
Anyone who has seen the eight-year-old Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) at work may presume the programme has come in handy this drought year, when farm work for poor labourers is usually scarce. But the rural job scheme — meant to cushion such bad times — isn’t helping like it used to earlier. Its capacity to offer work has, in fact, shrunk sharply, data show.
It’s a puzzle analysts are grappling with: India’s most-evaluated social programme is slowing down at a time when it should have grown, potentially worsening a rural crisis.
Launched in 2006, MGNREGS, which offers “employment of last resort” to the extremely poor, has proved to be one of the most important rural interventions by the government. On an average, it has provided some 50 million households with inflation-indexed wage employment.
The programme has also seen “work convergence” to help create durable social assets. For instance, about 20% of MGNREGS work has gone towards road construction while a quarter for water conservation. In 2013-14, construction of toilets accounted for 28% of the work.
But despite a back-to-back drought, the demand for work under MGNREGS has plummeted. This is counter-intuitive, especially since job opportunities aren’t growing in the other major source of income for unskilled labourers: the construction sector. For instance, construction-sector growth slowed to 4.8% in 2014-15 from a peak of 10.8% in 2011-12. In 2012-13, the sector’s growth even declined to minus 4.3%.
The Modi government has announced increasing the number of workdays in drought-hit districts to 150 days from 100. But consider Maharashtra’s Marathwada region, a parched district, where rains were 46% below normal in 2015. There, the number of person-days of work in the key monsoon months of June-August dropped by 28% in 2015 compared to the same period in the previous year, according to government data.
Analysts say a general apathy, cut in spending, and maladministration could be the most likely reasons for such divergences.
“What has happened is that wages have gone up (because it is inflation-indexed). But since the overall budget was not increased, the number of person-days naturally comes down because you can’t expand the programme in such a situation. Moreover, in many states, the MGNREGS wages offered was lower than the state wages. This is an indirect, subtle message to go slow and the kill the programme,” said Prof Himanshu of Jawaharlal Nehru University.
The issue of MGNREGS wage being lower than minimum wage had cropped up in Karnataka for example. The Supreme Court had to pass an order, directing all states to pay MGNREGS wage that is on a par with the state minimum wage Act, after the Centre challenged a similar ruling by the high court.
Data for the last three years (2012-13, 2013-14, 2014-15) show the government was able to provide just 44 days of employment on an average. The MGNREGS law guarantees 100 days employment at a minimum.
Spending on the scheme likewise has fallen 10% in these three years, with a sharp 8% fall in the last fiscal. Total households provided jobs have had a steeper fall, from 49 million households in 2012 to 41 million in 2014-15, a 13% dip.
“My concern is the over-centralisation of the MGNREGS programme and the one-size-fits-all approach run from New Delhi,” says Reetika Khera, who teaches in IIT Delhi and studies the rural sector.
The poorest sections have been hit the hardest, with data showing a 27% decline in person-day jobs availed by Scheduled Tribes.
The number of households availing a full 100-day wage employment in the last fiscal, too, has shrunk by half. In 2013-14, 5.1 million households worked for 100 days, while in 2014-15, only 2.4 million did.
The budget for the scheme, too, has seen a sharp fall, from Rs 40,100 crore in 2010-11 to Rs 33,000 crore in 2013-14. In the last fiscal, the NDA government marginally increased it to Rs 34,000 crore. In the current year, this was raised slightly to Rs 34,699 crore. If funds are available, another Rs 5,000 crore could be added, finance minister Arun Jaitley had announced in his budget.
Why India’s most important poverty alleviation intervention is failing needs to be studied, analysts say.