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February 14, 2016

Across the aisle- MGNREGA: Making a meal of words

Parliament is the highest legislative body. The Prime Minister is the Chief Executive of the country. A statement made by the Prime Minister in Parliament must have a certain sanctity and solemnity.

On February 27, 2015, while replying to the debate on the Motion of Thanks to the President’s address, Prime Minister Modi said:
“Sometimes, we are told that we will or we are about to discontinue MGNREGA or have closed down MGNREGA… Most of you believe that I have very good political sense. And that political sense does not allow me to discontinue MGNREGA. I cannot make such a mistake because MGNREGA is a living monument of your failures. After 60 years of Independence, people had to dig pits because of you, therefore it is a biggest example of your failures and I am going to propagate this with all my might. I will tell the world that the pits you are digging point towards your wrongdoings of 60 years.”

Was it a heartless, political taunt thrown at the Congress? Or was it a conclusion arrived at after deliberation and analysis? It is difficult to say, as with most remarks of Prime Minister Modi. There was genuine apprehension that the rural employment guarantee programme would be allowed to wither away and die.

Tried, but failed
The government did try to cut back the programme. They delayed releases of funds, and made it difficult for state governments to respond to the demand for work. Evidence of that was strong: the percentage of payment generated within 15 days dropped from 50 in 2013-14 to 26.85 in 2014-15. The person-days of employment that was generated came down sharply, as will be seen from the following:
2012-13: 230 crore person-days
2013-14: 220 crore
2014-15: 166 crore

Consequently, the number of households that completed 100 days of wage employment dropped from more than 51 lakhs in 2012-13 to 25 lakhs in 2014-15.

The programme that Mr Modi had disparagingly equated with “digging pits” has just completed 10 years. And who was celebrating the occasion with pomp and enthusiasm? The NDA government! The government is all over the media claiming credit for the programme’s success!

The distress situation created by drought this year has meant that the demand for MGNREGA has been huge. The government has even added 50 additional days of employment in drought-affected areas. It seems the government is beginning to see the good in the scheme. Sadly for the government, it cannot simply rename MGNREGA and appropriate credit. MGNREGA is too well-known to be simply renamed.

The positive side…

MGNREGA has served as an important shock absorber for the rural economy. Firstly, it provides an important relief in times of distress and, in that sense, it is automatically counter-cyclical. In times of drought, the demand for work goes up. Secondly, since it works on a self-selection method, there is minimal discretion to choose who gets work. Thirdly, because payment is made directly into bank or post-office accounts, there are fewer leakages in this scheme than in many other welfare schemes. Fourthly, MGNREGA wages have set the floor for wages for casual, manual work — per capita wage in rural India has increased at an average annual rate of 12 per cent over the 10 years up to 2014-15.

The scheme is an important instrument in the larger context of the transformation underway in India. A large number of persons are moving, or have to move, from agriculture to manufacturing or services. Many people first undertake seasonal migration for some time each year before finding opportunities that are more permanent. This means that work must be found back in the village during the months one is without work in urban areas. Besides, for the millions of workers who do not leave the village at all, MGNREGA provides valuable employment during the lean seasons when farm-based employment is low.

…And the negative

However, there are aspects of the scheme that I have questioned from the very beginning. The “works” undertaken are usually deepening of water bodies or cutting the overgrowth on road margins. Important as they are, the panchayat should look at the full menu of “works” that has been expanded to include water conservation, construction and maintenance of irrigation canals, drought-proofing (afforestation), renovation of water bodies, land development, sanitation work, building rural roads, flood control, watershed development, and drinking water. A very wide choice of works has given room for the panchayat (read: the president of the panchayat) to choose the work that is most “popular” and least “demanding”. I think we should adopt the exactly opposite approach: require the panchayat to identify the assets that are badly needed in the village and choose the MGNREGA works from among them.

MGNREGA is not a dole programme — money is given against work. Humongous amounts are spent every year as wages. About 10 crore workers are presently active. We should be able to leverage these to create durable, permanent and useful assets.

MGNREGA was never about “digging pits”; nor is it a “monument to failure”. As Mr Modi has made a meal of his words, the time has come to convert the programme into one that will create “durable assets” and become a “monument to social justice”.