MGNREGA: the shrinking safety net

29 Sep 2023 6 mins Download PDF

MGNREGA: the shrinking safety net

Why in the news?

The budget estimate of MNREGA dropped from Rs 98,000 crore in FY 2022 to Rs 60,000 crore in 2023, that has led to shrinking of safety net to MGNREGA workers.

MNREGA as a safety net:

1. It has the participation of 26 crore workers under the scheme acting as a key driver of alleviating poverty in rural India.
2. With the unemployment rate hovering around 8%, MNREGA has been pivotal in providing employment opportunities to rural households, especially landless labourers, minorities and women.
3. The Situation Assessment Survey of Farmers highlights that:
   1. 40% of Indian farmers do not consider farming to be their principal source of income.
   2. They disliked farming as a profession.
   3. Farmers wanted to transition from farming to rural non-farm (RNF) jobs to mitigate the risks associated with agriculture.
4. Decline in real wages
   1. Construction sector is acting as one of the major drivers of RNF employment since 2011-12.
   2. The growth rate of real wages in the construction sector between 2014-15 and 2021-22 was less than 1% per year.
   3. The gradual shift in employment from wage labour in the agricultural sector to non-agricultural wage labour in rural areas can be attributed to significant decline in real agricultural wages.
5. Institutional barriers:
   1. MNREGA, which provides regular salaried employment to rural households acts as a choice between starvation and work stability for landless people.
   2. Problems simmering includes:
      1. The number of workdays have gone down from 100 to 31 days
      2. Poor administrative rationing of jobs among job seekers
      3. Delay in wage payments act as institutional barriers for the rural poor.
      4. The roll out of National Monitoring System App to monitor attendance and Aadhaar-based payment system (ABPS) has raised concerns of leaving out beneficiaries, as nearly 11 crore (40 per cent) workers do not possess Aadhaar-linked bank accounts.

About:

MGNREGA:

1. The MGNREGA was passed in 2005 with an aim of enhancing the livelihood security of households in rural areas
2. It is a demand-driven scheme that guarantees 100 days of unskilled work per year upon demand for every rural household.
3. It covers all districts in the country except those with a 100% urban population.
4. If the worker is not provided work within 15 days from the date of demand, he/she has to be given a daily unemployment allowance as compensation.
5. The wages of unskilled workers should be paid within 15 days and in case of a delay, it has to be compensated by the centre.
6. The Economic Survey 2022-23 stipulates that 6.49 crore households have demanded work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and 5.7 crore actually availed it.

7. Achievements of the scheme so far:
   1. Positive impact on income per household, agricultural productivity, and production-related expenditure.
   2. Income diversification
   3. Infusion of resilience into rural livelihoods
   4. Acts as a form of insurance or safety net for the country’s poorest rural households.
   5. Provided a critical lifeline for ~11 crore workers during the covid-19 pandemic.
8. Challenges to its implementation:
   1. PRS Legislative Research: since 2016-17, less than 10% of the households completed 100 days of wage employment on an average.

1. 2. Delay in payment of wages.
   3. Fake job cards
   4. Widespread corruption
   5. Late uploading of muster rolls
   6. Inconsistent payment of unemployment allowance