• UGI USER
  • Sep 29, 2023
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MGNREGA- Shrinking the safety net

Cuts in MNREGA budget, refusal to acknowledge problems with Aadhaar-based payment system, risk pushing rural workers into extreme poverty.

Relevance

  • GS Paper 2: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • Tags: #MGNREGA #unemployment #Jobgrowth #currentaffairs #upsc

 

Why in the News?

Today Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) stands as a lifeline for millions of rural workers in India. With 26 crore workers enrolled in the program, MNREGA has been instrumental in alleviating poverty in rural areas. However, recent budget cuts and issues with the Aadhaar-based payment system threaten to undermine this vital safety net.

The Budget Conundrum

  • Parliament has questioned the significant reduction in MNREGA’s budget estimate from Rs 98,000 crore in FY 2022 to Rs 60,000 crore in 2023.
  • The government’s response claims that MNREGA is demand-driven, seeking additional funds only when necessary. However, the drastic reduction in funding raises questions about the government’s commitment to supporting rural employment.

MNREGA as a Safety Net

  • The current job market crisis, with an unemployment rate of approximately 8 percent, highlights the importance of MNREGA.
  • It has been a cornerstone in providing employment opportunities for rural households, particularly landless laborers, minorities, and women. It shields them from the abyss of poverty.

Transition to Rural Non-Farm Jobs

  • The Situation Assessment Survey of Farmers indicates that 40 percent of Indian farmers do not consider farming as their primary source of income.
  • Many seek refuge in rural non-farm (RNF) jobs to mitigate the risks associated with agriculture. The construction sector has played a pivotal role in driving RNF employment since 2011-12.

Decline in Real Wages

  • Data from the Centre for Labor Research and Action shows that the real wages in the construction sector grew at less than 1 percent per year between 2014-15 and 2021-22, raising concerns about the quality of jobs in the RNF sector.
  • This transition from agricultural to non-agricultural employment is fueled by the significant decline in real agricultural wages.

Institutional Barriers

  • MNREGA provides regular salaried employment to rural households, acting as a lifeline for landless individuals.
  • However, challenges such as reduced workdays, poor job rationing, and wage payment delays act as institutional barriers for the rural poor.
  • The introduction of the National Monitoring System App and the Aadhaar-based payment system (ABPS) has compounded these issues, despite the fact that 40 percent of workers lack Aadhaar-linked bank accounts.

Union Government’s Denial

  • Regrettably, the Union government has chosen to ignore the problems associated with ABPS. Despite evidence to the contrary, the government claims that no workers have been denied wage payments due to ABPS, asserting that it is immune to technical glitches and misuse.

The Need for Strengthening MNREGA

  • Despite efforts, the mobility of the rural workforce from agriculture to the RNF sector remains limited.
  • Rural households often view RNF casual wage employment as a last resort for survival. To break this cycle of casual wage employment and extreme poverty, it is imperative to strengthen MNREGA. 

Economic Blockade of States

  • MNREGA relies on the synergy between the Union and states. Unfortunately, states governed by non-BJP governments have faced economic penalties from the Union government, creating an economic blockade.
  • West Bengal, for instance, saw its MNREGA funds halted despite full compliance. The Union government owes Bengal a staggering Rs 7,000 crore under MNREGA.

Impact of Fund Embargo

  • Data presented in Parliament illustrates the dire consequences of fund embargoes: person days generated have plummeted to one-twelfth of their previous levels.
  • This unjust withholding of wages victimizes workers and pushes them to the brink of starvation. The state government has been forced to use its budget to fund the scheme, leaving persons with job cards reliant on state government initiatives.

PM Awas Yojana (Grameen)

  • In addition to withholding MNREGA funds, the Union government has withheld over Rs 8,000 crore owed to Bengal under the PM Awas Yojana (Grameen), leaving over a million people without housing benefits.

 

As MNREGA faces budget cuts and issues with the Aadhaar-based payment system, it stands at a crossroads. The program that once served as a vital safety net for millions of rural workers is now under threat. The government must recognize the importance of MNREGA in alleviating poverty and strengthening rural employment. It is time to address these challenges, restore funding to states, and ensure that MNREGA continues to uplift the lives of those in need. Otherwise, we risk pushing rural workers into extreme poverty, contrary to the program’s original mission and intent.

 

What is MGNREGA?

· “Right to Work”: It guarantees the “right to work” to rural citizens of India, ensuring their access to employment opportunities.

·  Minimum Workdays: Under MGNREGA, the government commits to providing a minimum of 100 days of unskilled manual work to an adult member of eligible rural households.

·  Main Objective: The primary goal of MGNREGA is to offer employment to rural citizens, thereby improving their economic conditions.

·  Key Advocates: The initiative was championed by organizations like the Mazdoor Kisan Shakti Sangathan (MKSS), renowned economist Jean Drèze, and others. MKSS’s early efforts laid the groundwork for the creation of MGNREGA.

Key Provisions of MGNREGA

Eligibility Criteria

· Must be a citizen of India.

· Minimum age of 18 at the time of application.

· Belongs to a rural household.

· Willingness to engage in unskilled work.

Guaranteed Employment

· MGNREGA ensures 100 days of unskilled employment to all willing rural citizens.

· Workers are paid at the government-set minimum wage.

Unemployment Allowance

· If work is not assigned within 15 days, applicants are entitled to an unemployment allowance.

· The allowance is 1/4 of the minimum wage for the first 30 days and half for the subsequent period.

Social Audit

· Section 17 of MGNREGA mandates a social audit of all projects carried out under the program.

· Social audits promote community participation, government accountability, and social transformation.

Preference for Local Employment

· Work provided is typically within a 5 km radius of the worker’s village.

· Travel allowances are provided for work located beyond this radius.

Decentralized Planning

· Panchayati Raj Institutions take the lead role in planning, implementing, and monitoring the works.

· Gram Sabhas have the authority to suggest projects and must complete at least half of the work.

Worker Welfare

· Implementing agencies are responsible for ensuring proper working conditions, medical facilities, and compensation for workers.

· Weekly wage payments are mandated, with no delays exceeding 15 days. Compensation is provided for delays.

· Complaints must be addressed within 7 days to ensure worker rights.

· MGNREGA embodies the vision of providing rural citizens with the means to secure employment, improve their livelihoods, and participate actively in local development. It represents a significant step towards eradicating poverty and promoting social justice in rural India.

 

Sources: Indian Express 

Mains Question

Discuss the significance of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in alleviating poverty in rural India, considering its role as a lifeline for millions of rural workers. Analyze the challenges posed by recent budget cuts and issues with the Aadhaar-based payment system, and assess the potential implications for the effectiveness of this crucial safety net program. 250words.