Will the Government Create More Rural Jobs Through MGNREGA?

Tue, 7 Feb Pre-Open

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While Mahatma Gandhi National Rural Employment Guarantee Act, or MGNREGA, is a seminal Indian labour law and social security measure, aimed to guarantee the 'right to work' and enhance livelihood in rural areas, it is a law fraught with issues.

MGNREGA mandates the provision of at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.

Started in February 2006, the pilot began by covering 200 districts, which was extended to all districts in India by April 1, 2008. MGNREGA is meant to create durable assets (such as roads, canals, ponds, wells).

In every fiscal budget, the government allocates funds to this scheme. This year's budget focused heavily on rural spending in an attempt to help the economy recover from the dreaded demonetisation decision, which caused cash shortage. As one of the steps taken to counter this, in budget 2017-18, MGNREGA received its 'highest allocation ever' of Rs 48,000 crores.

But will increasing budgetary allocation for MGNREGA create more jobs? If the National Council of Applied Economic Research (NCAER) is to be believed, only around 2.2 billion person-days (the product of labour and days of work) will be created this fiscal, as against last year's 2.35 billion. This, despite the 'highest-ever' Rs 48,000 crore outlay for this scheme.

Add to this the fact that work is often rationed at the state levels. Despite a legal obligation to provide 100 days of work, fewer job cards and days of work are made available for each worker, because states simply do not have the resources to allocate these jobs. The NCAER report declares that direct rationing affects about 29% of all rural households...more in the northern and central states.

Delayed wage payments, is another issue that people are dealing with. While 50% of jobs were paid within the stipulated 15 days in FY14, only 27% did so a year later. While this number has improved since then, it is nowhere near the 50% mark yet.

If more jobs are to be created, the government must provide adequate funds for the rural work programme to work, says social activist, Aruna Roy. As of now, 22 out of 34 states have negative balances, which makes for a very bad track record.

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