MGNREGA budget 2021 - more money needed urgently

The MGNREGA scheme has not only run out of budget, but is facing a unique distribution problem too.

MGNREGA budget 2021 - more money needed urgently

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• The story: India's major rural employment scheme MGNREGA ran out of funds halfway through the financial year 2021-22. The supplementary budgetary allocations will not come to the rescue for at least another month when the winter Parliamentary session begins. According to financial statements, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme shows a negative net balance of ₹8,686 crore.
• What it means: Payments for MGNREGA workers as well as material costs will be delayed, unless States dip into their own funds. This is almost akin to the Centre condemning workers to “forced labour” by delaying wage payments at a time of huge economic distress due to the pandemic. Centre is however accusing many States of “artificially creating demand” for work on the ground!
• Nature of MGNREGA: The MGNREGA is a demand driven scheme, guaranteeing 100 days of unskilled work to any rural household that wants it. During 2020's COVID-19 lockdown, the scheme was given its highest budget of ₹1.11 lakh crore and provided a critical lifeline for a record 11 crore workers.

1. The scheme’s 2021-22 budget was set at just ₹73,000 crore, with the Centre arguing that the nationwide lockdown was over and that supplementary budgetary allocations would be available if money ran out.
2. As on October 29, the total expenditure including payments due had already reached ₹79,810 crore, pushing the scheme into the red. Already, 21 States show a negative net balance, with Andhra Pradesh, Tamil Nadu and West Bengal faring the worst.
3. As a result, the poorest and most vulnerable communities who have already been crushed by the pandemic’s impact are now hit badly.
4. The Rural Development Ministry claims that people will continue to get work, and payment will only be made once funds are available. But many States can provide temporary funds out of their own kitty and then once the fund is available, it can be reimbursed [by the Centre. States are resisting as the pandemic has already hampered their tax collections.

• Allegation: Centre feels that the states are making it a "supply led scheme", by asking field authorities to artificially create demand. The nature of the scheme is that once people turn up and demand jobs, then the demand is provided. But activists report the exact opposite. MGNREGA data shows that 13% of households who demanded work under the scheme were not provided work. Many workers are simply turned away by officials when they demand work, without their demand being registered at all.
• A new problem: All workers in the MGNREGA are paid together, with no discrimination. In Ajmer district, it emerged that some got paid faster than others for work done over the last six months. Observers say those from SC/ST [Scheduled Castes and Tribes] got paid within 15-20 days, while those from other communities had to wait two months. This caused a worry that there was some mess-up, and created suspicions and tensions among the villagers.

1. Similar concerns have been raised by grassroots activists and union leaders in a number of States including Jharkhand, West Bengal, Bihar, Karnataka, Telangana and Tamil Nadu after a Central directive to split MGNREGA budget for wage payments along caste lines was issued on March 2.
2. The Social Justice Ministry and several State governments had warned the Rural Develoment Ministry of “dissension”, “backlash” and threats to social harmony in villages being caused by the directive. So, a decision was then taken to go back to a single muster and payment system, and the directive was to be revoked.
3. The category wise (SC, ST and Others) wage payment system, made applicable from this current financial year, was introduced to accurately reflect on the ground flow of funds to various population groups. Its further streamlining was being undertaken.

• SC payments favoured: An analysis of 18 lakh fund transfer order transactions from 10 States between April and September by researchers from LibTech India showed that SC workers in most States were getting paid significantly faster than others. Under the MGNREGA law, once the fund transfer order is approved, the Centre should take no longer than seven days to sign the payment order and credit the bank accounts of workers. The Centre transferred money to 46% of SC workers within the mandated seven days, while 80% got paid within 15 days after FTO approval. However, among non-SC/ST workers, only 26% were paid within seven days, and 51% were paid within 15 days. In Chhattisgarh, it was ST workers who got paid much faster than others. The Social Justice Ministry received complaints from Andhra Pradesh and Telangana that it was payments for SC workers which were being delayed, “creating dissensions in village communities”.
• Casteism issues: Experts say that for years, the MGNREGA workers unions helped remove casteism, as women workers work together, and so start to socialise with each other across communities. But after this order, there is a backlash and divisions were returning. The language was going back from ‘we are fighting for our wages’ to ‘ours versus theirs’. And all this due to a bureaucratic experiment that bungled up.
• EXAM QUESTIONS: (1) Explain the idea behind the MGNREGA scheme. How did it help during the pandemic? (2) Analyse the potential impact of MGNREGA in terms of empowering those on the fringes of the economic mainstream. (3) Why did UPA launch MGNREGA? Why did NDA not scrap it? Explain.

#MGNREGA #workondemand #MORD 

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