 "After pause, NDA tries to revive NREGS")
Faced with rural distress amid a bad monsoon, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the Centre is hoping to revive the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS). At a time when the Opposition has been accusing the government of not paying enough attention to rural India, a renewed focus on the job scheme, which had seen a weak performance last year, could help BJP improve its pro-poor outreach.
However, a Business Standard analysis shows, though the government has pumped more money into the scheme, that might not be enough to meet the estimated work demand for this year. Also, despite an increased flow of funds, the actual work provided under the scheme has begun to improve only from the September quarter of this year.
In April-June quarter, the scheme had performed worse than the same quarter of last year. Besides, the scheme seems to have remained vulnerable to political influence - the states ruled by BJP and its allies have been estimated to provide substantially more work to the poor than a year ago. The states that are to go to polls before May 2016 also stand to gain on this count, while the estimated labour work for the Congress-ruled states has been scaled down or stagnated. This trend, however, is not new. The Congress, too, had adopted a similar practice when it was in power, data show. The BJP-led government is trying to revive the scheme with a twin purpose - beating the perception that it was against the scheme earlier, and fuelling demand in rural markets. The rural development ministry, which is implementing NREGS, is also looking to use the scheme database to identify the poor who can be selected for skill upgrade. But the core of the scheme as of now is far from revived.
As of September this year, the ministry released more funds for the scheme than it had done in the corresponding period a year ago. The release of money to states for NREGS increased to Rs 24,828 crore till September this year from Rs 20,513 crore as of the same period last year.
In 2014-15, a substantial tranche of funds was transferred to states in the second half of the year. This late release led to delayed payments to workers and reduced the demand for work under the scheme. This year, the government has already allocated an additional Rs 7,000 crore to the scheme.
But the actual person-days of work in the June quarter fell short of the estimated labour budget and was recorded lower than the work provided in the same period last year. In each of the three months of the June quarter, the work provided in rural India was at least 25 per cent below that in the previous year. The amount of work generated picked up pace in June to match last year's amount. It was only in August that the jobs provided under the scheme rose significantly over last year - by 35 per cent.
Political hues
While the government focuses on providing skills to those who have completed 100 days of work under the scheme in any year, the programme is hobbled by a political trend continuing from the previous government. The Union government tends to estimate higher work generation in states governed either by the political party in power at the Centre or its allies.
This year, the states that are to soon go to Assembly polls also stand to gain more from the possible revival of the scheme. Towards the end of each calendar year, in consultation with states, the rural development ministry projects the number of person-days of work required in the financial year ahead. The ministry maintains its own formula on how the projections are made. Often, the financial allocation to the scheme through the Budget falls way short of funds required if the projected person-days of work are to be actually provided.
This exercise of labour budget allocations, financial allocations and timely release of payments indicate to states how much work they should get generated at the district level. As a result, even though the scheme is technically meant to be demand-driven - the government has to give work whenever people ask for it - the impact of these macro factors is accepted by the rural development ministry as a factor for how many jobs are really created for the poor to earn from. An analysis of government data shows the allocation of person-days in 2015-16 was substantially enhanced over those in 2014-15 for states ruled by BJP, its allies and those states that are going to polls soon. By comparison, the person-day allocation to Congress-ruled states is reduced.
For instance, the labour budget for Chhattisgarh was increased over this period by nearly 100 per cent. The jump was 92.91 per cent for Maharashtra, 50 per cent for Punjab, 32.92 per cent for Jharkhand, 21.62 per cent for Madhya Pradesh, and 8.33 per cent for Jammu & Kashmir. In contrast, Congress-ruled Karnataka's labour budget was reduced by 23.12 per cent, Uttar Pradesh's by 19.12 per cent, Himachal Pradesh's by 6.85 per cent and Uttarakhand's by 5.4 per cent.
Before going out of power in 2014-15, the previous central government had reduced the person-day allocation from those in 2013-14 for BJP-ruled states. When the BJP-led alliance came to power in May last year, the labour budget exercise for 2014-15 had already been completed. The allocation (2014-15), for instance, was trimmed 48.6 per cent for Chhattisgarh, 38.56 per cent for Maharashtra, 23.82 per cent for Jharkhand and 20.21 per cent for Madhya Pradesh. By comparison, the person-day allocation for Congress-ruled states was either enhanced or maintained at the same level as in 2013-14.
This year, the election-bound states of Bihar, West Bengal and Assam have also seen a sharp increase in labour budget allocations. In Bihar, for example, the number of person-days has been set at 93.8 million person-days, 11 per cent higher than the 84.9 million a year ago. In West Bengal, the projection has increased 18 per cent over 188.3 million person-days to 222 million.
Projections vs performance
If poll pundits are to be believed, NREGS was a key factor that brought the Congress-led United Progressive Alliance back to power in 2009. But does that really happen when the projections are different from actual functioning of the scheme on ground? A set of data on how the scheme is actually being followed puts this idea to test.
The actual implementation of the scheme is slipping each year and fails to compare with the person-day projections at the beginning of the year. This is true for 2015-16 as well; despite the enhanced mid-term allocation of Rs 7,000 crore, there is a promise of more funds later in the year and an enhanced 50 person-day option given to drought-hit districts.
In 2014-15, only 1.66 million person-days of work was generated, compared to the approved labour budget of 2.21 million person-days. This year, by mid-September, when half the financial year was over, work equalling 35 per cent of the labour budget had been provided. The average work provided per household was 30.44 per cent and only 461,951 families got 100 days of work. The average days of employment provided in a year has seen a secular decline since 2012-13, though the total work provided dropped substantially in 2014-15, the first year under the present government.
The additional sum of Rs 7,000 crore sought through the supplementary demand for grants will also go towards paying the arrears of Rs 5,260 crore from the previous years' dues.
Even the remaining Rs 1,740 crore of the additional grants added to the earlier budget of Rs 34,699 crore would be insufficient to provide the projected employment to daily wagers across 34 states, where the scheme is currently operational.
According to the revised wage rates and estimated person-days in each state, the Union government needs almost double the amount allocated in the current Budget, or at least Rs 58,000 crore, to provide the projected employment under the Act. This mismatch between the labour budget and the allocated budget is not unique to the BJP-led government; it has only increased every year since 2011.
(With inputs from Archis Mohan and Arup Roychoudhury)
