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It was in February 2006, that Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was for the first time notified on an experimental basis in 200 odd districts across the country – exactly 10 years ago.
The event marked a watershed in the right-based entitlement framework of the country and for the first time provided a legal guarantee for wage employment.
The Act, guaranteed a minimum 100 days of employment out of the 365 days in a year to every willing household, within 15 days of making such a requisition.
Inability to provide employment within 15 days from the date had to be compensated through an unemployment allowance.
The wages as notified by the Central government indexed to CPI was to be done on a weekly basis and not beyond a fortnight in any case.
The provisions made NREGA one of the best wages for work programme for rural poor and within no time, its reach was expanded to cover almost the entire country barring few 100 per cent urban centres.
In the initial years, MNREGA was a true game-changer, rural wages started climbing and reports also pointed towards a decline in migration to urban centres.
A NCAER study of 2015 showed that the Act helped in lowering poverty by almost 32 per cent between 2004-05 to 2011-12 and prevented almost 14 million people from falling into poverty.
More than the economic benefit, experts credit the Act along with host of other reasons for helping Congress-lead UPA romp home to victory in the 2009 General Elections for a second-term against much adverse reaction.
In a 2009 article after the UPA victory, social economists Aruna Roy and Nikhil Dey said NREGA had stood on its promise of inclusive growth, right to work and dignity of labour, which has been vindicated by the people’s mandate. All throughout MGNREGA was hailed as a game-changer, one which enabled a rather weak government return back to power with larger number of seats.
But, thereafter, many analysts said the scheme’s performance and its impact on rural economy started waning.
Too much tinkering with the basic structure of the programme and introduction of new concepts and theories into it, started making MGNREGA look like a money guzzling monster.
A slowing Indian economy, faltering job scenario and rising incidents of corruption, made the scheme look like a villain.
A 2013 CAG report further nailed the scheme. It showed that from 2009-10 to 2011-12, only 20 per cent of total funds allocated under the scheme has been released for Bihar, Maharashtra and Uttar Pradesh where almost almost 46 per cent of India’s rural poor reside.
In other words, the auditor’s report showed that the scheme was faltering in those very states where it was needed the most.
CAG found rampant corruption and swindling of public funds.
Inadmissible works amounting to around Rs 2,252 crore were undertaken under Mahatma Gandhi NREGA that included construction of earthen roads, bathing ghats, raised platforms for cattle etc during the same period.
The scheme’s claim of improving rural wages also came under a cloud.
A study by then chairman of Commission for Agriculture Costs and Prices (CACP), Ashok Gulati showed that though real farm wages rose by almost 6.8 per cent per annum from 2006-07 onwards, the impact of growth variables like overall GDP, agriculture GDP and construction GDP was almost 4-6 times higher than the MGNREGA.
In other words, Gulati’s analysis clearly showed that unlike popular perception, MGNREGA was not the reason for growth in rural wages.
The number of person-days employed went down to historic lows and wage arrears started mounting, forcing many MGNREGA workers to commit suicide. Clearly, MGNREGA was not going anywhere and a fresh approach was needed.
The new NDA government was also not a big advocate of the scheme in the initial days. Prime Minister Narendra Modi, infact in one of his address to the Parliament had very categorically said that he would keep the Act alive to showcase it as a monument of Congress incompetence.
The NDA government also tried unsuccessfully to limit the scheme’s coverage to few extremely poor districts.
But, then came two consecutive droughts; interspersed with a historic low in farm prices due to slump in the global commodities market.
Farm sector, which till that time was showing signs of maintaining a steady growth trajectory over a significantly longer duration of time, started to falter.
In 2014-15, India’s agriculture gross value added (GVA) dipped to -0.2 per cent and achieving an average annual growth of 4 per cent during the 12th five-year plan period (2012-13 to 2016-17) looked a distant dream.
This forced a worried NDA government to revert back to the old UPA scheme of MGNREGA to bailout out rural India.
The scheme’s ground work and reach among the rural labour was considered to be an apt mechanism to remove rural distress.
For the 2015-16, Union Budget, Finance Minister Arun Jaitley, allocated Rs 34,699 crore to the scheme and further topped it up with Rs 7,000 crore in the Monsoon Session through supplementary demand for grants, taking the total allocation for the year upto Rs 41,699 crore, the highest ever for any year and higher than the previous fiscal year’s revised estimates by around 26 per cent
MGNREGA’s performance also started looking up and in 2015-16, the person day generation is the highest in the second quarter (45.88 crore) and third quarter (46.10 crore) than it has been in the last five years.
In the coming Union Budget too, there are full indications that MGNREGA’s allocation would be further enhanced.
Its marriage with irrigation schemes has been formalized and now the Centre wants to construct 0.5 million farm ponds and dugwells and 1 million vermicompost pits every year in the rural areas through MGNREGA.
The scheme’s convergence with related programmes in the department of agriculture, irrigation, animal husbandry and even road transport is being planned.
The delay in wage transfers have come down. Infact, Centre claims that it now transfers funds to state governments within 48 hours of generation of FTO (Fund Transfer Order). Earlier, this took more than a month and of the 9.73 crore active MGNREGA workers, 5.53 crore have Aadhar seeded bank accounts.
“The next stage would be to cut down on the time taken in work done and wages received by the worker,” a senior official remarked.
In all indications, the Modi government has gone all out to adopt MGNREGA, maybe out of compulsion or otherwise, but complaints about the scheme have not yet wiped off.
There are allegations, the NDA government is favouring BJP ruled states more in disbursal of funds, a practice which was it had blamed the UPA of doing during its stint in power.
But, nonetheless, against all odds, MGNREGA is alive and kicking and all set to enter a new decade.
