Date: 30/12/2022

Relevance: GS-3: Resources, Growth, Development and Employment

Key Phrases: Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Inclusive growth, non-profit organization LibTech India, Public Financial Management System (, Jobless growth, MGNREGA, legal Right, guarantee employment.

Why in News?

• Recently, a heated exchange in the Rajya Sabha on the withholding of funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in West Bengal revealed a key implementation issue — wage delays.

Key Highlights

• A report by the non-profit organization LibTech India found that ₹2,744 crore was still due to workers for work done since December 26, 2021.
• The delay in the payment is contrary to what is mentioned in Section 3 of the NREG Act, has resulted in a drop in the number of households working under the scheme in the State — from 77 lakh during the pandemic years to 16 lakh in the current financial year.
• The current number falls short of the 49.25 lakh households which availed the scheme in the last pre-COVID-19 year as well.

What are the reasons given by the Union Government?

• The Union Government suggested that funds have been blocked only in West Bengal for “non-compliance with the directives of the Central government”.
• MGNREGS funds amount to regular misuse in the state.
• However, according to the media reports misuse has reportedly covered only a fraction of the grants suggests that workers are being unduly punished.

Other reasons for Delay:

1. Frequent delays:
   • Wage delays have been a chronic problem with MGNREGS.
   • MGNREGS being a form of insurance for the poorest rural households, was a boon during the pandemic years giving succor not only to such households but also to migrant workers from urban areas as alternative employment.
2. Procedural delays:
   • The delays in funds disbursal to the States were on account of procedural delays and an overhauling of the Public Financial Management System (Finance Ministry).
3. Lack of fund allocation in the beginning of the year:
   • The Union government does not set aside adequate funds at the beginning of the financial year.
   • The misplaced reliance on technocratic approaches has stymied its implementation.
4. Over-reliance on the technology:
   • The Government has now made digital capture of MGNREGS attendance mandatory at work sites.
   • Issues such as the lack of technical support, the necessity to own a smartphone, and workable Internet connections at the sites not having been fully resolved.
5. Inadequate Financing:
   • Phenomenon of SHORTFALL occurs almost every fiscal year.E.g. Fund crunch in 24 States and UTs in 2021.
6. Paucity of funds:
   • Disrupts demand-supply cycle of employment. Lack of funds results in suppression of demand for work and also constraints post covid rural economic recovery.
7. Mandatory provision of disbursement of wages within 15 days is an open failure in almost every state.
   • In addition, no statutory guarantee compensation given for any delay in payment.
   • This has turned the scheme into a supply-based programme and subsequently, workers had begun to lose interest in working under it.
8. Inefficiencies and unholy nexus of PRI with officials create hurdles in proper implementation of scheme e.g., Duplication of Job Cards.

Way Forward

• Timely disbursal of Funds and mandatory compensation in case of any delay
• Regular DATA collection and evidence-based policy decisions to address the existing inefficiencies like duplication of card, unpaid work.
• Use of ICT tools like GIS, Satellite imagery, Geo-tagging etc. for new asset creation.
• Combine minimum wage with CPI-rural for better inflation targeting as recommended by many states.
• A scheme such as MGNREGS needs to evolve while keeping its core idea of a demand-driven work allocation intact. Treating it as a burden will only hurt genuine beneficiaries.

Sources: The Hindu

Mains Question :

Q. Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has very vital role in rural development and women empowerment, but paucity of funds has now become a regular phenomenon in poor implementation of the scheme. Keeping this in mind, suggest some new reforms to make the MGNREGA a steering wheel for rural development and women empowerment. (15 marks).