Insufficient funds and untimely payments have made MNREGA weak in the past few years


By Debmalya Nandy*

The Ministry of Rural Development is restricting the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) from attaining it’s full potential, and at the same time dictating it’s implementation by not honouring local knowledge and decision making.

As per the Act, the Gram Sabha has the sole power and responsibilities for the planning of the schemes under MNREGA and the Gram Panchayats are responsible for identification of schemes as per recommendation from the Gram sabhas and Ward sabhas.

As per Section 16(I) of the Act, “The Gram panchayats shall be responsible for identification of projects in the Gram Panchayat area to be taken up under a scheme as per the recommendations of the Gram sabha and Ward sabhas and for executing and supervising such works”. Further Section 16(III) mentions”.

It adds, “Every Gram Panchayat shall, after considering the recommendations of the Gram sabha and the ward sabhas prepare a development plan and maintain a shelf of possible works to be taken up under the scheme as and when demand for work arises.”

While the Act clearly honours local knowledge, wisdom, contextual realities and local decision making, however, its implementation in the last 12 years has been majorly driven by top-bottom processes wherein type of schemes, number of schemes, budget and even the payments and it’s processes being dictated centrally, leading to a gradual dilution of the spirit of the Act, which was originally aimed at strengthening of decentralized governance and empowering local governments.

The basic idea of the Act was to ensure a demand based employment guarantee to the rural households which was done to keep the control of the programme with the people but with flawed implementation strategies and lack of monitoring, local contractors, middle men with help from the local administration and influential elites never allowed the bottom-up processes to establish.

Over and above this, the top administration at the centre has never believed in the idea of power devolution and had run the programme like a construction scheme at the villages, where the workers were seen as mere “tools” for creating assets, by the government. MNREGA has been a story of great labour exploitation and powerlessness for the last 12 years primarily because of the political ignorance and bureaucratic mismanagement.

The budget capping has been constantly restricting the scope of MNREGA in the rural areas. Currently there are about 12 crore MNREGA job card holders out of which 7.5 crore are termed as active job cards by the government (a job card, which has at least one day registered as work done in the last three financial years, including the current one, is termed as active job cards as per the government).

However, this definition of active workers cannot be fully believed as people who are acquainted with rural realities know that many workers have left MNREGA jobs years ago when they never got paid for their work and do not want to take up MNREGA work as for the uncertainty in payments involved with it. Many of these workers have migrated permanently as well.

Thus, the government’s argument that the inactive job card holders have withdrawn from MNREGA works is only half truth as it never tried to delve into reasons why these people have chosen to refrain from MNREGA and never tried to address their issues.

However, considering the official figures, the current allocation of Rs 55,000 crore seems to be insufficient even if all the eligible families want to complete 50 days of employment in a year. As a result every year by October about 80-90% of the funds get exhausted and the administration slows down the sanctioning orders to the states resulting in major decline in work in the peak working season after paddy harvest.

It is important to understand that for the last two consecutive years (2016-17 and 2017-18) the government has been allocating supplementary allocations to meet the expenses. Those allocations too are miserly done and insufficient. In the year 2016-17 the original budget was Rs 37,500 crore and the government had to allocate an additional Rs 10,000 crore during the year.

The very next year the finance minister had bragged proudly of the highest ever allocations of Rs 48,000 crore, Rs 10500 crores more than the previous year, while it was just an increase of Rs 500 crore in real terms. In 2017-18 the government again added a supplementary allocation of Rs 7,000 crores to make it Rs 55,000 crore, which continues to be the same in 2018-19 as well.

Thrice last year payments have stopped from the Central government for different reasons. The major reason for frozen payments is lack of funds at the Central government, as 87% of the funds got exhausted within the first six months and payments to workers had stopped from the Central government, which further took no action to compensate the workers as per the Act.

Meanwhile, the MNREGA Management Information System (MIS) continued to show an impressive 85% on time payments generations during the year, which goes to show the ineffectiveness of the MNREGA MIS as well. It has exposed that the credibility of the NREGA MIS is questionable and the system should be re-examined.

The Ministry also withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period (e.g. submission of the previous financial year’s audited fund statements, utilization certificates, bank reconciliation certificates etc.) or against whom complaints of implementation irregularities are learnt of.

There is no legal basis of penalizing those responsible for lapses by state governments. Further, no penalties are levied on states for their misconduct. The Ministry can, in fact, ask states to bear the burden of wage payments for the duration that it takes them to submit the required documents or take corrective action for its lapses. Last year, from August 31, about Rs 3,066 crore wage money was pending for about two months from the Central government due to administrative delays and no compensation for the same were provided.

This year too about 80% of the MNREGA funds have been released by the Centre with 5.5 months still to go, which goes to show that the government does not want to learn from its previous failures and it is blind to the protests and agitations by the workers.

Insufficient funds and untimely payments have made MNREGA weak in the past few years, further adding to the implementation flaws and lack of monitoring. The funds crisis at the peak working seasons and long payment delays due to inadequate supply has made life miserable for workers. Considering the fact that MNREGA wages are not lucrative enough and wages of 17 states are even lower than their agricultural minimum wages, the irregularities in fund flow and payments further adds salt to the injury.

With 7.5 crore MNREGA workers helplessly working on the ground, uncertain of their payments and expecting a respectable daily wage being paid to them and on time, it will be important to see how the BJP government responds now, considering the elections next year.

*Working in Jharkhand and Odisha with the tribal population for the past 10 years, especially on MNREGA and other social security programmes

A version of this article was first published in

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