A big battle is brewing on the proposed amendments to the Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) Act.
The Centre has proposed to restrict the scope of the scheme to only backward regions, leaving out big states like Maharashtra, Tamil Nadu, Gujarat and many more.
It has also tweaked the labour-material ratio under the scheme from 60:40 to 51:49, thereby restricting the wage payouts to unskilled rural workers.Various quarters at the central government side are indicating that there is really no big deal because overall the size of the pie remains the same. There has been no change so far in the current year’s Budget allocation for MNREGA.
If one looks at the RE of the previous financial years, there was no change in that. The central government stands committed towards Rs 33000-34000 crore.
On the labour material ratio that the government is planning to change, the other proposal also has come from the rural development ministry side which says that even the scope of the scheme needs to be restricted by pulling out all the prosperous states like Tamil Nadu, Gujarat, Maharashtra, Kerala, Haryana.
The impression that is being created is that the government is probably trying to restrict the scope of the act but everyone in the central ministries is standing by whatever changes are being proposed.The finance ministry, however, is confident of handling any resource demand from State Government for MGNREGA and has said that the scheme is being tweaked for asset creation. It has also said that they are ready to increase the Budget allocation by another Rs 3000-4000 crore.
The rural development ministry has said that funds is not a problem at all but the scheme needs better targeting. The government is agreeing to this as, as per the act also it is at the panchyat level that the implementation really rolls out. The government is now now planning to bring it to the district level. So, there could be scope for manipulation, corruption so on and so forth.
The scheme has already been riddled with lot of drawbacks. Even if one looks at the actual allocation that has been going out from the state governments, there are huge liabilities in terms of the wage payments by various state governments.
These are well-known issues plaguing the scheme on top of that if the government tries to restrict the scope by changing the ratio, then that gives a very different connotation.Activist groups like the People's Action for Employment Guarantee (PAEG) say NDA has a political motive and are reneging on their promise to not touch MGNREGA.Aruna Roy, RTI Activist, Former Member, NAC said, “The government is still spending under 1 percent of the Gross Domestic Product (GDP). In fact it has been point some percent that was spent, 0.8 percent at maximum spending and it is now something around 0.2 percent. So why is there such a hype and why is there no attention being paid.”
Roy further went on to say, “About Rs 3.5 trillion have been waived off in taxes to the corporate houses. We are not raising that issue. Why is this small percentage of money which goes into the well being of hundreds of villages being raised as such a critical issue and why is this NREGA bashing taking place. It is a big question and it is a huge political question. It has enormous implications.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
