COVID-19 impact – delayed payments, less work pushes up MNREGA needs; raise total spends up to Rs 1.3 lakh crore, say activists

Man working under Mahatma Gandhi National Rural Employment Guarantee Act or MNREGA (Source: ShutterStock)

There is bad news from the countryside.

The second wave of the COVID-19 pandemic has not just battered India’s large cities with record number of infections and mortality, it has also wreaked havoc in the hinterland.

An analysis by brokerage Elara Securities has shown that 58 percent of total active cases on May 18 were in rural districts, a significant increase from April 1 when rural districts accounted for 46 percent of active cases.

As the infection spreads to India's interior, livelihood loss becomes a double-edged sword: some migrant workers losing jobs in cities are returning to their homes in the hinterland and need alternate sources of earning.

Diminished opportunities

Meanwhile, rural employment opportunities have diminished.

In this scenario, all eyes have once again turned to the Congress-led UPA-era rural employment guarantee scheme, the Mahatma Gandhi National Rural Employment Generation Act (MNREGA).

This scheme had come to the aid of the needy last fiscal too when a record number of people demanded and got work.

The mandate of MNREGA is to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

The provisions of MNREGA also mandate payment of an unemployment allowance to households, which do not get work despite seeking it.

Providing livelihoods

How this scheme helped provide livelihoods during the pandemic last year is evident from this data: the number of households demanding work under MNREGA increased by at least a third, to over 8.19 crore last fiscal against less than six crore households, which had sought work under the scheme in 2019-20.

The number of person days created was 383.01 crore in 2020-21, the highest ever and up by 45 percent over the previous fiscal.

This scheme provided 100-day employment to more than 11 crore people, again the highest number ever in 2020-21. Last fiscal, the Centre had allocated Rs 1.1 lakh crore to MNREGA, the biggest ever allocation.

But in 2021-22, as infections rose, work opportunities under MNREGA have dwindled despite there being enough demand for work.

Sandeep Pradhan Sonua, a Sahayta Kendra Sanchalak (Director, Help Centre) in Sonua block of Jharkhand, pointed out that with only partial payments arriving for work done between April and mid-May, workers in his block are a demotivated lot.

Besides, the panchayat officials who were earlier accepting requests for work from households in the block under NREGS are now unavailable - they have been drafted for vaccination duties by the government. This means households needing work cannot register their demand.

Says Siraj Dutta, a member of the NREGA Sangharsh Morcha: “Wages of Jharkhand's NREGA workers were pending for more than a month in April-May as the central government had not released funds. At a time when workers should get additional income, the government has failed to deliver even their hard-earned wages.”

Total number of households

According to government data, the total number of households, which were given work in April 2021 was nearly 2.13 crore, nearly double the number of households that were provided work in the same month last year at 1.1 crore.

Activists point out that the Centre may need to expand the budgetary provision for the scheme to meet the raised demand.

Debmalya Nandi, another Member of NREGA Sangharsh Morcha, pointed out that this year, the government will need to budget for providing work to at least 6.5 crore households, working for 75-80 days at the current per person per day cost of about Rs 260.

This math makes it clear that the Budget Estimate (BE) of Rs 73,000 crore for the scheme needs to be expanded substantially for 2021-22.

In any case, the BE for FY 22 is more than BE of 2020-21 but almost three-fourths of the revised estimates for last fiscal.

Wage increase

Nandi has estimated total spending of about Rs 1.3 lakh crore, while also demanding a wage increase under the scheme of 10 percent instead of the notified four percent.

The increased wages would add another Rs 10,000 crore to the NREGA budget for FY22.

Nandi has also said that the number of households demanding work this fiscal is estimated to be a crore less than in FY21, despite COVID-19 induced stress.

Budgetary allocation slashed

And there are several reasons for this: the total budgetary allocation for MNREGA has been slashed drastically, payments due for work done since the beginning of the fiscal have been held up and new works are not being sanctioned or being reduced drastically across states.

In Rajasthan, for example, work under NREGA has been completely stopped by a state government order. Uttar Pradesh, West Bengal, and Karnataka have also reduced works under the scheme by a large margin.

Besides raising the budgetary allocation for the scheme, the Sangharsh Morcha has also demanded that the number of guaranteed days of work be doubled to 200 and wages be nearly tripled to Rs 600 per day per person.

After the latest wage rate revision, the average daily rate is Rs 200.27 for FY21.

A worker in Kerala is entitled to the same wage as in the previous fiscal since not a rupee has been increased; in Bihar, a worker under MNREGA can now earn the princely sum of Rs 4 more; in Chhattisgarh, the increase is Rs 3.

In many states, the MNREGA per day wages continue below the respective minimum wages for agricultural workers.