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In the centre-state ping-pong, workers suffer as NREGA slips through the cracks

With thousands of crores in unpaid wages and many other serious gaps in implementation, NREGA remains more on paper than in practice.

August 04, 2022 / 02:53 PM IST
A person working under the Mahatma Gandhi National Rural Employment Guarantee Act or MNREGA scheme (Image by PradeepGaurs/Shutterstock)

A person working under the Mahatma Gandhi National Rural Employment Guarantee Act or MNREGA scheme (Image by PradeepGaurs/Shutterstock)

A rural employment guarantee scheme conceived under the UPA regime

continues to be the mainstay of the rural poor, not just during the pandemic but even now, as the economy rebounds. But several issues have been plaguing the Mahatma Gandhi National Rural Employment Guarantee (NREGA), helmed by the ministry of rural development and panchayati raj (MoRD).

Demand for work under this scheme remains high, but a large portion of that demand remains unmet since not every household that demands work gets it. Also, the scheme has a patchy record of paying wages within the stipulated 15 days of work having been completed, with crores of rupees in wage arrears continuing to overflow into the next financial year.

The third problem is the non-indexation of wages to inflation, thereby suppressing the same.

On Wednesday, hundreds of NREGA workers from over a dozen states

descended on Delhi’s Jantar Mantar, raising slogans against the union government and demanding wage arrears.

A standing committee report presented in parliament this week has also highlighted the glitches in NREGA implementation. The MPs have, in fact, sought an increase in the number of days a rural household is entitled to get guaranteed work under the scheme, from 100 to 150, through an act of parliament. They have reiterated their displeasure at mounting arrears and non-indexation.


Explained: What is the caste based payment system in MGNREGA, why is the government junking it?

The union government’s biggest welfare scheme continues to face

glitches as the rural development ministry throws the ball in the states’ court, the finance ministry allocates sub-optimal budgets, and implementation issues haunt the rural poor.

In 2020-2021, the first full pandemic year, the highest ever amount of Rs 1.11 lakh crore was released by the centre towards NREGA; in FY22, the amount reduced to Rs. 98,000 crore.

The NREGA Sangharsh Morcha, an umbrella organisation which fights for the rights of workers, raised these issues during the Jantar Mantar protests.

In 2020-2021, the number of person days (number of days a year a household gets work under the scheme) was merely 49 against the guaranteed 100 days. In the last five years, the highest number of person days was just 54 (FY22). This demonstrates that the 100-day job guarantee remains only on paper. The Morcha also alleged that currently, nearly Rs 2,500 crore is pending in wage arrears for works done in FY22, and till now this fiscal.

On the issue of hiking wages, the Morcha and the MPs are in agreement. Both have urged the centre to do away with the current disparity: a worker enrolled under NREGA in Madhya Pradesh in FY22 was entitled to just Rs. 193 per day. For the same work, a worker in some gram panchayats of Sikkim were entitled to Rs. 318. The figures have changed nominally this fiscal, the disparity has not.

Linkage of wages with the CPI-AL

Regarding disparity, the ministry has a stock response: state governments can offer wages above the minimum prescribed under the NREGA. But the MPs are having none of that. They have said that “the (standing parliamentary) committee is seriously concerned about the plight of beneficiaries belonging to the extreme periphery of society, for

whom any increase in wages through linkage with a suitable inflationary index, providing a buffer against rising costs, would be a blessing.’’

The committee has appealed to the ministry to review its stand and bring on board all stakeholders to increase wages underNREGA by linking it with the inflation index.

The Morcha has also pointed out the inadequacy of the budget allotted to NREGA for the last five years. “What are the priorities of the government?,’’ it asks. Comparing the NREGA budget with corporate taxes foregone (due to tax incentives), both as a percentage of GDP, the Morcha shows that the NREGA budget has drastically decreased from FY20-21 to FY22-23, while corporate tax incentives have grown between FY19-20 to FY20-21 (the last available data).

In 2020-21, we saw the highest ever allocation for this scheme in the union budget: 3.65% of the government’s total expenditure. In FY23 it is just 1.85%, marking a steep decline.
Sindhu Bhattacharya is a journalist based in Delhi who writes on a range of topics in business and economy.
first published: Aug 4, 2022 02:53 pm
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