Budget 2022: Need to get realistic on MGNREGA allocation

Even as the country struggles with the pain inflicted by the pandemic and the need to shore up consumption demand, Budget FY23 maintained the allocation for MGNREGA at the Rs 73,000 crore that was budgeted for FY22; the revised estimate for FY22 stands at Rs 98,000 crore. The government perhaps hopes that its public capex push, and how it will crowd-in private investment, will open up employment opportunities and choices for the rural poor. Many disagree, though. A press note from Ind-Ra, the ratings agency, for instance, terms the decreased allocation as “perplexing”, against the backdrop of less employment-intensive sectors accounting for nearly two-thirds of the capex budgeted.

Adding to the debate is a recent report of a parliamentary standing committee which recommends that the rural development ministry, the line ministry for MGNREGA, “review its budgetary demand pertaining to MGNREGA and ensure that the ‘agreed-to labour budget’ is made at concerned level keeping in view the expenditure of previous years”. The committee makes particular note of the fact that, since inception, “it has been seen through the analysis of its Budget Estimate (BE) that each time there has been a substantial hike at the Revised Estimate (RE) stage.” While the government is of the view that the programme is demand-based, and more funds can be infused later, work allotted under the programme has consistently lagged the work demanded. To be sure, states and local governments do have a role to play in this, but the Centre also needs to make more realistic assessments on outlays.

A recent news report cited an unnamed senior ministry official to say that there have been “tremendous leakages” over the past two years, despite moving to DBT for wages—middlemen allegedly arefalsely showing work by eligible beneficiaries for a ‘commission’ from the wages credited to the latter’s accounts. However, there are technological solutions aplenty—time-stamped location triangulation is one—that the government can consider, working with the appropriate stakeholders. The National Mobile Monitoring Software app permits taking real time attendance of workers at worksites along with geo-tagged photographs. Besides, the department of rural development has claimed in a written reply to the parliamentary committee that “implementation, monitoring and accountability measures ensure that aspirations … are met within schematic framework”, highlighting, among other things, the role played by implementation review, including field visits and social audits.

The parliamentary committee’s recommendation that the maximum days of work be increased from 100 to 150 needs to be weighed carefully. The average days of employment per eligible household has significantly undershot the guaranteed 100 days, at approximately 51, 48 and 52, in FY19, FY20, and FY21, respectively. Indeed, the number of households that completed the guaranteed 100 days of employment in FY19 and FY20 accounted for just 10% and 7%, respectively, of the households that received work under the programme. When barely half the current limit is getting exhausted—whether because of lack of demand or the lack of wherewithal with the government (Centre and the states) to provide—raising the number of days of work doesn’t seem an urgent need. The need, rather, is to fix the delay in wage payments, a concern that the committee flagged in its report. A lot of this needs to be addressed at the states’ end, especially when it comes to updating field data for wage processing. While the recommendation to improve wage rates—preferably by indexing wages against an appropriate inflation—measure is well-intended, MGNREGA must be viewed as a fallback option rather than a primary employment one; instead of disrupting the labour market, it should be a contingency for unemployment.