NREGA in Budget 2017: What the government isn’t telling us

Last Updated: Mon, Feb 06, 2017 11:24 hrs
Budget 2017 (AFP Photo)

This year’s Budget was lauded by many for its commitment to fiscal prudence. Finance Minister Arun Jaitely reiterated the government’s commitment to double farm incomes in five years by announcing a 24 percent increase in rural spending. As part of this, the government patted itself on the back for a record allocation for the National Rural Employment Guarantee Scheme which provides 100 days work to every rural household.

Lest we forget that the same government criticised the MREGA as evidence of failure of the UPA, here is a video by Scroll which shows then Gujarat Chief Minister Narendra Modi making fun of the scheme.

“Honourable Members would be happy to note that the budget provision of Rs.38,500 crores under MGNREGA in 2016-17 has been increased to Rs. 48,000 crores in 2017-18. This is the highest ever allocation for MGNREGA.”

While this may be true in terms of absolute numbers, what the Finance Minister fails to mention is that last year supplementary allocations were made. Harsh Mander writes in The Hindustan Times

There seems at first a significant 25 % rise. However, the reality is that after a series of severe raps from the Supreme Court, during the course of 2016-17, the total allocations were raised to Rs 47,500 crore. Therefore, it was a mere Rs 500 crore that was added over the previous year, a rise of just 1 %. And if we factor in inflation, this year’s allocation does not even match that of the previous year. New financial year would begin with pending liabilities of at least Rs 13,000 crore, reducing further the availability for next year.

According to the Indian Express, 93% of the funds allocated for this financial year has already been spent due to increased periods of rural distress.

Owing to the increased take-up of work due to drought-like conditions in April to June 2016, the rural development ministry had made a demand for Rs 15,000 crore over the last two supplementary grants. As against this, the finance ministry sanctioned only Rs 9000 crore.

With this being the case, the proposed hike in allocation would be enough given job losses in the informal sector, which is now widely acknowledged to be the worst hit by demonetisation. Business Today estimates that this figure is about 4 lakh and that as a result, the rural economy is likely to face a strain. Former JNU Professor Arun Kumar doing not feel that the allocation is adequate.

Due to job losses, many people are migrating back to their villages. Demand for jobs are up by 60 per cent in rural area and Rs 10,000 crore is not enough to fill in the growing demand of rural employment.

Another issue that the budget fails to address is the piling up liabilities, in terms of outstanding wage payments. If this was to be factored in, very little would be available for implementation of the scheme. Activist Aruna Roy pointed this out and also noted another fundamental flaw.

for the MGNREGA to work as per the legislation, it needs to have adequate resources to be made available for work to be provided on demand. As of today, 22 out of 34 states have negative balances. As per the ministry’s own data a total of Rs 3,469 crore in pending liabilities have already piled up, even as they have spent 93% of the funds available for this financial year. This may shoot up over the next two months, as traditionally demand for work has peaked during this season.

The Wire quotes data from the People’s Action for Employment Guarantee to further make this case.

Even to honour only the approved budget for the months of February 2017 and March 2017, nearly Rs 10,013 crores would be required (at the average cost per person day of Rs 228)”. If that rate continues, pending liabilities at the end of this year would be at Rs 13,482 crore.

“Participation of women in MGNREGA has increased to 55% from less than 48% in the past.”

This is indeed a positive development. However, if the focus of much of the work will be creation of farm ponds and compost pits, women are likely to have a tough time participating in work. Last year, the government set a target of building 5 lakh pond and 10 lakh pits which it has said will be achieved. An additional 5 lakh ponds are proposed to be taken up this year. Times of India’s Jaideep Dheogharial said that many women in tribal areas were sceptical about finding work because of this.

James Herenj of Jharkhand NREGA Watch said that during a recent visit to villages close to Ranchi, they found most women labourers sitting idle because their husbands moved to the city area for working in the real estate sector. "These women cannot take up work of farm ponds unless there is a male member in the family for digging work, which is tedious and tough for them to take up independently," he said, adding that women are mostly engaged in head-loading.

The initiative to geo-tag all MGNREGA assets and putting them in public domain has established greater transparency. We are also using space technology in a big way to plan MGNREGA works.

One can only hope that this will be case. Many experts say that efforts to digitise NREGA work has not made it more efficient but has in fact had the opposite effect. Economist Reetika Khera writes in NDTV

Now, the MIS has morphed into a "Digital Red Tape" nightmare: a horrendous combination of old-style paperwork with techno-utopic digitization has turned into a big drag on its implementation. The meagre administrative staff for NREGA was swamped (around 2009) with entering bank account numbers into the NREGA MIS; soon as that settled, NREGA got hit by "Hurricane Aadhaar" which has forced the NREGA machinery to privilege the creation of an Aadhaar-compliant system over implementation of the programme itself. 

Given this over burdening and several other problems with the implementation of NREGA, one wonders if merely a marginal increase in fund allocation will provide much needed relief to the rural community.

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