[op-ed snap] A triple blow to job guarantee scheme


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

 From UPSC perspective, the following things are important:

Prelims level: MGNREGA, Minimum Wages Act, 1948, National Electronic Fund Management System

Mains level: The newscard throws light on the institutional bottlenecks in the implementation of the job guarantee scheme


Pending wages under MGNREGA

  1. The total amount of wages pending under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme for the whole country (2016-17) was around ₹11,000 crore
  2. This sum is a fifth of the MGNREGA budget announced for the financial year 2018-19
  3. On the other hand, rising instances of frauds whose amounts exceed far than the requirements of the very job guarantee scheme need to be put in perspective

What the Scheme actually say?

  1. The scheme is meant to be demand-driven in the sense that the government is mandated to provide work within 15 days of a worker seeking work. Otherwise, the worker is entitled to an unemployment allowance
  2. A second key provision of the Act pertains to payment of wages within 15 days of completion of work, failing which a worker is entitled to a delay compensation of 0.05% per day of the wages earned
  3. However, both these provisions have been routinely violated. There is an ongoing Public Interest Litigation in the Supreme Court (Swaraj Abhiyan v. the Union of India) concerning these violations

Three ways in which a lack of funds has led to a subverting of these provisions in letter and spirit

  • Budget allocation over the years has been insufficient
  1. While there has been an increase in the nominal budget in the last two years, after adjusting for inflation, the budget has actually decreased over the years
  2. The real budget of 2018-19 is much lower than that of 2010-11
  • Even this low budget allocation has undergone various kinds of curtailment
  1. By December of each year, through a bottom-up participatory planning approach, every State submits a labour budget (LB) to the Centre
  2. This contains the anticipated labour demand for the next financial year
  3. The Centre, on its part, has been using an arbitrary “Approved Labour Budget” to cut down funds requested by States (using the National Electronic Fund Management System, or Ne-FMS), making this a supply-driven programme

Curtailing the Work-demand of Workers

  1. Ne-FMS guidelines issued in 2016-17 say the Management Information System (MIS) “will not allow” States to “generate more employment above the limits set by Agreed to LB”
  2. This meant that the work demand of workers was not even getting registered and the MIS was being used as a means to curb work demand
  3. Thus the “approved labour budget” puts a cap on funds

Worsening situation due to poor allocation

  1. The Ministry of Finance memorandum said that the principal reasons for payment delays were infrastructural bottlenecks, unavailability of funds and lack of administrative compliance
  2. The study findings and this memorandum are at odds with the Centre’s dubious claims of 85% of payments having been made on time
  3. The poor are paying a heavy price for this throttling of funds by the Centre

Stagnating Wages

  1. Delinking of MGNREGA wage rates from the Minimum Wages Act (MWA), 1948 has contributed to this
  2. MGNREGA wages are a less lucrative option for the marginalized, being lower than the minimum agricultural wages in most States
  3. As primary beneficiaries of the Act, women, Dalits, and Adivasis could be the most affected and pushed to choose more vulnerable and hazardous employment opportunities
  4. Such contravention of the MWA is illegal

Way Forward

  1. MGNREGA now faces a triple but correlated crisis — a lack of sufficient funds, rampant payment delays, and abysmal wage rates
  2. What this reflects is not only a legal crisis created by the Centre but also a moral one where the fight is not even for a living wage but one for subsistence
  3. One hopes for a just order from the judiciary
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