No money left in MGNREGA coffers

Context:

The Centre’s flagship rural employment scheme – Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme – has run out of funds halfway through the financial year, and supplementary budgetary allocations will not come to the rescue for at least another month.

Relevance:

GS-II: Social Justice and Governance (Health and Poverty related issues, Government Interventions and Policies, Issues arising out of the design and implementation of Government Policies)

Dimensions of the Article:

1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
2. About the recent MGNERGA funds shortage

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

• Mahatma Gandhi National Rural Employment Guarantee Act, MGNREGA, is an Indian labour law and social security measure that aims to guarantee the ‘right to work’. This act was passed in September 2005.
• It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
• It covers all districts of India except the ones with 100% urban population.
• MGNREGA is to be implemented mainly by gram panchayats (GPs). The involvement of contractors is banned.
• Apart from providing economic security and creating rural assets, NREGA can help in protecting the environment, empowering rural women, reducing rural-urban migration and fostering social equity, among others.

How MGNREGA came to be?

• In 1991, the P.V Narashima Rao government proposed a pilot scheme for generating employment in rural areas with the following goals:
  • Employment Generation for agricultural labour during the lean season.
  • Infrastructure Development
  • Enhanced Food Security
• This scheme was called the Employment Assurance Scheme which later evolved into the MGNREGA after the merger with the Food for Work Programme in the early 2000s.

Features of MGNREGA

1. It gives a significant amount of control to the Gram Panchayats for managing public works, strengthening Panchayati Raj Institutions.
2. Gram Sabhas are free to accept or reject recommendations from Intermediate and District Panchayats.
3. It incorporates accountability in its operational guidelines and ensures compliance and transparency at all levels.

Objectives of MGNREGA

1. Provide 100 days of guaranteed wage employment to rural unskilled labour
2. Increase economic security
3. Decrease migration of labour from rural to urban areas

About the recent MGNERGA funds shortage

• According to its own financial statement, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme shows a negative net balance of ₹8,686 crore.
• This means that payments for MGNREGA workers as well as material costs will be delayed, unless States dip into their own funds.
• Activists say the Centre is condemning workers to “forced labour” by delaying wage payments at a time of economic distress. However, the Centre is now accusing many States of “artificially creating demand” for work on the ground.
• However, the scheme’s 2021-22 budget was set at just ₹73,000 crore, with the Centre arguing that the nationwide lockdown was over and that supplementary budgetary allocations would be available if money ran out.
• Also, MGNREGA data shows that 13% of households who demanded work under the scheme were not provided work.

-Source: The Hindu