Context:- Jobs generated under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have shown a dip compared to last year after July. 

• In 2018-19, demand was registered from 5.88 crore households, and 5.27 crore of them were provided work. These numbers were the highest, at least during the last five years of the present government. Even in terms of person-days of work generated, the numbers rose from a mere 165.64 crore in 2014-15 to 267.99 crore in 2018-19.

Reason for fall in employment

• According to government officials, the fall in MGNREGA employment after July has been largely due to the onset of the southwest monsoon. Rainfall during the monsoon season (June-September) this year was 10% above the historical long-term average — the highest since 1994 — whereas it was 9.4% below average in 2018. An above-normal monsoon meant there was lower demand for MGNREGA work
• It can be seen that the gap between the number of households demanding MGNREGA work and the number who were provided work has been the highest in 2019-20. This indicates that even if demand fell, supply of work fell even more.

Lack of funds

• The trends raise the question whether all this is linked to lack of funds. For 2019-20, the Modi government has allocated Rs 60,000 crore towards MGNREGA. But out of this budgeted sum, Rs 9,493.80 crore would be required for clearing the liabilities of wages, material and administrative costs for previous years. Nikhil Dey of the advocacy group Mazdoor Kisan Shakti Sangathan claimed that in 2018-19, the Centre had asked some state governments to pay wages to workers for February and March in advance and treat this as “loan” that the Centre would repay the states in the new financial year.
• The cost of providing a day’s work to a single person has been taken at an average of Rs 249.86 for 2019-20. For 270.21 crore person-days of work that was approved, the MGNREGA labour budget alone for this fiscal worked out to roughly Rs 67,514.67 crore. But the total budgetary allocation, which also includes provision towards material and administrative expenses, has been only Rs 60,000 crore, out of which Rs 55,829.62 crore was already spent as on December 24. Meanwhile, the Centre has revised upwards its original plan of providing 260 crore person-days of work for 2019-20 to 316.73 crore person-days, following a decision to augment the number of days of employment per household under MGNREGA from 100 to 150 in flood-affected districts of states such as Karnataka

Other support schemes

• It is not MGNREGA alone that is witnessing a deceleration of activity this fiscal. The same goes for the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), the Modi government’s farm income support scheme that was launched in December 2018, ahead of the Lok Sabha elections. In the first instalment released for December 2018 to March 2019, as many as 8.05 crore farmers were covered, with each of them receiving Rs 2,000. Those numbers fell to 7.43 crore in the second instalment (April-July 2019) and further to 5.91 crore in the third (August-November). In all, the total amount disbursed under the income support scheme in the year 2019-20 is Rs 32,320.86 crore, which is significantly short of the Rs 75,000 crore budgeted for it. Further, of the total Rs 95,000 allocated for the scheme since its inception, Rs 48,421.65 crore has been spent up to December 2019, which is roughly half the allocated sum.
• Even the number of rural houses built under PM Awas Yojana-Gramin — which had recorded a sharp rise from 11.96 lakh in 2014-15 and 18.22 lakh in 2015-16 to 32.13 lakh, 44.55 lakh and 47.33 lakh during the following three fiscals — has seen a drop to just 7.2 lakh so far in 2019-20. A senior government official clarified, however, that the process of registration, geo-tagging, etc has already started, and more houses will be built later in the year. The official also cited a target of building 60 lakh houses under the PM-AY Gramin by June 2020. Up to 55 lakh new homes are under construction, and 7 lakh have been completed

MGNREGA History:

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.

Objectives of MGNREGA:

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has the following objectives:

• Provide 100 days of guaranteed wage employment to rural unskilled labour
• Increase economic security
• Decrease migration of labour from rural to urban areas

MGNREGA differentiates itself from earlier welfare schemes by taking a grassroots-driven approach to employment generation. The programmes under the act are demand driven and provide legal provisions for appeal in case, work is not provided or payments are delayed. The scheme is funded by the central government which bears the full cost of unskilled labour and 75% of the cost of material for works undertaken under this law. The central and state governments audit the works undertaken under this act through annual reports prepared by CEGC (Central Employment Guarantee Council) and the SEGC (State Employment Guarantee Councils). These reports have to be presented by the incumbent government in the legislature.

A few salient features of the scheme are:

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