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What's the article about?
- It talks about the recent changes suggested by the Center in the MGNREGA scheme.
Relevance:
- GS2: Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes; Mechanisms, Laws, Institutions and Bodies constituted for the Protection and Betterment of these Vulnerable Sections;
- Prelims
Context:
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has proved to be quite successful in reducing poverty in rural areas.
- It has asserted net positive impact in the rural areas.
- But it also has some inherent limitations. And now the recent changes suggested by the Center are not in a positive direction.
What is MGNREGA Scheme?
- The Mahatma Gandhi National Rural Employment Guarantee Act, earlier known as the National Rural Employment Guarantee Act was passed in 2005 to augment employment generation and social security in India.
- The scheme is a demand-driven wage employment scheme, which functions under the Ministry of Rural Development.
- Every adult member of a household in a rural area with a job card is eligible for a job under the scheme.
- The scheme envisages providing 100 days of guaranteed wage employment in a financial year to adult member volunteers for unskilled manual work.
What are the positives of the MGNREGA scheme:
- It reduced poverty (penury) through providing off-season employment.
- It improved household consumption among the invariably poor citizens.
- It acted as insurance during monsoon deficient seasons.
- It provided greater food security.
- During the pandemic, when thousands of migrant workers who left urban areas due to the lockdowns took up work under the MGNREGA in rural areas where demand for the menial but arduous work peaked.
What are the issues faced by the MGNREGA?
- Ridiculously Low Wage Rate
- Inadequate Financing
- Delay in Payment of Wages
- Ineffective Role of Local governments
- Large Number of Incomplete works
Analysis:
- A key to the success of any welfare programme is the conviction in its implementation.
- Recently, the allocation for the scheme in the Union Budget, reduced from 2.14% of overall outlay in FY23 to 1.33% in FY24.
- This was despite implementation in recent years experiencing wage delays and underfunding.
- This has also depressed demand, with formal requests for work only being a portion of the actual demand.
- Also, there is much evidence that Aadhaar-based payments have neither reduced corruption nor reduced wage payment delays while creating hurdles for officials and workers during implementation.
- Union Rural Development Minister said that the Act should be amended to change the contribution of funds from 100% by the government to a 60-40 split between the Centre and the States in order to make States “more vigilant regarding corruption”.
- But this will only lead to further complications in funding.
- There has been a shrinking in the States’ share of taxes following GST and the financial stresses during the pandemic.
- States taking up 40% of the funding burden would affect the payment of wages even further.
- Besides, MGNREGS is a demand-driven programme and salient especially in poorer States and it is incumbent upon the Centre to ensure its robust funding instead of putting the onus on individual States to do so.
Way Forward:
- The government must change its approach towards the MGNREGS by recognising its potential in catering to the poor’s right to work.
