Bharat sinking

Written by Raj Kumar Ray | New Delhi | Updated: Apr 19 2014, 10:01am hrs
In what could be a big question mark on the worlds largest jobs scheme, the number of people who availed the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) fell 8.4% year-on-year in 2013-14, reports Raj Kumar Ray in New Delhi. Also, only a tenth of the people enrolled got the promised 100 days of work under the scheme. The number of persons who availed MGNREGS fell from 8.2 crore in 2011-12 to 7.97 crore in 2012-13 and further to 7.31 crore last fiscal, data collated by the rural development ministry show. Importantly, the decline in MGNREGS jobs is despite the fact that demand for such work has risen from 5.04 crore households in 2012-13 to 5.11 crore last fiscal and a pile-up of projects identified for the scheme.

While implementation of most welfare schemes have generally been tardy, what's particularly worrisome about MGNREGS is the delay in wage payments to poor daily-wage earners about 26% of MGNREGS workers got wages after a delay of 30 days even though most of them have an account either with a bank or a post office through which money is remitted for the flagship scheme.

Analysts call for urgent governance reforms to improve the implementation of welfare schemes such as MGNREGS. While robust farm output and reduction in poverty levels may have reduced the dependence for MGNREGS to some extent, analysts still point to huge demand for decent jobs in the country.

"The new government needs to make the improvement of business process of delivery (in welfare schemes) its priority. No amount of top level policy tinkering is going to fix the problem," said Rathin Roy, director at the National Institute of Public Finance and Policy.

The reduction in level of employment generated under NREGA is a cause for serious concern and a reflection of half-heartedly implementation of NREGA by UPA-II, said Reetika Khera, an economist at IIT Delhi.

The number of households provided jobs under MGNREGS fell by 4.8% to 4.75 crore in 2013-14, which is steeper than the 1.5% decline in 2012-13 but better than the 9.2% fall in 2011-12. Since inception in 2006, the jobs provided under the scheme has risen sharply by 60% in 2007-08 but growth started tapering off to 33% in 2008-09, and 16.4% in 2009-10 and 4.6% in 2010-11.

In contrast, the demand from household for the 100-day job scheme was been consistently growing expect in 2011-12, when it fell by 9.7%.

One of the reason for the consistent demand for MGNREGS work is the steep rise in wages, which rose from R65 a day in 2006-07 to R132.6 in 2013-14 as the government indexed it with CPI inflation.

Even the average number of days of work under the scheme is less than 50 days (except during 2009-10 when it was 54 days), as against the mandate of 100 days. In fact, only 10% of the households could avail the 100 days of work under MGNREGS.

While India Inc often complains of rising rural wages as compared to urban wages for the shortages in labour for factories, analysts and opposition political parties refute the claim as urban wages are still much higher and hence encourages migration of rural workers to cities.

Only 10% getting 100 days of work does not necessarily have to be a cause for concern for instance, not everyone who has a job card will want 100 days. The job card exists so that, if anything goes wrong, people can work on NREGA. Having said that, there is a huge unmet demand for NREGA work, said Khera

Apart from lower wages, the job scheme also suffers because of implementation problems. The main problem is the delay in paying poor workers their wages. While 52.8% of the workers got their payments within 15 days, about 26% of NREGS workers got wages after a delay of 30 days. The central government's expenditure on NREGS increased from R8,823 crore in 2006-07 to R39,735 crore in 2012-13 but declined to R37,724 last fiscal.