With a per capita income of R143,547 in FY16, Tamil Nadu is not one of India’s poorest states—it is actually the 5th or the 6th richest if you leave out city-states like Delhi and union territories like Chandigarh—yet it gets the lion’s share of MGNREGA employment which is meant for the really poor; of the 168 crore person-days of employment generated so far this year, over 17% was in Tamil Nadu. Karnataka, whose per capita income is a bit higher has under-5% of the country’s poor, but accounted for over 3.5% of the employment created under the UPA’s flagship scheme this year. Uttar Pradesh which accounts for over 22% of the country’s poor, accounted for less than 8% of the MGNREGA jobs. Bihar, which accounts for over 13% of the country’s poor accounts for less than 3% of the MGNREGA jobs. Of the poor states, it is only West Bengal that appears to be doing well in terms of using government dole well—it has a little less than 7% of the country’s poor and accounts for over 9% of the jobs created under the unemployment scheme.
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While most accuse the central government under the NDA of trying to strangle the UPA’s flagship scheme, the truth of the matter is that the utilisation of the scheme depends almost entirely on the states. Even if, for the sake of argument, the central government was able to increase the allocation for MGNREGA, it is unlikely the really poor states would be able to take advantage of the scheme. That’s not surprising, of course, since the main reason why these states are poor has to do with poor levels of governance—if the state government is not able to do much to be able to attract fresh investment, it’s social sector delivery is also likely to be poor, and not just in the case of MGNREGA. Andhra Pradesh, which is home to under-3% of the poor but gets over 9% of jobs under the employment scheme is also the state where 100% of ration cards are Aadhaar-seeded and all ration shops in the state have PoS machines to ensure only legitimate customers get subsidised rations—in sharp contrast, just 0.13% of ration cards in Bihar are Aadhaar-seeded. Given that poorer states also tend to grow slower—in FY16, Bihar grew 8.9% versus Karnataka’s 11.9%—their inability to make the most of central dole is a double whammy. That’s something chief ministers like Nitish Kumar should think about while they bask in the adulation over moves like prohibition.