Saturday, February 6, 2016

[Editorial # 59] A jobs scheme that steadied India : The Hindu

[Following editorial has been published in The Hindu on 6th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

It is now a decade since the Mahatma Gandhi National Rural Employment Guarantee Scheme was launched, and it can be said with reasonable assurance that the programme has been largely successful in living up to what it set out to do: provide employment to India’s rural poor and improve their livelihoods. Sceptics of the spending programme, launched in 2006, had raised concerns that it would be yet another opportunity for middlemen to pocket funds. They had dismissed the argument that the design of MGNREGS as a demand-driven scheme would make it more targeted and less prone to leakage. Ten years on, the sceptics have been largely proved wrong. Yes, the efficiency of implementation of the scheme varies across States, there is a degree of wastage of resources, there is an issue with delayed payments, works undertaken have not held up in some States, and there remains some information asymmetry leading to uneven implementation. Yet, by and large, study after study has found that MGNREGS has served as a source of employment for the poor in distress situations such as drought, crop failures and lean rural employment days. It has helped raise rural wages steadily over time, and in places where it has been implemented well, built rural assets such as irrigation canals and roads have augmented local infrastructure.

Yet, it is also evident now that over the last five years there has been sluggishness in MGNREGS’s implementation. There have been ups and downs in the Central outlay for the scheme, in terms of allocations as a percentage of overall budget spending and, most importantly, delays in releasing funds to States for wage payments. This has led to a relative slack in demand and consequently a drop in the work hours and even a decline in the average rural wage rate increases in these years. This is primarily because both the Congress-led UPA in its second term in government and the current BJP-led regime have been less than enthusiastic about the need for the scheme. Indeed, data show that only in the past year has the BJP government come around to realising its utility, even if grudgingly. Prime Minister Narendra Modi had remarked last year that his government saw MGNREGS as a symbol of the failures of the Congress governments, and that after 60 years, it was a travesty that we were “still making people dig holes”. These remarks symbolised, at one level, a flawed understanding of the scheme, and at another, a negative mindset about demand-driven welfarism. It took a distressed agrarian situation with the failure of the rabi crop and less-than-optimal rains for the MGNREGS to get its due, and the proportion of delayed payments was reduced in the first three quarters of 2015-16 from what it was in 2014-15. Even so, the implementation of the scheme has continued to be better in some States as opposed to even drought-hit States. It is clear that there needs to be a better political understanding of the need for and the efficacy of welfarism.

1. What are various features of Mahatma Gandhi National Rural Employment Guarantee Scheme?

2. How is MNREGA different from previous employment generation schemes initiated by the Central Government  in terms of their structure and success achieved?

3. What is the relevance of employment schemes like MGNREGS? How are such schemes linked to constitutional obligations of the Government?

4. What is meant by demand-driven schemes? What other kinds of such schemes have been implemented in India?

5. How has MGNREGS helped in addressing the issue of rural unemployment in India?

6. MGNREGS if implemented in letter and spirit could have brought a paradigm shift in generating rural employment but its success has remained below par. Do you agree? Justify

7. What have been the challenges faced by implementing agencies in implementing MGNREGS?

8. Welfare schemes must be delinked to politics for achieving desired objective. Comment (200 words)

9. Programs like MGNREGS could be effective in bringing in women empowerment and financial inclusion. Discuss (200 words)


  1. 1. The Mahatma Gandhi National Rural Employment Guarantee Act is an Indian labor law and social security measure that was promulgated under the NREGA Act 2005. It aims to provide the right to work and livelihood opportunities for people living in rural areas. It aims to provide at least 100 days of wage employment to every household in rural areas which has an adult member willing to do voluntary unskilled work. Through this the scheme aims to create livelihood opportunities as well as create rural assets in the form of infrastructure, irrigation, roads etc. Employment under the MGNREGA Scheme is a legal entitlement and if the mandated work hours or payment is not provided it can be legally contested by the applicant workers. The scheme was first implemented in 200 districts pin 2006 and has now been implemented in all the rural districts of India. The scheme is highly appreciated by several national and international organization, with the World Bank terming it as a "stellar example of rural development ", in its 2014 World Development Report. The scheme is to be implemented by the Gram Panchayats and the involvement of contracters is strictly banned. Moreover labour intensive activities such as creation of infrastructure for flood relief, irrigation and drought control are preferred. Apart from providing employment, livelihood and creating durable rural assets, the scheme could also contribute towards environmental protection and improvement and empowerment of rural women.The main features of the scheme are as follows:
    a) Every household's adult member is legally entitled to 100 days of work under the scheme.
    b) Wages are to be paid on a weekly basis and should not be delayed beyond a fortnight. The rates are to be paid according to the Centre-notified, state-specific wage list, and time and piece rates according to state-specific rates . Either way the daily wage should not be less that Rs.100.
    c) If an applicant is not provided with employment within 15 days of applying the state is expected to pay and unemployment allowance of one-fourth of the wage rate.
    d) Work is to be provided within 5km of the applicants place of residence . If not, a wage allowance of an extra 10 per cent of the wage is to be provided to meet the travel expenses.
    e) Men and women are entitled to equal wages for equal work done. one-third of the jobs are to be reserved for women workers and onsite facilities such as creches are to be provided at all the worksites.
    f) Financial inclusion is also an important component of the scheme. Since 2008, it is mandated that all payments of wages are to be made to the bank accounts or post office accounts of the beneficiaries. The Jan Dhan Yojana scheme could very well complement this provision of the NREGA Act.
    g) It also has a social security dimension as of 2008, wherein the scheme attempts to include the beneficiaries under the Janashree Bima Yojana ( a life insurance scheme for urban and rural poor below the poverty line or marginally above it) and also the Rashtriya Swastha Bima Yojana ( A Health Insurance Scheme for Below Poverty Line families).
    g) The MGNREGA Scheme is envisaged as a transparent and accountable government scheme. For this purpose all the accounts, documents and records pertaining to the scheme are to available for public scrutiny. Similarly, the use of intermediating contractors and machines is prohibited.
    h) The scheme is a rights based and a demand driven approach. This means that planning and provision of work programmes are determined on the basis of the demand for work. Hence workers are empowered to work as per their convenience and at their required time.

  2. 2. The MGNREGA Act has had several precursors which have attempted to provide food security and livelihood opportunities through public employment schemes. The government has previously launched schemes such as Jawahar Rozgar Yojana , Employment Assurance Scheme, Food for Work Programme, Jawahar Gram Samridhi Yojana and the Sampoorna Grameen Rozgar Yojana. Maharashtra was the first state to enact an employment guarantee scheme under Chief Minister Vasantrao Naik in order to provide relief to farmers who had suffered from the outbreak of two famines. Eventually the Planning Commmission approved this scheme and it was adopted on national scale. The main focus of the scheme was to provide employment in projects that aimed at the creation of durable assets such as irrigation facilities, re-forestation etc.. From 1960 onwards several new schemes were launched, reformed, abolished and reconstituted on the basis of lessons learnt and failures of these schemes. The Jawahar Rozgar Yojana launched in 1977 by merging the National Rural Employment Program and the Rural Landless employment guarantee program with the Centre and the States contributing funds in the ratio of 80:20. The Food For work Program was initiated in 2004 and provided food grains as compensation for tasks performed. In 1993, the Employment Assurance Scheme which provided employment to farmers during lean agricultural seasons. The Panchayat was empowered to work alongside the Zilla Parishad in the implementation of this scheme. In 2001, the EAS and the JRY were merged into the Sampoorna Gram Rozgar Yojana. One of the major drawbacks of all these schemes , were the sheer multitude of them. There were too many schemes that were implemented with similar goals and organizing separate fund outlays for each was both time consuming and costly. Morevover unlike the MGNREGA Scheme, none of theses schemes were a legal entitlement. In other words, non-provision of work or wages/ remuneration could not be challenged. This is perhaps one of the biggest reasons as to why these schemes failed to create an effective solution to unemployment and poverty, as there was no mechanism to ensure its implementation. In contrast, the MGNREGA is a legal entitlement and the recipients can challenge the non-provision of services. This is perhaps why it was more effective as it ensured government accountability and receptiveness which the other programs failed to provide.

  3. The MGNREGA is a wage employment programme. It was brought into life by the MGNREGA Act it was notified on 7th of September, 2005. The ultimate aim of the Programme is to provide livelihood to the rural unskilled labors. The Act covered 200 districts in the first phase and was extended to additional 130 districts.
    1.Right based framework- for any adult person from a rural household who is willing to do work.
    2.Time-it is for 100 days and depends on actual demand.
    3.Decentralized planning-a)Gram sabha to recommend;
    b)for execution 50%works are given by gram panchayats;
    4.Women Empowerment-1/3 beneficiaries should be women. Equal pay for equal work.
    5.Implementation-The state government is responsible for the implementation.
    6.Funding-Central government to cover 100% of wages of unskilled labor and 75% for of material cost of scheme including payment of wages to skilled and semi-skilled workers.
    State government to cover 100% of unemployment allowance and 25% of the remaining material cost of scheme including payment of wages to skilled and semi-skilled workers.