Economists petition Modi against dilution of MGNREGA

Alarm bells on rural jobs guarantee law

A group of around 30 economists from India and abroad have written a letter to Prime Minister Narendra Modi, asking him to ensure there is no dilution or restriction of the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

They have argued the scheme has wide-ranging social benefits, beside creation of productive assets. They have said corruption was and remains a problem in implementation but experience shows this can be curbed. And, the gains achieved have been substantial and amply justify further efforts to make it a success.

“Against this background, it is alarming to hear of multiple moves (some going back to the preceding government) to dilute or restrict the provisions of the Act. Wages have been frozen in real terms and long delays in wage payments have further reduced their real value. The Act’s initial provisions for compensation in the event of delayed payments have been removed,” the letter said.

There have been reports that the rural development ministry has plans to scale down coverage under the programme to 250 backward districts, instead of the entire country as now.

The economists who wrote the letter include Dilip Abreu, professor of economics at Princeton University; V Bhaskar, professor of economics at the University of Texas at Austin; Jean Dreze, visiting professor at the department of economics in Ranchi University; Pulin Nayak, professor of economics, Delhi School of Economics and Sujata Visaria, assistant professor of economics at the Hong Kong University of Science and Technology.

The letter said the labour to materials ratio under MGNREGA is sought to be reduced from 60:40 to 51:49, without any evidence that this would raise productivity of works under the programme. For the first time, the central government has plans for capping MGNREGA expenditure by state governments, undermining the very principle of work on demand.

The economists point to signals from the government on an amendment aimed at restricting the scheme to the country’s poorest districts.

“This runs against the fundamental premise of the Act; gainful employment that affords basic economic security is a human right,” the letter said.

“We urge you to reverse this trend and ensure the programme receives all the support it requires to survive and thrive,” the letter said.

MGNREGA was enacted in 2006 by the previous UPA government, with the objective to provide a legal right for at least 100 days of unskilled wage employment in a year to willing adult members. Implemented initially in the 200 most backward districts, it was later extended in two phases to all over India.