Centre proposes renaming MGNREGA to VB-G RaM G, to change funding pattern

The Centre has proposed renaming MGNREGA as VB-G RaM G, raising guaranteed workdays to 125 and shifting the funding pattern to 60:40, drawing criticism over diluted worker protections

The Union government has decided to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the flagship social-welfare scheme, 20 years after it was enacted, providing for a piece of legislation with a higher number of mandatory work days and altered funding norms.

 

The number of mandatory work days has been proposed to be increased from 100 to 125 and the ratio of funding between the Centre and states will change to 60:40 under the new law as against the existing maximum of 90:10.

 

The new law will be called the Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (GRAMIN), or VB- G RaM G.

 

According to critics, the changes, circulated in the form of a draft Bill, empowers the central government to decide in which parts of the country it wants the scheme to run and allows the states to stop the scheme for two months of their choice during the peak harvest season.

 

“The MGNREGA establishes a statutory right to work that is demand-driven and universal, ie any person willing to do unskilled manual work in any rural area must be provided work,” said the NREGA Sangharsh Morcha, an umbrella of people’s movements.

 

“But under the VB-G RAM G Bill, Section 5(1) states the State Government shall, in such rural areas in the State as notified by the Central Government, provide to every household whose adult members volunteer to do unskilled manual work, not less than 125 days of guaranteed employment. Therefore, if a rural area is not notified by the Centre, there is no right to work for the people of that area, effectively reducing universally guaranteed employment to any other scheme run at the mercy of the Union Government,” the NREGA Sangharsh Morcha added. 

 

The draft Bill said the state governments would notify in advance a total of 60 days (may not be continuous) in a financial year, covering the peak agricultural seasons of sowing and harvesting, during which works under this new Act would not be undertaken.

 

Defending the changes, an FAQ (frequently asked questions) circulated by the government on the draft said that “the scheme had been transformed into a central-sector one from a centrally sponsored scheme because rural employment was inherently local and states would have to share costs and responsibilities. It will also be better incentivised to prevent misuse and ensure that development plans are tailored to meet regional conditions through gram panchayat plans. The Centre retains the standards while states execute plans with accountability and this partnership model improves efficiency and reduces misuse”.

 

On the 60-day “no-work period” during the peak farming season, the FAQ said it would ensure labour availability during sowing or harvest; prevent sharp wage increases, which raise food prices; and ensure that workers naturally shifted to agriculture, which paid higher seasonal wages.

 

“60 days is aggregated, not continuous while workers still get 125 guaranteed days in the remaining ₹300 days. Thus farmers and labourers both benefit,” the FAQ said.

 

Nikhil Dey, founder member of the Mazdoor Kisan Shakti Sangathan (MKSS) and National Campaign for People’s Right to Information (NCPRI), told Business Standard that the biggest achievement of the MGNREGA was that it made minimum wages a reality because casual labourers had an option if they did not want to work at a certain rate.

 

But the changes proposed in the draft diluted this and opened the door for exploiting workers, he said.

 

Dey, who has been associated with the MGNREGA from its inception, said the draft changes killed all the legal entitlements that the Act had provided and made it an allocation-based scheme.

 

The Bill empowers the Centre to make normative allocations to each state. Allocations are to be estimated based on parameters prescribed in the rules. Further, expenditure in excess of the approved normative allocation will be the responsibility of state governments.

 

“This effectively enables the Union government to arbitrarily decide the amounts to be allocated to states, which, in turn, will determine how many days of employment can be provided in that state. This completely upends the logic of the MGNREGA, where funding follows demand to a supply-driven system where demand must conform to a predetermined budget,” the statement of the NREGA Sangharsh Morcha said.

 

On this the FAQ said normative funding aligned the scheme with the budgeting model used for most projects of the Government of India without reducing the employment guarantee. It said a demand-based model led to unpredictable allocations and mismatched budgeting.

 

“Normative funding uses objective parameters, ensuring predictable, rational planning while still guaranteeing that every eligible worker receives employment or unemployment allowance,” the FAQ read.

 

The draft said expenditure under the scheme would depend on the number of persons reporting for work, wage rates, and the material and administrative components of the work.

 

“If the legislation is implemented across the country, the total estimated annual requirement of funds on wage, material and administrative components is ₹1,51,282 crore (more that ₹1.51 trillion), including the state share. Of this, the estimated Central share is ₹95,692.31 crore,” the draft read.

 

Currently, the central government bears the entire cost of wages and also 75 per cent of material expenditure. States pay the rest. However, states have the option to take a maximum of 10 per cent of material expenditure.

 

“Today, expenditure under the MGNREGA in, say, a state like Rajasthan is around ₹10,000 per annum. The big question is with the changed funding pattern, will states bear 40 per cent of this expenditure,” Dey asked.

 

On this the FAQ explained that the 60:40 funding ratio would not burden states financially and the structure was balanced and sensitive to state capacity.

 

Critics said that draft Bill diluted the existing prohibition on using contractors. The kind of works that could be done under the scheme has been handed over to the Centre instead of the current provisions of states determining them, they added.

 

Also henceforth, according to the draft, all unemployment allowance and delay compensation will be paid by the states and Centre will not have much role in it, they said.

 

“It is essential that rural infrastructure creation must transition from fragmented provisioning to a coherent and future-oriented approach and it is also essential that resources are distributed in a fair manner to reduce disparities and promote inclusive growth across all rural areas of the country based on objective parameters,” the statement of objective of the draft Bill said.

 

The NREGA Sangharsh Morcha said workers’ organisations had repeatedly highlighted widespread exclusions resulting from the imposition of “opaque, arbitrary technologies” like digital attendance (NMMS) and Aadhaar-based payment systems (ABPS).

 

Despite this, the new Bill seeks to introduce a framework rooted in top-down, technology-driven surveillance by mandating the use of biometric authentication for workers and functionaries as well as the use of geospatial technology and geo-referencing of works.

 

The MGNREGA was notified on September 7, 2005, initially covering 200 districts in the first phase from February 2, 2006. This was then extended to 130 districts 2007-08 (113 districts were notified with effect from April 1st 2007 and 17 districts in Uttar Pradesh were notified with effect from May 15, 2007).

 

The remaining districts were notified with effect from April 1, 2008. Since then, the scheme has covered the country except districts that are entirely urban. 

Key proposed changes 

• Centre-state funding split to shift to 60:40 from the maximum 90:10 currently
• Statutory guaranteed wage employment of 125 days in a financial year from 100 days under MGNREGA
• States can notify up to 60 no days of work in a financial year during peak sowing and harvesting seasons
• Total outlay under proposed scheme estimated at ₹1.51 trillion; of which, Centre’s share pegged at ₹95,692 crore
• Centre can notify any area where 125 days of work can be undertaken
• Proposed move shifts the scheme from a central sector to a centrally sponsored programme