Making MGNREGA work

Shortcomings such as delayed payments must be fixed

The government’s flagship rural employment initiative under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) set several performance records in 2020-21, thanks to the pandemic-driven reverse migration, which caused a huge surge in demand for jobs in rural areas. Yet this massive programme has failed to shed its unenviable image of being an unwieldy and inefficient provider of productive employment. Many of the problems with the scheme since its inception in 2005-06 have continued to mar its performance despite liberal funding and other support from both the Centre and state governments during this period.

The most glaring drawbacks that have tended to endure are the delay in paying wages, lack of any recompense for belated payment, and an absence of a grievance redress mechanism. Besides, the works carried out under the project are often imprudently planned and poorly executed to ultimately lead to poor asset creation and meagre returns on the huge investment. The project, thus, remains just a sustenance-oriented safety-net for the poor without turning into a catalyst for socio-economic development in rural areas — which, potentially, it could. Indeed, the time lag in the disbursement of wages, which often exceeds a couple of weeks, defeats the very purpose of launching this welfare scheme — to provide some immediate financial succour to jobless workers.

Even the focused attention on this aspect could not ensure prompt payments of wages. This is clear from the fact that despite the highest-ever allocation of Rs 1.1 trillion in FY21, including the record Rs 78,000 crore earmarked specifically for wages, more than Rs 17,000 crore was carried forward to the subsequent financial year as unpaid dues. Going by the findings of an earlier (2018) survey of this programme, conducted by LibTech India, an organisation of social scientists, engineers, data scientists and activists, workers normally spend a third of their weekly MGNREGA wages on withdrawing money from their banks. Many of them need to make multiple visits to the banks to encash the cheques. On the upside, observed during the ongoing pandemic, a record 7.8 million households got their full quota of 100 days of employment. The average duration of employment per worker during the year also swelled to 52 days, against the past five years’ average of 40 to 42 days.

On the whole, about 110 million persons got employment for varying durations under the MGNREGA, which is the maximum since its launch. The total work generated under it, about 3,900 million person days, is another record. These achievements, even if for a limited period and under extraordinary circumstances, cannot be totally brushed aside. These have at least validated the MGNREGA’s capacity to organise mass-scale wage employment to meet special contingencies. But to sustain this tempo, as also to get rid of the delays and refurbish its image, the MGNREGA would need to undergo some well-advised structural and operational reforms. For one, the mechanism of wage disbursement needs to be simplified with payment-outlets being closer to the workers’ residences or worksites. This programme also needs to be integrated with other ongoing employment-intensive activities, such as infrastructure construction, soil and water conservation works, and providing piped water to rural households.