Government Forms Panel to Investigate Efficacy of MGNREGA

More than 15 crore active workers are currently enrolled in the rural job guarantee scheme. File | Photo credit: the Hindu

The central government has established a committee to review the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, in particular to assess the effectiveness of the program as a tool for poverty alleviation. The committee, headed by former rural development secretary Amarjeet Sinha, met for the first time on 21 November 2022 and has been given three months to submit its suggestions.

The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005 and the demand-driven scheme guarantees 100 days of unskilled work per year for any rural household that wishes it. There are currently 15.51 crore active workers enrolled under the scheme.

The Sinha Commission has now been instructed to study the various factors behind the demand for MGNREGA work, spending trends and interstate variations, and the composition of work. It will propose what changes in focus and governance structures are needed to make MGNREGA more effective.

“MGNREGA was launched as a poverty alleviation tool for the rural region, providing them with a safety net in the form of guaranteed work and wages. It was felt that states such as Uttar Pradesh and Bihar, where poverty is more prevalent, have not been able to take full advantage of the scheme,” said a senior official who was aware of the developments.

In 2015, Prime Minister Narendra Modi had famously referred to MGNREGA as a “living monument of the failure of the Congress government”. In a speech in parliament he had said: “After being in power for so many years, all you could do was get a poor man to dig ditches for a few days a month.” The plan has also been criticized by economists such as Jagdish Bhagwati and Arvind Panagariya as an “inefficient tool for shifting income to the poor”.

Also read | Rahul digs at Modi for praise from MGNREGA

Higher costs

The current committee also addresses the argument that the cost of providing work has also shot up since the start of the scheme.

The committee should review the reasons and recommend ways to pay more attention to poorer areas. “An open-ended schedule like this will always show sharp contrasts. Bihar, for example, despite its poverty level, does not generate enough work to make a concrete difference, and at the other end of the spectrum, we have Kerala, which is better economically, but uses it to create assets. Although Bihar MGNREGA needs more, we cannot deny Kerala the money due to the current structure of the program,” explained one of the committee members.

Asset creation

MGNREGA critics also criticize the scheme for its lack of tangible asset creation. The committee is considering whether the composition of the activities currently included under the scheme should be changed. It will be considered whether it should focus more on community-based assets or on individual works.

With four months to go until the end of the financial year, ₹59,420 crore has already been spent out of the ₹73,000 crores approved for the scheme. The Ministry of Rural Development has recently requested an additional amount of ₹25,000 crore from the Ministry of Finance for projected fiscal year-end spending.

Despite all the criticism, MGNREGA acted as a crucial safety net during the COVID pandemic. In fiscal year 2020-2021, the number of working days provided under the scheme has increased dramatically to 389 crores, compared to last year’s figure of only 265 crore. Also in 2021-22, the demand for MGNREGA work remained high and 363 crore man-days of work was generated. According to current statistics, 196 crore man-days of work have already been generated this year.

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