Though she was passionate about freeing the animal spirits of rural India, finance minister Nirmala Sitharaman was conspicuously silent about the one scheme that had the potential to put more money in the hands of job-stressed rural folk: Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS).
A closer look at the Budget 2020-21 documents would explain the finance minister's silence. The allocation for MGNREGS has been pegged lower than last fiscal. Last fiscal, the Centre had transferred Rs 71,002 crore to the states. This time, Sitharaman had budgeted only Rs 61,500 crore.
The relevance of MGNREGS cannot be overstressed. As per the 2011 Socio-Economic Caste Census, 51 per cent of the households in the country depend on casual manual labour for income. There is increasing demand for unskilled work in rural areas and MGNREGS can answer the need.
Initially, the BJP dispensation was not enthusiastic about MGNREGS. It was considered an unproductive dole out. By the second year, in the 2015-16 Budget, there was a step up in allocation in real terms. With the opening of Jan Dhan accounts, payments were made directly to the accounts of the beneficiaries. Demand for work had even picked up.
However, in the last five years the allocation has been abysmal. One-sixth of each year's allocation are pending wage payments from previous years. Entitlements of most states have not been released by the centre since October. For instance, nearly Rs 1,200 crore is due to Kerala.
The general consensus was that MGNREGS allocation, considering that a part of the allocation goes to paying the previous year's wages, should not be less than Rs 1 lakh crores.
Delayed payment of wages was already affecting the functioning of MGNREGS. In fact, the Economic Survey that came out last fiscal was highly vocal about the need for timely wage payments. “For a workforce programme to effectively alleviate distress, timely payment of wages is critical,” the report had said.
The states have already informed the Centre that delays in payments could drive genuinely distressed farmers away from MGNREGS, forcing them to take up highly exploitative jobs. It is also felt that improvements in the targeting of MGNREGS to genuine beneficiaries could increase the demand for work from distressed workers, thereby effectively realising the objective of the programme.
