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  • ‘Budget cut is part of a larger effort to disrupt rural jobs’

Nikhil Dey: ‘If there is corruption, act against the corrupt, the officials’

‘Budget cut is part of a larger effort to disrupt rural jobs’

Civil Society News, Gurugram

Published: Mar. 29, 2023
Updated: Apr. 28, 2023

Is the national scheme for guaranteeing rural employment becoming dysfunctional? Activists believe it is and especially so after this year’s budget cut because there won’t be money enough to pay accumulated dues or to fund 100 days of work in the year ahead as stipulated under the Mahatma Gandhi National Rural Employment Guarantee Act.

While the recent cut in funds is the immediate problem, the scheme has been under constraints such as delayed payments from the Central government to the states and the use of online technology for identity verification which fails as a result of poor connectivity in remote villages.

Lack of funds, delayed payments and technological challenges mean that fewer people now turn up for work when the original idea of the scheme was to enable people to easily find manual work close to them in villages and, by adding to incomes, stimulate the rural economy.

Supporters of the scheme say it has been a lifeline for the rural poor. It was particularly impactful during the pandemic and the lockdown that followed. Over the years, local rural assets like tanks, bunds and roads have been created.

But the scheme carries the burden of its political legacy, having been passed by the Congress-led UPA government in 2005. While the law stays in place, obstacles slow down demand for jobs and finally show up the National Rural Employment Scheme (NREGS) as a failure.

The law came out of a broad-based campaign in which the Mazdoor Kisan Shakti Sangathan (MKSS) played an important role. They remain closely engaged with NREGS. To get a bottom-up view of how NREGS is faring, we spoke to Nikhil Dey of the MKSS.


Q: How do you see the cut in the Union budget for NREGS?

The cut should not be seen in isolation but as one in a series of measures. What makes the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) under which NREGS comes, unique is that it is not a budget-restrained law. Money has to be made available as per demand. The government has sought to control the programme by imposing budgetary constraints. It’s totally inimical to the law. 

The finance minister is paying lip service to MGNREGA when she says that the cuts don’t imply that the budget has been constrained, and that the Centre always gives money at the time of the revised estimates. The revised estimates come at the end of the financial year, three months before the Budget, which means nine months have passed.

The government says post-pandemic there is not much demand for jobs under NREGS and that there has been economic recovery. But if you were to give 100 days of work to the people who are coming to work as of today you would actually need Rs 2,78,000 crore. And if you were to give them 40 or 50 days of work, which is what you are actually giving them on average, you would need Rs 1,28,000 crore. So, the Rs 60,000 crore budget (allocation) is going to yield just 20 days of work at the most.

Now in those 20 days of work, every year you end up with Rs 20,000 crore in pending liabilities from the previous year. So, you actually end up with a NREGS budget of Rs 40,000 crore. Where do you distribute Rs 40,000 crore in a country where you need Rs 1,28,000 crore to just continue with today’s constrained number (of people seeking work). How do you wait for revised estimates that come nine months later? It’s not even one month of work.


Q: Why do you think this is happening?

This year’s budget cut is the most severe and actually equivalent to killing the programme itself. There are some other factors which show you it’s part of a pattern. In the last one year they have not given West Bengal even one rupee. For a year and three months nobody has received payment in the state. West Bengal used to have 10 percent of the NREGS workforce and about 10 percent of the budget. About Rs 1,000 crore was spent in the state.

They are saying there was corruption. If so, then they should be taking action against the corrupt, the officials. Instead, they are punishing workers who came to work to their sites. Basically, they’ve been using every excuse in the book to not give money.

Secondly, they’ve used the tool of social audit to deny funds. They’ve written letters everywhere saying we won’t even consider your labour budget unless you do full social audits. Ironically, they are supposed to fund the social audit units. But those social audit units are not being funded. So, they have created a Catch-22 situation.

Third is the use of technology mechanisms. They have put this ridiculous app right across the country where twice a day they say photos have to be uploaded online from hundreds of thousands of remote work sites all over. If you don’t upload photos of each worker, then that person does not get that day’s attendance.

You can imagine what a negative factor this is for the worker. You walk three to four kilometres to the site, then do the work. If the morning’s attendance does not get uploaded, you won’t get paid. Some workers find out only weeks later when they are not paid. They’ve gone to work for 10 days and they get paid only for seven days. Some are turned away from work because the app is not working.

This National Mobile Monitoring System has made it a nightmare for people because they don’t know whether their photos have been uploaded and it’s completely arbitrary.


Q: So there are multiple assaults to disrupt the NREGS?

Giriraj Singh (the rural development minister) has said they are going to propose an amendment to MGNREGA that says the states should pay 40 percent of the labour budget. Now MGNREGA clearly lays down that 100 percent of the labour budget will be borne by the Centre along with 75 percent of the materials budget. That’s the condition under which the act came into force so to propose this is like repealing the act.


Q: Since the states don’t have the funds, will it render MGNREGA non-functional?

Completely. The states will say they don’t want to do this. But the law did not come in this way. It came in with the provision that the Centre will fund it. This (amending the law) is like repealing the law.

Finally, they’ve passed an order effective from February 1 saying that anyone who is not on an Aadhaar-based payment system will not be paid. Now that means having an Aadhaar card which is linked to your job card and then linked to that bank account which is linked to NREGS payments which is mapped on the National Payment Corporation of India (NPCI).

On the day they put this order into effect only 43 percent of NREGS workers were thus mapped. That means 57 percent or more than half of NREGS workers will not get paid. The Supreme Court has said that delayed payment is a human rights violation and a violation of Article 23. But this is not just delayed payment. This is denial of payment to the poorest workers who need daily wages.


Q: What is the current demand for NREGS work?

There is a constant demand. It should not be budgeted in nominal budgetary terms but looked at as a percentage of the GDP. Because if we are saying the GDP is growing then a percentage would show roughly how much you should need and give you an idea if NREGS demand is actually coming down.

In the beginning it was roughly 0.4 percent of GDP. The only year it crossed to 0.5 percent was the year of the pandemic. They had no choice but to turn to rural employment guarantee and they put in an additional Rs 40,000 crore. The MGNREGA budget went up from Rs 73,000 crore to Rs 1,13,000 crore. That year the demand was the highest.

Now, instead of MGNREGA being demand-driven it is being turned into a supply-driven law. If you give more money, people turn up for work. If you don’t give money and delay payments, making them wait for the next year, you are asking them to do other things. The demand is huge from what we see everywhere but people are not given their dated acknowledged receipts.

There is huge demand post-Covid which is not being met. MGNREGA has brought women into the workforce. When you cut funds, you are hitting them the most. This was their only means of returning to the workforce again.


Q: The government and its votaries claim they are building rural infrastructure and so a rural job guarantee scheme is not needed or needed less. What is your opinion?

These are assertions which have no basis in reality. If you increase the drinking water budget or the housing budget, you hardly generate any labour demand. Around 90 to 95 percent of the budget (in such schemes) is spent on materials. Already the housing budget is going into MGNREGA so you might marginally increase labour. Drinking water is again a very material intensive budget.

The Central government asserts that the economy is doing very well. The whole budget is what they call capex. The problem is they don’t see work done under MGNREGA as a rural infrastructure building programme. Why is a small check dam not capex? Why are rural roads not capex? Because your big contractors are not making money since MGNREGA has a ban on contractors.

Your only priority are big highways, plants, airports and bullet trains which only benefit a certain class. Their wealth increasing means the GDP is going to one segment. All they need to do is put more money into MGNREGA. If it gets saved at the end of the year, use it elsewhere.


Q: One of the successes of the rural job scheme has been to create rural infrastructure, isn’t it?

The Economic Survey had a whole segment saying MGNREGA is producing fine assets in certain areas. That is true. MGNREGA doesn’t just build check dams or a road or a water-harvesting structure or change wastelands into forests or re-green pastures. MGNREGA also changes non-arable land into arable land. In Jharkhand, there is digging of wells. A lot of horticulture activity is taking place. Individual productive assets, apart from housing, are being created.

The Economic Survey is recognizing all this. But the rural development minister is saying there is huge corruption, it’s terrible, it’s a wasteful programme. The trouble is that those responsible for implementing MGNREGA don’t seem to believe in it. Although this is a law passed unanimously in Parliament.

They keep saying it’s created lazy people, that it is not productive. MGNREGA is the only programme in the entire government where people are paid per output. They are not paid a daily wage but as per output. Which government servants are paid as per output?


Q: How can technology be used more effectively?

Disbursement of money is through DBT (direct benefit transfer) into bank accounts. It is working. Now suddenly they have introduced this additional technology into Aadhaar, a kind of dictatorial technology monster because you have no choice. When you say technology does not offer options then you are being anti-science and anti-technology. This technology is causing huge pain. Since 50 percent of workers won’t get paid, it becomes direct pain technology.

Pensions in Rajasthan, for instance, are also being disbursed into bank accounts (through DBT). Around nine million pensioners are getting their pensions. There is going to be a pension law in the new budget of Rajasthan of `1,000 pension with a 15 percent increment.


Q:  Is it the several layers of technology that is creating this chaos?

There are two issues for that. Money goes into bank accounts and it always has. Uploading a photograph does not mean the person has worked. What is happening is that twice a day people come, take photographs and go home. You are not measuring productivity through that photo. The best possible method is to make everything open to the community. They know who comes to work and who gets paid. Make MGNREGA a community monitored system.



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