Drought-hit Odisha, Andhra and UP in Urgent Need of Funds to implement MGNREGA

New Delhi: Come February 2, representatives of various states will visit Vigyan Bhawan in New Delhi for the “Mahatma Gandhi NREGA Sammelan”, the annual ritual that celebrates the one-of-a kind rural employment scheme of the Government of India – the MGNREGA.

However, along with sharing good practices for effective implementation of the scheme, it looks like representatives of at least 12 states will also highlight the need for the Centre to release more funds for its smooth functioning, unless the Union finance ministry immediately acts on a pending plea by the Union rural development ministry.

At present, Assam, Himachal Pradesh, Haryana, Punjab, Sikkim, Nagaland, Meghalaya, Chhattisgarh, Uttar Pradesh, Odisha, Kerala and Andhra Pradesh have a negative balance of MGNREGA funds for the current financial year, resulting not only in pending payment of wages of workers but also allegedly leading to denial of jobs to many in need, thus threatening the very nature of the demand-based legal employment guarantee of the scheme. Together, these states have 1.82 crore workers in muster rolls.

Also, importantly, three of these states – Odisha, Andhra Pradesh and Uttar Pradesh – are among the six drought-affected ones for which the Ministry of Rural Development has allowed the provision of additional employment of 50 days under MGNREGA.

In a press meet in New Delhi on January 6, Aruna Roy and Nikhil Dey – grassroots activists associated with the Mazdoor Kisan Shakti Sangathan (MKSS) – shared a December 30, 2015 letter sent by Union rural development minister Birendra Singh to Union finance minister Arun Jaitley, obtained through the Right to Information Act. The letter reminded Jaitley of his assurance in the last Budget speech to provide additional funds of Rs. 5000 crore to MGNREGA on the basis of the actual utilisation of funds by the States.

Singh wrote, “My ministry has released Rs.33, 448 crores to the states/UTs till date. Out of this amount, the states/UTs have spent Rs.31,830 crores (i.e. 95% of the amount) which includes states’ share of Rs. 1,771 crore. We are receiving a number of requests from the states for release of funds to liquidate the pending liabilities and smooth implementation of MGNREGA during the fourth quarter of the current financial year.”

This shortage of funds faced by the Mahatma Gandhi National Rural Employment Guarantee Scheme, launched by the UPA I Government in 2005 through an Act, is not new. Dey pointed out, “The fund starvation for MGNREGA began in the last years of UPA II, and peaked at the beginning of the NDA Government. It has resulted in a great crisis of credibility for the law, and distress for MGNREGA workers, as people didn’t get work as per demand, and faced inordinate delays in the payment of their wages.”

Hope came in the beginning of the 2015-2016 financial year with Jaitley famously announcing a little over Rs. 34,000 crore to the programme as the “highest ever budget allocation for MGNREGA” in his budget speech. Though the minister was wrong in his proclamation – the highest allocation was in 2010-11 at Rs. 40,000 crore – the good news was that he pledged another Rs. 5000 crore to the programme if required.

A note given to the media at the press meet, however, pointed out that “17% of the budget has gone in paying pending liabilities of wage and material payments from the previous financial year.” Dey mentioned, “This leaves around Rs. 29,000 crore as the actual allocation for employment generation in the current year.” While 10% of the budgetary allocation during 2013-14 was spent on pending liabilities from the previous year, it increased to 18% during 2014-15.

It looks like the budget allocation for the coming year too will also have to begin with liabilities, even if the Finance Ministry releases the additional sum of Rs. 5000 crore.

As per the calculations of the rural development ministry, state governments are in need of an additional amount of Rs. 6,300 crore, which means a deficit of Rs. 1300 crore. Roy also noted here, “Even though the Rural Development Ministry has allowed an additional 50 days of employment to workers in the drought affected states, there has been no increased allocation to take that requirement into account.” Instead, she says, “Job applications have been denied in several states to show low demand for the scheme.”

Both Dey and Roy strongly urged the Centre to “at the very least, immediately allot the additional sum promised for the programme.”

“If funds are not released to those states with negative balance, it means 1.82 crore workers will not get paid their wages at least till this April, some of whom are facing drought situations,” Dey underlined. Roy urged the Centre to “increase allocations even beyond the amount to the drought hit states to get a much-needed respite they require.”