Budget 2019: 'Anything Less Than Rs 88,000 Crore for MGNREGA Is Insufficient'

The Modi government allocated Rs 60,000 crore for the scheme in the interim budget announced on February 1.

New Delhi: If the government’s flagship programme to address rural poverty, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is to be made effective, it would need an annual budgetary allocation of Rs 88,000 crore for the financial year 2019-20. That is Rs 20,000 crore more than the Rs 60,000 crore assigned for it in the interim budget announced on February 1.

“Any budget less than Rs. 88,000 crore will be insufficient to meet even projected demand for work and the timely payment of wages,” noted the Mazdoor Kisan Shakti Sangathan (MKSS). The social movement and grassroots organisation best known for its successful campaign for the Right to Information Act under the leadership of Aruna Roy argued that unpaid dues to workers under the scheme have already risen to Rs 7,568 crore and the amount “is only going to increase by the close of the financial year.”

“This means that even before the start of the new financial year in April (2019-20), the programme is effectively left with a budget of Rs 52,000. The true picture of funding for MGNREGA is, therefore, deliberately masked in the high-pitched budget announcements made in Parliament. The vicious cycle of pending liabilities and the mounting fund crunch can only be broken if the budget allocation for MGNREGA is substantially increased,” it stated.

Also read: Education and Employment Drew Blanks in the Interim Budget

The Union budget presented in February 2018 made an initial allocation of Rs 55,000 crore for the financial year 2018-19. The amount was exhausted before January 2019. “Owing to mounting pressure and criticism from MGNREGA workers, citizen campaigns and Members of Parliament, an additional Rs 6,084 crores was allocated to honour legal commitments to the programme. However, it is unclear whether this amount has been released to states yet. In this context, the finance minister’s announcement of an allocation of Rs 60,000 crore to MGNREGA for 2019-20 yet again demonstrates a lack of intent and commitment to implement the MGNREGA in letter and spirit,” the statement said.

The MKSS press statement, issued on February 3, also underlined, “As per sample independent studies, the actual wages paid on time in 2017-18 is likely to be around 32 per cent instead of the figure of 85 per cent presented by the government.” Punching holes in the government’s claims, the organisation said that in spite of repeated pleas to the Ministry of Rural Development, which implements the scheme in collaboration with the states, “it hasn’t recorded or displayed delays that occur at its level, or that of the payment agencies (which it is responsible for).”

“Two independent studies, using government’s own data have shown that for the first two quarters of FY 18, rather than the figure of 85 per cent wages paid on time, the actual ratio is likely to be closer to 32 per cent, if central government and payment agencies delays are accounted for. The situation usually worsens in the last two quarters of each year as the meagre allocated funds get exhausted by then.”

Since the government hasn’t calculated the full extent of delays, the full amount of compensation owed to workers is also not calculated. “The accountability of the central government and payment agencies has not been fixed despite repeatedly pointing it out. Even for the limited amount of compensation that is currently getting attributed only to various state governments, owing to the Centre’s false definition of what constitutes as ‘delay’, at the rate of 0.05 per cent per day of delay, amounting to a total of 1,898 crores (since December 2013), less than 4 per cent has actually been paid to workers.”

Also read: Modi Launches a Startling Pre-Election Budget, Massaged by Creative Accounting

The pending liabilities of wages during the last seven financial years have stretched from 10% to 35%.

MKSS also demanded that MGNREGA wage rates be brought at par with state minimum wages in line with constitutional commitments and as various committees of the MoRD has repeatedly recommended. “At the very least, wages should be indexed to inflation as per the Consumer Price Index of Rural Labour (CPI-R).”

The activists highlighted that though the demand-driven rural employment scheme is clear that the gram sabhas are to determine the quantum and type of works to be taken up in a given year, “this has been relentlessly abused by different state and central governments. The projected person-days that emerge from such bottom up planning are examined at the central government level and are being reduced to an illegal concept called ‘approved labour budget’, which is contrary to the spirit of the Act.”

At a time when rising unemployment and declining farm incomes have led to severe rural distress across the country, the group said, effective implementation of the MGNREGA has become even more necessary.

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