What it will take to rejuvenate NREGS

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) mandates the Indian State to provide 100 days of work to every adult rural citizen within 15 days of raising the demand and be paid within the same period on completion of the work. It has served as a lifeline for the poorest and helped deal with abject poverty and hunger.

During the Covid-19 pandemic, NREGS was the only fallback employment option for the rural masses. A study conducted by the Centre for Sustainable Employment at Azim Premji University, spanning 2000 households across eight blocks in Bihar, Karnataka, and Madhya Pradesh, revealed that in some cases, NREGS helped pare up to 80 per cent of the loss in income due to lockdown.

Government data for financial years 2020–21 and 2021–22 show that the total spending under MGNREGS was Rs 1.11 lakh crore and Rs 1.06 lakh crore, respectively. While 11.19 crore workers from 7.55 crore households worked in 2020–21, 10.62 crore workers from 7.26 crore families worked under MGNREGA in 2021–22.

MGNREGS has nearly 17 crore formally registered households, with members from approximately 10.3 crore families working in MGNREGS over the last three fiscal years. However, in 2022–2023, the overall budget allocations were cut to Rs 73,000 crore, reducing the scope of employment. As a result, only 7.7 crore workers from 5.5 crore households could avail themselves of MGNREGS work in 2022–2033. Also, only 13.69 lakh households completed 100 days of employment as of January 9, 2023, compared to 59.2 lakh households accessing 100 days of work in 2021–22. Despite the drop, about 70 per cent of the budgeted amount was utilised in the first 6–7 months of the programme. In the absence of a supplementary allocation, there is now a significant delay in the processing of wages from
the Centre.

The government should ensure the adequacy of budget allocations to ensure smooth operations next year. They should consider at least 10.3 crore active job-card-holding families while drawing up the budget estimates for 2023–24.

To start with, the government must allocate a minimum of Rs 1.5 lakh crore to ensure that 10.3 crore households can work for at least 50 days. The current per person, per day average wage payment is Rs 217, and it can be assumed that it will climb to Rs 225 in the next financial year, after wages are revised (accordingly, the wage, material, and administrative expenses will also increase). This is the least the government should be ready for, even though the need is likely to be higher as more households are expected to register under NREGS in 2023–24.

To rejuvenate NREGS, the government must make payments on time and revise the wages to respectable levels. Hitherto, NREGS has not been able to unleash its true potential owing to several issues, including delayed payments and low wage rates.

About Rs 7,700 crore is yet to be disbursed (including both wages and material), out of which Rs 4,447 crore is pending in wages, the government said in response to questions in Parliament recently. Furthermore, it should be noted that the notified wage rates for states are lower than the current agricultural minimum wage in many states. Payments must be released on time, as earned wages lead to dignified living for the workers.

Following are a few suggestions and recommendations to make MGNREGA effective:

The Centre should allocate at least Rs 1.5 lakh crore as a budgeted estimate to maintain adequate funds to meet requirements at the grass-roots level. Increase NREGS wage rates to at least the state’s agriculture minimum wage or Rs 375 per day as recommended by the Anoop Satpathy Committee, whichever is higher.

Ensure that compensation for delays in wage payment is paid to the full extent, i.e., from the end date of the muster roll until wages are credited to the workers’ accounts to comply with the Act and Supreme Court orders.

Ensure that social audits are strengthened with timely and adequate funds in all the states.

The sustained efforts led by civil society groups have significantly contributed to the formulation of the Act. And civil society continues to play a significant role in raising the issues of NREGA implementation. It is critical that the Union government consult with relevant members of civil society organisations and include the necessary steps in the Union Budget for the fiscal year 2023–24 to ensure the programme’s smooth implementation.

(The writers are part of the Welfare Thematic Team at the Azim Premji Foundation (Philanthropy))