MGNREGA Design and Implementation

MGNREGA Design & Implementation 1

INTRODUCTION

Diganta Roy, Devendra Dave

MICA

MGNREGA Design & implementation 2

Sr. No Topics Page Number1 Introduction 32 MGNREGA Until Now 43 Problems with the scheme 5

4 What are the main causes for the problem 75 key approaches to resolve the problem 86 Conclusion 97 Annexure-I 108 Annexure-II 119 Annexure-III 1210 References 13

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INTRODUCTION

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) came into existence

in the year 2006. It is a scheme that is sponsored by the Central Government and its major

objective is to provide livelihood security to the poor people living in rural areas. MGNREGA

aims at providing minimum 100 days of wage employment to the rural poor. The work provided

is primarily unskilled manual work.

The Act broad objectives are as follows:

1. Improve the livelihood security of the poor by providing him with manual unskilled work

that builds the infrastructure of the beneficiary area.

2. Aim at harnessing the natural resources of the area along with making the population a

more productive population

3. Empower women by providing 1/3 of reservation from all the beneficiaries.

During the five year period from 2008-2013, a total amount of Rs 36420 crore was invested

under the MGNREGA program. The major purpose of studying MGNREGA is to understand the

overall impact of the scheme. A huge amount of resource was invested in program

implementation and it is essential for the Government as well the policy makers to understand

the overall impact of the program after 9 years.

MGNREGA scheme has been a partial success. As per the data shared by Jayati Ghosh-Professor

of Economics Jawaharlal Nehru University stated that over 50 million household have been

covered under the scheme at quite a low government expenditure that comes to 0.3% of total

GDP. Majority of the beneficiaries are women with about close to Half are either Dalits or

Adivasis. The reason for its partial success is that the program has been plagued by corruption ,

less number of poor districts covered and lower budget allocation to the program.

The structure of the paper is as follows

1. Introduction of MGNREGA explaining when it came into existence, the purpose behind

its existence

2. In introduction, briefly explaining about the success of the program.

3. Analyze the 10-year impact of the program.

4. Analyze the reasons for the partial success of the MGNREGA scheme.

5. Recommendations on the future implementation of the scheme

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The paper will not only help us understand the current impact of the scheme but will also help us

analyze where the scheme can be improved to have a long term economic benefit.

MGNREGA Until Now

The Eleventh Five year plan had estimated that India would have nearly 30 Crore people living

below poverty line, and that the number of people below poverty line had in fact increased in

most states of India. As of today, MGNREGA covers all of rural India.

Performance Parameters:

The brief expenditure report and some performance parameters are presented at ANNEXURE-I.

The amounts spent and the correlation between Number of households covered and the number

of poor people in that particular state. Out of the total release form the government of

Rs.23579.18 crores, out of that only Rs.18270.14 had been spent on wages, ANNEXURE-II..

This gives an idea of the scale at which MGNREGA operates. In the financial year 2012-13, a

total of 4.16 Crore households were given employment and 141 crore persondays of employment

were generated

.

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Problems with the Scheme:

Looking Closely at the data we see that:

We can see that the actual spend on the scheme has not increased rather it declined in the last

year. Also looking at the graph below we see that apart from states like UP, Bihar, Maharashtra

and Odisha, all other states show positive correlation between the No. of households covered and

No. of poor.

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There is also the issue of mismanagement of funds, as funds were released by the center without

adjusting the unspent balance.

and excess release of funds by the government:

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What are the main causes for the problem (long term and short term)?

The main problem facing MGNREGA is the effective implementation of the program at ground

level. Some of the long term and short term problem classification are as follows.

Short term problems:

1. Inadequate Awareness

One of the major challenges is that a rural poor gets the right to demand for work for a

period of 100 days but the average number of workdays generated under this scheme is

less than 50. The main problems is that government has failed to generate enough

demand under this scheme. During the period of 2009-2010 a severe drought year only

54 days of work per household was generated. People have no awareness about the basic

facilities under MGNREGA such as job cards, minimum wage account, and

unemployment allowance. One of the plausible solution to the problem is training the

government officials so that they can create awareness among the rural population.

2. Discrimination

“This scheme has facilitated people to earn their income without any gender bias or

discrimination. But a large number of cases have been reported of discrimination from

backward regions of the country. Woman are told that work meant under the scheme is

not meant for them since it involves hard labour. Thus Government needs to work at the

grassroot level to solve the problem of discrimination.”

Long term Problems:

1. Unplanned implementation of the scheme: Other than the Karnataka and West

Bengal panchayat the other panchayats in the country have no experience in

implementing such a large level scheme such as MGNREGA. Central and State

government representatives stated that the entire budget of Rs 40000 crore spent on

the program can be better used with a proper structural implementation to the

program.

2. Difficulty in financing the scheme: The budget set aside for financing MGNREGA

started with a total allocation of Rs 11300 crore in the year 2006-2007 as is currently

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estimated at about Rs 35000 crore. But the decrease in tax-GDP ratio over the years

has proved to be major roadblock in financing the scheme.

Tax-GDP Ratio

2007-2008- 0.12

2010-2011- 0.10

2015-2016- 0.09

3. High Level of Corruption

“It has been clearly revealed by statistics that due to high level corruption a very

minimal amount reaches the worker. Bribes as high as Rs 50 are paid in order to

procure a job card.”

Other cases of corruption are fake muster roll entries, over writing, false name etc.

key approaches to resolve the problem (such as policies and programs)

1. To avoid payment delay- To ensure that the payment to the rural area is given on time,

an SMS alert is being setup . This will allow to constantly keep a check on the muster as

to whose payment is made and whose is remaining. This idea has already been

implemented in the year 2014 and has shown significant results. For instance Timely

payment increased from 28% in 2014 to 70% in 2015. [Reference Link -

http://nrega.nic.in/Netnrega/WriteReaddata/Circulars/1048MGNREGA_round_up14_15.

pdf]

2. Protection of the entitlements of rural workers:

Government is looking to regularly contact Rozgar Diwas atleast once in a month to

address the grievances of the workers such as Job card,minimum employment allowance

etc. Structured Planning- According to the government report of MGNREGA round up of

2014-2015 and way ahead of 2015 new work areas have been identified for execution

during 2015-2016

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Source for the table

http://nrega.nic.in/Netnrega/WriteReaddata/Circulars/1048MGNREGA_round_up14_15.pdf

Conclusion:

We see that massive amount of funds have been pumped into MGNREGA over the past

few years, and due to a multitude of factors like ineffective delivery of funds, inefficient training

of manpower managing the operations, release of excess funds from the central government and

corruption among the contractors, the efficiency of the scheme has been severely affected.

Inspite of pumping in nearly 156000 crores the improvement in the number of poor has not been

improved to a desirable extent.

It is our suggestion that, instead of concentrating entirely on temporary employment of

100 days per family, the huge amount of investment going into the scheme can be used to plan

out some modifications where there is development of a skill building center in the villages and

thereafter some assistance in setting up their own cottage industries. This will not only prove to

provide them employment in the short run, but would make them self sufficient in the long run as

well. But the implementation and planning of such an elaborate plan needs commitment and

extensive planning and coordination among the Village Panchayats, State governments and the

Center, but it is beneficial in the long term to develop permanent capabilities for the rural poor

then try to feed them on a daily basis by spending lakhs of crores as per the current plan of

implementation.

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ANNEXURE - I

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ANNEXURE - II

ANNEXURE-III

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References

1. Aggarwal, H. (2010, February 9). National Rural Employment Guarantee Act - A review.

Retrieved November 25, 2015, from http:/www.policyproposalfor india.com/article.php?

article-id=169&languageid=1

2. LJ, C., & J.M, V. (2012, June 1). MAHATMA GANDHI NATIONAL RURAL

EMPLOYMENT GURANTEE ACT, 2005 (MGNREGA): ISSUES AND

CHALLENGES. Retrieved November 25, 2015, from http://www.ijmra.us/project

doc/IJPSS_JUNE2012/IJMRA-PSS1123.pdf

3. CAG Report no-6 of 2013. (2013, April 23). Retrieved November 25, 2015, from

http://saiindia.gov.in/english/home/Our_Products/audit_report/Government_Wise/

union_audit/recent_reports/union_performance/2013/Civil/Report_6/Report_6.html

4. MNREGA Report to the People. (2013, February 2). Retrieved November 25, 2015, from http://nrega.nic.in/netnrega/WriteReaddata/circulars/Report_to_the_people_English2013.pdf