Budget 2021: MNREGA is vital but needs more govt attention


In a year of unprecedented challenges due to Covid19 and subsequent loss of livelihood for the rural poor, the UPA-era rural job guarantee scheme has been a life-saver. The Mahatma Gandhi National Rural Employment Guarantee (MNREGA) scheme has seen a record number of households as well as individuals demanding work in 2020-21. Until the morning of January 19, nearly 76.7 million households and more than 118 million people had demanded work under the scheme. This means nearly 20 million more households and 27 million more people demanding work under the scheme compared to the full year 2019-20.

The mandate of MNREGA is to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. The growth in demand for works under MNREGA underlines significant rural distress and also shows why the mockery of the scheme by Prime Minister Narendra Modi in this government’s first term was misplaced.

In 2015, Modi had termed MNREGA a “living monument of failures” of the UPA regime. However, his government has been compelled to not just continue with MNREGA, but also increase the budgetary allocation under it in the pandemic year. As part of the Rs 20 lakh crore stimulus package the Centre unveiled in May 2020, after a harsh lockdown had snatched livelihoods, the Centre announced an additional Rs 40,000 crore allocation under MNREGA. Thus, for 2020-21, the total budget for the scheme is nearly Rs 1,0100 crore.

The Gaps Are Showing

But even the enhanced allocation is not enough as well over 90 percent of the available funds have already been used with two months still left for the fiscal year to get over. Now, activists are demanding that not only should the budgetary allocation of MNREGA be increased, but the number of days for which work guarantee is made available to every rural household should be doubled to 200. Another demand is for an increase in wages paid under this scheme, which almost always remain below the minimum agricultural wage in most states.

M A Raunaq from the People’s Action for Employment Guarantee (PAEG) said that some state governments (Rajasthan, Jharkhand) have already requested the Centre to double the number of days for which each household is eligible to demand work under MNREGA to 200. But the Centre has not been responsive, merely pointing towards the increased budgetary allocation while ignoring their demands.

It is another matter that the scheme’s architecture anyway provides for increasing the number of days of guaranteed work from 100 to 150 in case of natural calamities. And states such as Kerala and Odisha have, in the past, invoked floods and a cyclone respectively to seek this relaxation.

Another activist pointed out that the government had announced a new scheme called Garib Kalyan Rozgar Yojana (GKRY) in the aftermath of the Covid-19 lockdown. This scheme was meant exclusively for offering employment opportunities to those migrants who had returned to their home states after the lockdown rendered them homeless and without jobs, and was to be used in integration with some existing schemes, including MNREGA. But here again, no additional budgetary allocations were made.

Then, even the enhanced budgetary allocation for MNREGA has not been sufficient to provide employment to all the needy in this pandemic year. The government’s own dashboard shows that nearly 10 million households and more than 20 million people who demanded work this year have not been given any job. And nearly three million households have already completed the mandated 100 days of employment and are therefore not eligible for more work.

More Money Please

It is no surprise therefore that activists are demanding that the budgetary allocation for this scheme be doubled to at least Rs 2 lakh crore.

Yet another issue being flagged for MNREGA is the wage per day, which activists allege is even lower than the minimum wage for agriculture in some states. The all-India average wage per person day in 2020-21 was Rs 200.5, with Haryana paying the maximum at Rs 308.27 and Telangana paying just Rs 168.77 for a day’s work so far this year. In 2019-20, the all-India rate was Rs 182.35.

Rajendran Narayanan, Assistant Professor at Azim Premji University and member of LibTech India, said wages paid under MNREGA are lower than the minimum agricultural wage in 18-20 states for the last many years.

As for the Finance Minister’s statement last year of having increased the rate to Rs 202 a day, Narayanan said the annual increase in the rate had been announced much before the FM’s statement and therefore the government did not offer more than the notified wage rate for 2020-21.

“Wage rates under MNREGA should at least match the minimum agricultural wage of each state,” he said. Also, the budgetary allocation for MNREGA should be “notional” – according to demand for work instead of a quantum fixed at the beginning of the fiscal year.