MGNREGA, a cash transfer scheme?

Is it the largest employment generation effort of its kind anywhere in the world—or the largest direct cash transfer mechanism?
Comment E-mail Print Share
First Published: Mon, Mar 18 2013. 07 15 PM IST
A file photo of workers working under MGNREGA. Photo: Ramesh Pathania/Mint
A file photo of workers working under MGNREGA. Photo: Ramesh Pathania/Mint
Travelling through parts of rural Assam, you cannot ignore the signs of visible and abject poverty. I was surprised to discover that unskilled labour rates were over Rs200 per day. In the Kumaon region of Uttarakhand last year, labour was not available for less than Rs150 a day. This has probably been the most significant impact of the Mahatma Gandhi National Rural Employment Guarantee Act. It has set a base price for labour in rural areas, improved the bargaining power of labourers and has led to a widespread increase in the cost of unskilled and temporary labour including agricultural labour.
The allocation of Rs33,000 crore for the jobs scheme in the recent budget has been widely commented upon as this sum was not raised and is much lower than its peak of two years ago. In the current year, thus far, 1.86 billion person days of employment have been provided to 47.9 million households in the country. This is a pretty impressive number. However, only 6% households have completed their right to 100 days of work.
When the jobs programme was first rolled out, my initial reaction was one of concern. Would there be adequate public works that would be meaningful? Were there long-term investment possibilities that could absorb so much labour? There were reasons to be sceptical. At the end of two consecutive years of planning and executing drought relief works in western Rajasthan, one would be at a loss on understanding how to generate productive employment. The sand had been cleared off the roads, the traditional rain-harvesting structures had all been repaired and de-silted and the kuchcha roads were complete. Beyond a point, de-silting traditional rainwater harvesting structures would destroy their efficiency. Further there is a limit imposed by geography to the number of such structures that can be created.
In areas with significant common land, such as van panchayats in Uttarakhand, it became clear that well-planned investment through the scheme on soil and water conservation measures could lead to significant long-term ecological benefits and make large watershed programmes or afforestation efforts redundant. Yet, the concern about how long could labour be productively deployed remained.
The rules of the welfare programme have been revised and include investment in irrigation, land development and horticulture plantations on private land of individuals such as families below the poverty line or scheduled caste or scheduled tribe families. Construction of individual toilets and toilets in community spaces have also been brought under the ambit of permitted works.
Today, there are new concerns with regard to the jobs programme. Decentralized planning of works that takes into account seasonal demands is, by and large, non-existent. The absence of an effective decentralized planning process by gram panchayats leads to poor absorption of the workforce and poor quality of works. A random check of the number of khals or percolation ponds approved in Uttarakhand will reveal the centralized nature of work allocation. Constructing so many khals with poor planning and site selection can actually cause more ecological harm than good.
The investment in the capacities of the gram panchayats to plan local projects or in personnel to facilitate the creation of such plans is limited. More importantly, the monitoring of the quality of the works is non-existent. Measurement is primarily meant to assess the amount to be paid to labour and does not adequately focus on the quality of the works itself. There are bottlenecks in the availability of trained and motivated personnel to undertake these tasks both at the gram panchayat level and the block level.
It is quite clear that some states need the resources that the jobs scheme makes available more than others. The offtake across states varies hugely and reflects not just the actual demand for such work but also the enthusiasm among the leadership at the state level.
Despite innovations in transfer of payments directly to the bank accounts of labourers, transparency is low and elite capture is common.
The persistence of questions about the nature and quality of planning, the quality of works and the ability to utilize labour effectively makes me wonder as to what exactly the programme is? Is it the largest employment generation effort of its kind anywhere in the world—or the largest direct cash transfer mechanism?
V.K.Madhavan has worked in the not-for-profit sector for two decades and spent 15 years living and working in deserts and hills. He’s still on the fringe asking questions and looking for answers. He writes every fortnight.
Comment E-mail Print Share
First Published: Mon, Mar 18 2013. 07 15 PM IST