The start of July marks India’s shift to a new rural employment guarantee programme. In force now is the recently legislated Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-G RAM G, which replaces a two-decade-old scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005.
Among the changes, the new law offers a member of every household 125 days of paid work every year, up from 100 earlier. This increase made news when it was enacted, even as advocates of change hailed the rejigged scheme’s emphasis on using labour for useful public projects instead of just wage payouts.
Critics, however, detected a weakening in its fine-print of the job promise that has long acted as a safety net for millions. In all, how it pans out will test a major part of India’s poverty-relief apparatus.
Broadly, what began as a demand-fulfilling scheme funded by the Centre now operates within a budget constraint, with states required to bear 40% of the wage burden (or 10% in some cases) and also pay for over-budget employment. Although expenditure-sharing could improve accountability and get better work done, the weak fiscal position of many states may constrain the needy’s access to these daily-wage jobs.
Conceptually, what weakens the deal on offer is its annual 60-day suspension during a period of relatively heavy demand for rural labour (usually the harvest season), as deemed by each state.
This break aims to ensure adequate labour supply for the farm sector. Under the old scheme, farms saw wage bills escalate as MGNREGA wages acted as the minimum that workers would accept. While it distorted local job markets, it did so on behalf of the poor—which was the policy intent. A yearly 60-day closure of the job window is a sub-distortion that tilts the field in favour of employers.
This effectively takes away the basic idea’s core promise: that a family can avail of a public job if and when needed (within a limit). An extra 25 days may not make up for a calendar gap.
That said, several other tweaks should help get more done for the money paid. Biometric tools should minimize pay leakages, even as geospatial technology will allow work projects to be planned and tracked better.
Indeed, various aspects of the new scheme have explicitly been designed to align its welfare function with India’s development agenda. Its labour-deployment focus on water security, rural infrastructure, livelihood assurers and climate resilience reveals a push for outcomes beyond relieving the hard-up of financial stress.
In that sense, the government seems justified in calling it a more purposeful programme than what it replaced.
Yet, since other fiscal outlays exist for much of what’s expected of it now in terms of a rural build-up, it is vital not to lose sight of its primary goal as a job backstop. As the next kharif harvest may take a blow from rainfall deficiency, the country’s rural economy might fare badly this year, leaving less cash to go around.
Welfare provisions are needed most acutely in times of distress. In general, India should aim to universalize its base-level job assurance.
Given the slow pace at which regular jobs are being generated and the hardship that attends being jobless, it’s time for the Centre to consider city coverage too. Urban poverty is a reality that must not be overlooked, disparity glares out even in posh localities and the poor shape of our cities would suggest there’s plenty of work to be done. All said, our safety net needs to widen.