Mumbai/New Delhi: The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which guarantees rural households 100 days of paid labour a year, was championed by the United Progressive Alliance (UPA) as the best way to tackle India’s rural poverty.
Through the 2014 general election campaign, the Bharatiya Janata Party (BJP) disagreed, constantly criticizing MGNREGS as a vehicle for Congress corruption.
Even after coming to power, the attacks continued. In a 2015 speech during the budget session of Parliament, Prime Minister Narendra Modi described MGNREGS as a ditch-digging programme that bore testimony to the failure of the Congress in eradicating poverty. As the current opposition, the Congress has regularly accused the National Democratic Alliance (NDA) of neglecting MGNREGS. Last month, opposition members of Parliament and activists accused the current government of “undermining" MGNREGS.
Yet, for all the rhetoric on both sides, MGNREGS continues to operate much like it did before. According to data on the MGNREGS portal, spending, compared to UPA 2 is at similar levels, programme access seems constant and payment delays remain an issue.
While MGNREGS was launched by UPA 1 and scaled up nationally in the latter half of UPA 1, our analysis is largely restricted to a comparison between NDA 2 and UPA 2 because of the lack of publicly available data before 2011-12.
Since its inception, MGNREGS has been one of the largest items in the government of India’s budget. This has not changed under the NDA. As a percentage of overall government expenditure, annual spending on MGNREGS (2.4%) is in the same range as in UPA-II (2.6%).
More than spending, the success of MGNREGS depends on how many poor rural households it reaches. Last year (2017-18), 50.2 million households worked under MGNREGS, comparable to what it was in 2011-12 (50.1 million) under UPA-II. The amount of work done by households has also not changed significantly. Through the programme’s history, households have rarely availed their full MGNREGS right to 100 days of work: in 2017-18, the average work done per household was only 44 person-days, the same as in 2011-12.
MGNREGS, however, is reaching a slightly smaller share of rural households. As India’s rural population has increased, MGNREGS access has not kept up. One reason could be declining rural poverty levels.
Tracking India’s rural poverty levels is challenging but one useful indicator is University of Oxford’s Multidimensional Poverty Index (MPI), which captures different aspects of poverty such as asset ownership and education.
According to MPI, India’s rural poverty rate nearly halved from 68% to 37% between 2005-06 and 2015-16. Annualizing this change and combining it with census data gives us an approximate estimate for the number of rural poor households.
In 2017-18, there were around 61 million rural poor households in India, around 18% more than the 50 million rural households working in MGNREGS. As India’s poverty rate reduced over the last decade, the number of poor households and the number of households working in MGNREGS has converged.
One reason for India’s declining rural poverty rates could be MGNREGS itself. In a 2016 review of MGNREGS studies, Sandip Sukhtankar of University of Virginia suggested that the programme has boosted wages in agriculture and unskilled labour and, when implemented well, it is associated with increases in income.
Implementing MGNREGS well has, however, been a challenge for many states. One way to assess implementation quality is to look at access to MGNREGS work, specifically the proportion of rural households working in the scheme. This reveals significant differences across India. More rural households in the south and the North-East work in MGNREGS than in northern and western India.
This variation has been a common thread under NDA 2 and UPA 2 administrations.
Another way to see this is to compare the proportion of poor households and MGNREGS working households. For instance, in 2016-17, Bihar was home to 19% of India’s poor households (according to MPI) but only 5% of the country’s MGNREGS working households. In contrast, Kerala accounted for 0.1% of India’s poor households but 3% of all MGNREGS households. Even in 2011-12, under UPA 2, the share of households from Bihar and Uttar Pradesh working in MGNREGS was disproportionately low.
Beyond targeting the poor, MGNREGS specifically seeks to help women with one-third of all work mandated for women. Under NDA 2, average female participation in MGNREGS across India has exceeded both male participation and female participation in UPA 2.
Among disadvantaged groups, the proportion of Scheduled Caste workers has remained fairly constant but there has been a slight decline in the proportion of Scheduled Tribe workers in recent years.
Access to MGNREGS work is a critical first step but more important is the poor receiving their wages.
Throughout its existence, MGNREGS has been plagued by payment delays. Under NDA 2, according to official data, payment delays, defined as later than 15 days, has declined significantly with less than 10% of payments delayed in 2018-19.
However, this improvement could be masking ground realities.
According to a study by Rajendran Narayanan of Azim Premji University and others, the government’s definition of payment delay only covers the date the fund transfer order is issued rather than when a payment actually reaches the beneficiary.
They find that in more than 3,600 gram panchayats across 10 states, only 32% of payments were credited into beneficiaries’ accounts in time.
Overall, the NDA 2’s record on MGNREGS is not too different from its predecessor’s. It is a testament to this continuity that even senior ministers routinely cite the jobs programme when asked about their response to rural distress.
In response to criticisms about the government’s new rural income support scheme leaving out the landless population, finance minister Arun Jaitley argued in an interview to the Press Trust of India that the landless are covered under the MGNREGS programme.
Jaitley has batted for the rural jobs guarantee programme earlier too, claiming that it is an effective boost to rural growth.
Despite the rhetoric against the programme in the early years, the government seems to have found it prudent to continue the MGNREGS programme.
This is the third of a 12-part report card series on NDA 2.