Why This Attack on MGNREGA?

The largest public employment programme the world has ever seen is in trouble. In 2013-14, 74 million individuals in 48 million households in rural India were employed under the Mahatma Gandhi National Rural Employment Guarantee Act programme (or MGNREGA as it is called), with each household on average finding work for 46 days. This cost the Government of India Rs 39,000 crore last year, or barely 0.5% of gross domestic product. But the National Democratic Alliance (NDA) government has made no secret of its lukewarm support for the MGNREGA which it sees as too closely identified with the previous United Progressive Alliance government. The Government of India has now imposed a cap on the release of funds to individual states. And two major proposals that are being seriously considered are, one, to restrict the scheme to identified backward blocks in the country and, two, to alter the ratio of expenditure between wages and material in favour of the latter. All these add up to essentially dismantling the demand-driven character of MGNREGA and reducing the amount of employment that can be generated every year. This is the beginning surely of a gradual whittling away at the programme, with the ultimate aim perhaps of winding it up altogether. If that were to indeed happen it will be a great disservice to the tens of millions of the poor and marginalised who have benefited from this guarantee of up to 100 days of work for a rural household. True, MGNREGA has been neither an unqualified nor a universal success. But we should not deny that it has been a moderate success in providing employment support to the rural poor.

An enormous amount of independent research has been conducted on the working of MGNREGA since the programme was launched in 2006. Unless one is selective about choosing the results of such research, the messages from this research are unambiguous. There are wide variations in the working of MGNREGA across the country, but on balance four positive outcomes stand out. MGNREGA provides some income security to the rural poor; it has resulted in the creation of productive assets in and outside agriculture; the high level of female participation (40% of those on the worksites are women) has contributed to a degree of women’s empowerment; and a modest tightening of the rural labour market has taken place, contributing to higher real wage rates and reservation wages. These are major achievements by any standard and stand testimony to the value of the MGNREGA.