The Mahatma Gandhi National Rural Employment Guarantee Scheme or MGNREGS is one of the most discussed of schemes owing to its enormous scope and the political mud-slinging that goes on in relation to it.
Prime Minister Modi had once called the scheme as a ‘living monumental failure of Congress’. Yet, he continues to give the scheme more allocation. But even if the NDA wanted to shut down the scheme, it couldn’t because its scope of implementation is huge.
The concept of the MGNREGS was conceived by former Prime Minister Narsimha Rao, something for which he isn’t given due credit. Basically, the scheme provides for at least 100 days of employment in a financial year and the same was increased to 150 with certain restrictions. Employment is to be provided within 5 km radius from place of residence of the applicant and has a certain floor value for the wages. If an applicant is not provided an employment opportunity within 15 days from the application date, then the applicant is entitled to receive unemployment benefits. The scheme was definitely a ground-breaking one that could change the dynamic of rural India.
But as usual, the potential of the scheme wasn’t realized because it was marred with inefficiency and corruption under the Congress regime. The Congress hurriedly extended the scheme to all over India from 1 April 2008 in an attempt to win the 2009 election but they didn’t consider that this expansion would put unprecedented pressure on the system. Problems such as – the minimum wage offered in the scheme was much lower than the prevailing market rate in areas like Kerala.
In 2009, even the Congress acknowledged that there were serious leaks in the mechanism. The illogical expansion of the scheme by the UPA to gain votes created such a chaos that till January 2016,the Ministry of Rural Development had issued over 1000 circulars on implementation and compliance. In 2014-15, only 28% of the wages were paid on time. By the end of FY 2015-16, about Rs 12,000 crores of arrears of the state were accumulated. The delay of wage payments meant that the very essence of the scheme was destroyed and the poor couldn’t afford this. The scheme had lost all meaning.
How Modi Government Transformed its Implementation
In FY 2016-17, the government transferred 1/3rd of budgeted funds to the states by end of the first quarter.This rejuvenated the scheme with the state governments also promising to clear all arrears. The Modi government has allocated about Rs 48000 crores for the scheme in FY 2017-18.
The difference between the UPA and NDA when it comes to the implementation of the scheme is that the UPA focused on job creation while the NDA focuses on asset creation. Under the UPA, assets were created just to create jobs whether or not the assets provided any benefit or not to the economy or not. Just to provide jobs and please people into giving them votes, money was spent on useless assets. Along with this major issue, the scheme was riddled with corruption and leakages.
The UPA focused only on creating jobs while the quality of the assets didn’t matter to them. This is why under the schemekachcha structures instead of pucca structures were built. Basically, the focus being exclusively on job creation led to no infrastructural development in the rural areas and hence the quality of life and long-term improvement in standard of living remained stagnant. This essentially meant pouring money down the drain as except for temporary employment, the people experienced no change in their lives and neither did the rural economy grow.
On the other hand, the Modi government has focused on durable asset creation. Proper infrastructure is the foundation of a strong economy and the rural areas can only prosper if long-lasting roads, wells, canals, etc., are created.
This doesn’t mean that the employment lending capacity of the scheme has diminished. The leakages in the scheme during UPA rule meant that middlemen took money that was meant as wages or for providing further employment to the poor. The airtight implementation of the scheme by the Modi government had resulted in the unemployment rate falling from 9.5% in August 2016 to 4.8% in February 2017 according to a report by the Economic Research Department of the SBI.
One of the primary reasons why this happened was because of the efficient implementation of MGNREGS. Household allocated work increased from 83 lakh households in October 2016 to 167 lakh households in February 2017. Some of the major areas of focus under the scheme have been drought-proofing, water conservation and rural drinking water.
These points highlight how the Modi government has transformed a sliding scheme into a lively one that not only provides employment to the poor but also gives a massive boost to rural infrastructure.