Putting dole to work

| Updated on March 09, 2018

The MGNREGA programme can become a productive government intervention if dovetailed with other State schemes

A little-noticed proposal in this year’s Budget has been to convert the MGNREGA programme from a Central to a State Plan scheme. Although not finding explicit mention in Finance Minister Arun Jaitley’s speech, the detailed ministry-wise Expenditure Budget documents clearly show the ₹33,364 crore provision towards MGNREGA for 2014-15 under the ‘State Plan Schemes’ head. This is as against earlier budgets in which allocations to the programme — a flagship of the previous Congress-led dispensation — were part of the Central Plan. Further, Jaitley’s Budget speech itself proposed that wage employment under MGNREGA would henceforth be through work that is more productive, asset-creating and “substantially linked to agriculture and allied sectors”.

Both these tweaks to MGNREGA are welcome. Many States today have their own rural development schemes. These are mostly tailored to their specific local conditions and requirements. There is no harm if MGNREGA monies can be used to pay for the labour component of work undertaken under such schemes. Currently, there is a certain rigidity built into MGNREGA in the insistence that the material component in any work must not exceed 40 per cent of the total cost. Also, use of ‘labour-displacing machinery’ is prohibited. Choice and design of works — including apportioning costs between labour and material/machinery — is something better left to the concerned State or local panchayat. What matters is the implementation of the central provision in MGNREGA: the right to at least 100 days of guaranteed employment in a year for every rural household at the notified minimum wages. So long as the State ensures this employment within 15 days of the registration of the demand, there should be flexibility on the kinds of work being undertaken. The mere fact of a backhoe being used at a public works site, even if unskilled labour may be necessary in other operations, shouldn’t disqualify it from receiving MGNREGA funds. Such inflexibility can be counter-productive by affecting the quality and speed of the work under execution. Hopefully, this will change once States are free to dovetail MGNREGA with their own schemes.

Equally important is the need to link MGNREGA to agricultural development. A model here could be Maharashtra’s Horticulture Development Programme that, during the 1990s, succeeded in bringing an additional 10 lakh hectares area under fruit crops by linking it to the State’s own Employment Guarantee Scheme. The latter scheme provided subsidy in cash for wages — apart from planting material and other inputs in kind — for three years to farmers up to four hectares. Not only did it help Maharashtra become India’s No 2 fruit producer, it also created some 23 crore man-days of employment: Horticulture production requires two-three times more labour compared to normal food crops. If imaginatively deployed, MGNREGA can become a productive government intervention rather than a ‘dole programme’ that many see it as now.

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Published on July 29, 2014
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