Decline in Work Demand Under MGNREGS

• 10 Aug 2024

For Prelims: Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), International Monetary Fund (IMF), Monsoon, Migration, Work Guarantee Programmes, Employment, Unemployment Allowance, Gram Sabha, Social Audit, Below Poverty Line, Panchayati Raj Institution (PRI)

For Mains: Role of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Source: ET

Why in News?

According to the Ministry of Rural Development, work demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) fell sharply in July 2024.

What Does a Decline in Demand for Work under the MGNREGS Indicate?

• Current State of Demand for Work: Approximately 22.80 million individuals sought work under the scheme in July, reflecting a 21.6% decline from the same period in 2023.
  • These individuals represented 18.90 million households, a decrease of 19.5% year-over-year and 28.4% compared to June 2024.
  • On a month-to-month basis, the number of people seeking work dropped by 33.4% in July 2024.
  • In July 2024, fewer individuals submitted work demands in key states like Tamil Nadu, Andhra Pradesh, Karnataka and Telangana .
• Reasons For Decline in Demand Work:
  • Strong Economic Activity:
    • Work demand under MGNREGS usually drops when better-paying employment opportunities are available due to strong economic growth, possibly reflecting robust economic activity.
    • The economy grew at a higher-than- anticipated pace of 8.2% in the last Fiscal Year (FY) 2023-24.
    • The International Monetary Fund (IMF) predicts India will be the fastest- growing major economy, with growth rates of 7% in FY 2024-25 and 6.5% in 2025-26, both exceeding the global average.
  • Impact of Monsoon:
    • The monsoon typically causes large-scale migration of rural workers to villages for crop sowing, reducing the demand for unskilled jobs under the MGNREGS.
    • In 2024, abundant seasonal showers in July reduced the 11% rainfall deficit seen in June.

What is Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)?

• About:
  • MGNREGS is one of the largest work guarantee programmes in the world launched in 2005 by the Ministry of Rural Development.
  • It guarantees 100 days of employment each financial year for adult members of rural households willing to perform unskilled manual work at the statutory minimum wage.
• Implementation Agency:
  • The Ministry of Rural Development monitors the entire implementation of this scheme in association with state governments.
• Major Features:
  • The cornerstone of MGNREGA's design is its legal guarantee, ensuring that any rural adult can request work and must receive it within 15 days.
    • If this commitment is not met, an "unemployment allowance" must be provided.
      It requires that priority shall be given to women in such a way that at least one-third of the beneficiaries shall be women who have registered and requested for work.
  • Section 17 of the Mahatma Gandhi NREGA, 2005 mandates the Gram Sabha to conduct social audits of works undertaken under the scheme.
• Objective:
  • It was introduced with an aim of improving the purchasing power of the rural people, primarily semi or unskilled work to people living below poverty line in rural India.
  • It attempts to bridge the gap between the rich and poor in the country.
• Current Status:
  • Budget Allocation: For the financial year 2023-24, the government allocated approximately Rs 73,000 crore to MGNREGA, reflecting an increase from previous years to meet the rising demand for employment.
  • Employment Generation: In the FY 2022-23, MGNREGA provided over 300 crore person-days of work, with approximately 11 crore households participating in the scheme.
  • Wage Payments: The Centre has notified a 3-10% increase in the wage rates for MGNREGA workers for the FY 2024-25.
    • The average wage for 2024-25 is Rs 289 as against Rs 261 for FY 2023-24.
  • Project Focus: The scheme has increasingly focused on sustainable development projects, such as water conservation, afforestation, and rural infrastructure enhancement. Over 60% of the works undertaken are related to natural resource management.

What are the Challenges with the Implementation of the MGNREGS?

• Concerns Over Minimum Wage Determination: A panel from the Ministry of Rural Development has raised concerns that the minimum wage under MGNREGS is based on the Consumer Price Index for Agricultural Labourers,which does not reflect the different types of work performed by MGNREGS workers.
  • They recommend using the Consumer Price Index-Rural instead, as it is more current and accounts for higher expenses on education and healthcare.
• Poor Planning & Administrative Skill: Panchayats, except in some states likeKarnataka and West Bengal, lack experience in planning large-scale programs.The Comptroller and Auditor General (CAG) highlighted inadequateadministrative capacity among village panchayat members.
• Lack of Adequate Manpower: Insufficient administrative and technical staff atBlock and Grama Panchayat levels affects planning, monitoring, andtransparency.
  Difficulty in Funding the Scheme: The budget for MGNREGS has increased
• significantly, raising concerns about sustainability and funding sources.
  • The declining tax-GDP ratio poses challenges for financing the program.
• Discrimination: While MGNREGA promotes equal pay, instances ofdiscrimination against women and marginalised groups persist. Some statesshow high enrollment of women, while others exhibit low participation due tosystemic biases.
• Corruption & Irregularities: High levels of corruption result in minimal fundsreaching intended beneficiaries. Issues like fake job cards for non-existent workers lead to significant financial losses.

Way Forward

• Increase of Entitled Work Days: While a full 100 days of employment has notbeen provided per year, the Parliament Committee and activist groups havestrongly recommended an increase in the number of guaranteed days of workper household from 100 to 150 so that rural populations have a safety net fora longer period in the year.
• Capacity Building: Provide training programs for panchayat members toimprove planning and implementation skills and establish clear guidelines andbest practices for effective program management.
• Monitoring: Implement robust monitoring mechanisms to track fund allocationand project outcomes.Use technology, such as mobile apps and online portals,to enhance transparency and accountability.
• Updated Wage Determination: Shift the minimum wage determination to the
• Consumer Price Index-Rural to better reflect the living costs faced by MGNREGS workers.
  • Regularly update wage rates to keep pace with inflation and local economic conditions.

Drishti Mains Question:

Q. Discuss the role of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in generating employment in rural areas. What challenges are associated with the scheme?

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Prelims

Q. Among the following who are eligible to benefit from the “Mahatma Gandhi National Rural Employment Guarantee Act”? (2011)

(a) Adult members of only the scheduled caste and scheduled tribe households

(b) Adult members of below poverty line (BPL) households

(c) Adult members of households of all backward communities

(d) Adult members of any household

Ans: (d)

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Mains

Q. Hunger and Poverty are the biggest challenges for good governance in India still today. Evaluate how far successive governments have progressed in dealing with these humongous problems. Suggest measures for improvement. (2017)

Q. Do government’s schemes for up-lifting vulnerable and backward communities by protecting required social resources for them, lead to their exclusion in establishing businesses in urban economies? (2014)