PSC Suggests Reforms in MGNREGA Scheme

• 20 Dec 2024

For Prelims: Parliamentary Standing Committee on Rural Development and Panchayati Raj, Mahatma Gandhi National Rural Employment Guarantee Scheme, Aadhaar-Based Payment Systems, Aadhaar, Gram Panchayat, Ombudsman, Inflation, National Mobile Monitoring System,  Consumer Price Index for Agricultural Labour, National Minimum Wage, Consumer Price Index (CPI) Rural, Speaker. 

For Mains: Challenges associated with MGNREGA Scheme and way forward.

Source: LM 

Why in News?

Recently, the Parliamentary Standing Committee (PSC) on Rural Development and Panchayati Raj has highlighted the challenges that wages under MGNREGS have not kept pace with inflation and recommended certain reforms in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Note: Inflation refers to a decrease in the purchasing power of money, which is evident through a general rise in the prices of goods and services within an economy.

What are the Challenges in Implementation of MGNREGS?

• Wages Not aligned with Inflation: MGNREGA wage rates haven't kept up with inflation which reduces rural workers' purchasing power and discourages them from completing the full 100 workdays. 
  • Additionally, the 100-day wage guarantee often falls short, especially during natural calamities and post-pandemic recovery which restricts its potential to provide long-term livelihood security to rural households. 
• Revision of permissible works: The MGNREGA work list often fails to address rural needs like flood protection and land erosion management. 
  • Delays in revising permissible works based on local needs limit the scheme’s effectiveness in addressing regional challenges. 
• Delayed Payment of Wages: Delays in payment are often due to issues with Aadhaar-based payment systems (ABPS), inactive Aadhaar details, or frozen bank accounts undermining the scheme’s intended impact. 
  • Potential technical glitches and infrastructure issues leave vulnerable workers unpaid. 
• Delay in Compensation: In case of delay in payment of wages, beneficiaries are entitled to compensation at the rate of 0.05% of unpaid wages per day for the duration of delay.   
  • However, payment of delay compensation is not adhered to in most places in the country. 
• Unemployment Allowance: Under MGNREGA, persons who apply for work but are not provided within 15 days are entitled to a daily unemployment allowance. 
  • The unemployment allowance is rarely paid, and the amounts provided are minimal.  
• Weak Social Audits: Under MGNREGA, the Gram Sabha must conduct regular social audits of all projects taken up within the Gram Panchayat.   
  • However, in 2020-21, only 29,611 Gram Panchayats were audited at least once showing weak social audits mechanisms. 
• Lack of Ombudsman: Out of 715 possible appointments, so far only 263 ombudsmen have been appointed. 

What are the Various Recommendations Suggested by the PSC for Reforming MGNREGS?   

• Revision of Wage Rates: Wage rates should be linked to a suitable inflation index commensurate with the existing inflation to reflect the rising cost of living in rural areas. 
  • Update the base year 2009-2010 and rates to align with current inflation trends and rural economic conditions. 
• Increase Days of Work: The committee also recommended an increase in the number of days of work sought under MGNREGS from 100 to 150 days. 
• Payment Mechanisms: It recommended maintaining alternative payment systems alongside APBS to ensure uninterrupted wage disbursements. 
  • The panel recommended a streamlined payment process to ensure timely wage disbursement, aiming to reduce bureaucratic hurdles. 
• National Mobile Monitoring System (NMMS): The committee stressed the need for awareness campaigns and training programs to help beneficiaries use NMMS effectively. 
  • It also recommended retaining alternative attendance methods to avoid excluding workers due to technological issues. 
  • NMMS tracks attendance and work progress under MGNREGS to enhance transparency and accountability. 
  • Sufficient Fund Allocation for MGNREGS: The committee emphasized the need for the government to ensure sufficient financial allocations for MGNREGS to ensure its effectiveness in providing livelihood security to rural households.

Note:

• In the financial year 2024-25, the average MGNREGA wage increased across India by Rs 28 per day only. 
  • The MGNREGA wage increase for the financial year 2023-24 ranged from 2%-10%. 
• The Government of India notifies the wage rate under MGNREGA using Consumer Price Index for Agricultural Labour (CPI-AL). 
• Dr. Anoop Satpathy committee (2019) to review and recommend methodology for fixation of National Minimum Wage (NMW) had recommended that wages under MGNREGA should be Rs 375 a day. 
• Dr. Nagesh Singh Committee (2017) recommended indexing MGNREGA wages to Consumer Price Index (CPI) Rural as opposed to CPI-Agricultural Labour.

What is the Parliamentary Standing Committee on Rural Development & Panchayati Raj? 

• About: It was created for the first time on 5th August, 2004 under Rule 331C of the Rules of Procedure and Conduct of Business in Lok Sabha to give focussed attention to the issues related to rural development. 
• Jurisdiction: The following Ministries/Departments are under the jurisdiction of the Committee: 
  • Ministry of Rural Development 
  • Ministry of Panchayati Raj 
• Composition: The Committee has 31 members: 21 from Lok Sabha, nominated by the Speaker, and 10 from Rajya Sabha, nominated by the Chairman. 
  •  A Minister is not nominated as a member of the Committee. 
  • The Chairman of the Committee is appointed by the Speaker from amongst the members of the Committee from Lok Sabha.  
• Tenure of Members: The term of office of the members of the Committee does not exceed one year. 
• Functions:  
  • Considers Demands for Grants and reports to the Houses. 
  • Examines Bills referred by the Speaker or Chairman and reports on them. 
  • Reviews Annual Reports of Ministries/Departments and reports. 
  • Considers national policy documents referred by the Speaker or Chairman and reports. 

MGNREGS 

• About: Launched in 2005 by the Ministry of Rural Development, MGNREGS is one of the largest work guarantee programs, providing 100 days of unskilled manual work at minimum wage for rural households each year. 
• Implementation: The Ministry of Rural Development oversees the scheme's implementation with state governments. 
• Major Features:  
  • Legal Guarantee: MGNREGA's key feature is its legal guarantee, ensuring rural adults can request work and receive it within 15 days. 
  • Unemployment Allowance: If the work is not provided within 15 days, an unemployment allowance must be provided. 
  • Women Focussed: The scheme prioritizes women, ensuring that at least one-third of beneficiaries are women who have registered and requested work. 
  • Social Audit: Section 17 of the Mahatma Gandhi NREGA, 2005 mandates the Gram Sabha to conduct social audits of scheme works. 
• Cost Sharing: Financial assistance shall be provided by Central and State Governments in the ratio of 90:10 respectively. 
• Ban on Contractors: Engagement of contractors and use of labour displacing machines are banned.

Conclusion

The Parliamentary Standing Committee's recommendations for MGNREGS aim to address key challenges such as inadequate workdays, wage disparities, delayed payments, and weak monitoring systems. Effective implementation of these reforms is essential for improving rural livelihoods and ensuring the scheme’s sustainability in the long term. 

Drishti Mains Question: 

Q. Critically evaluate the challenges in the implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and suggest reforms to enhance its effectiveness. 

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)

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)