MGNREGA Demand And Rural Distress

Sep 13, 2024

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In August 2022, demand for work under MGNREGA fell to around 16.06 million households, the lowest monthly demand since October 2022.

In August 2022, 16.06 million households sought work under MGNREGA, marking the lowest demand since October 2022.
In August 2024, 18.9 million workers sought work, the lowest demand since October 2022, with month-on-month declines throughout 2024 due to a better monsoon increasing kharif sowing labour demand.

Reduced Budget Impact: A reduced MGNREGA budget has a “cascading effect” on wage release, material funding, and overall progress.
Budget Allocation vs. Actual Expenditure: For FY 2024-25, ₹86,000 crore was allocated, but by February 1, 2024, expenditure reached ₹88,000 crore.
Delays in Wage Payments: The committee flagged delayed wage payments that should be compensated with a delay allowance.
Inadequate Delay Allowances: In 2022-23, only ₹59 lahk of ₹93 lakh approved for delay allowances was paid, and in 2023-24, only ₹2.5 lakh of ₹24 lakh was disbursed.

Active monsoons and increased kharif sowing activities may have attracted manual casual labourers to other work opportunities.
MGNREGA is a distress employment scheme, indicating fewer people are seeking low-wage temporary work compared to other jobs.

Civil Society Concerns:
Activists suggest the decline in work demand may be artificially created due to fund shortages.
Delays in wages and inadequate funding can reduce beneficiaries’ interest in the program.
Allegations of Demand Underreporting: Claims that actual demand is not fully captured at the panchayat level to keep budgetary outgo within limits.
Technological Interventions: The introduction of Aadhaar-based attendance systems, mandatory Aadhaar-linked bank accounts for payments, and GPS tracking have deterred workers from seeking employment.
The National Mobile Monitoring System (NMMS) aims to modernise MGNREGA monitoring but faces implementation challenges.

Exclusion of Workers An estimated 10-15 million regular MGNREGA workers from West Bengal are excluded from demand calculations.
Funds for the state were stopped due to non-compliance with MGNREGA directives (Section 27).
Section 27: The Central Government can direct States for effective MGNREGA implementation and, upon complaints of fund misuse, may investigate, halt fund releases, and take remedial action.
Pending liabilities for MGNREGA wages in Bengal were around ₹2,605 crore.
Allegations of Criminalisation: The Paschim Banga Khet Majdoor Samity (PBKMS) argues that withholding wages amounts to punishment for MGNREGA workers.

Link Between MGNREGA Demand and Rural Distress: The Economic Survey challenged the direct correlation between MGNREGA demand and rural distress.
States with high poverty and unemployment rates utilised more MGNREGA funds and generated more employment days.
State-wise Fund Usage: Tamil Nadu (under 1% poor population) used nearly 15% of MGNREGA funds; Kerala (0.1% poor population) used almost 4%.
Combined, these states generated 510 million person-days of employment.
Conversely, Bihar and UP (45% poor population) only accounted for 17% of funds and generated 530 million person-days.
Discrepancies in Demand Reporting The Economic Survey noted that true MGNREGA demand is not fully captured in the Management Information System (MIS).
Rising household debt was expected to increase MGNREGA demand, yet data showed otherwise.

Criticism of State Governments: The Ministry of Rural Development criticised Andhra Pradesh and Telangana for violating MGNREGA guidelines, leading to a rise in work demand.
Field Reports from Gujarat: Reports indicate that work has been temporarily halted in Gujarat due to wage-to-material ratio issues.
Current Demand Trends: As of August 2024, 16.06 million households and 18.9 million workers sought work under MGNREGA, indicating a decline from previous months due to better monsoon conditions.

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