Fixes That MNREGA Needs

The problem of over-centralization has plagued MNREGA since its inception


The ‘highest ever allocation’ to MNREGA (which also led to it trending on Twitter) in the Union Budget has provided a useful opportunity to raise some pressing issues related to the implementation of the scheme. It is natural, and welcome, that the government turns to MNREGA to provide much-needed relief to those whose already precarious lives have been disrupted by demonetization, a man-made economic disaster. Widespread reports of job losses in the informal sector suggest that many people are turning to MNREGA for relief. If true, the “highest ever” will nevertheless be woefully inadequate. It was reassuring to hear that more funds will be made available as the need arises. This is likely to be the case as in the previous financial year: the revised estimate for MNREGA expenditure was Rs 47,499 crores, much higher than the budget estimate (Rs 38,500 crores).

The budget and the increased work demand post-demonetization are not the only issues to tackle as far as MNREGA is concerned. There are also serious implementation problems, made worse by the ostrich-like attitude of successive governments.

The problem of over-centralization has plagued MNREGA since UPA-2. For instance, when there were complaints of delays in wage payments, techno-bureaucrats in Delhi decided to wrest control from local governments and control payments from Delhi. The positive experience of states such as Rajasthan and Tamil Nadu in ensuring timely payments by devising strong accountability mechanisms was ignored.

Similarly, in early UPA-2 years, the Minister of Rural Development wanted to include the construction of Rajiv Gandhi Bharat Nirman Sewa Kendras in the permissible list of works. Some said it was to expand material-intensive works. Around that time, wage corruption had become difficult (according to a study cited in the Economic Survey, wage corruption had declined to 20 percent in 2011-12), so material expenditure (inflated invoices for construction material and so on) was the main source of corruption. There was, at that time, strong resistance from MNREGA activists and others to this attempted centralization, as MNREGA works are supposed to be decided by the Gram Panchayat. Today, it is routine for priority works (de facto compulsory) to be dictated by the ministry in Delhi, or even by the Prime Minister’s Office (e.g., the focus on toilet construction)! Sometimes, even the dimensions are centrally determined (e.g., width, depth and breadth of ponds). Such centralized target-driven “asset creation” is likely causing more harm than good.

MNREGA’s Management and Information System (MIS) had greatly facilitated programme implementation and helped bring transparency in earlier years. For instance, the availability of all important work-related records online enabled social audits which are partly responsible for reduced levels of wage corruption.

Technology, MNREGA’s best friend in the initial years, has turned its worst foe. Now, the MIS has morphed into a “Digital Red Tape” nightmare: a horrendous combination of old-style paperwork with techno-utopic digitization has turned into a big drag on its implementation. The meager administrative staff for MNREGA was swamped (around 2009) with entering bank account numbers into the MNREGA MIS; soon as that settled, MNREGA got hit by “Hurricane Aadhaar” which has forced the MNREGA machinery to privilege the creation of an Aadhaar-compliant system over implementation of the programme itself.

What makes the situation more precarious is that traditional implementation issues were never fully resolved. Two that deserve immediate attention are the stagnation in wages and delays in payments. It appears that since the government starting indexing wages, they have stagnated in real terms at the 2012 level. Moreover, the indexation process is lacking. For instance, on May Day in 2016, MNREGA workers in Jharkhand decided to return Rs 5 (their annual raise) to the Prime Minister as a gesture of protest. The question of increasing real wages is hardly heard any more.

Delays in wage payments have been a serious impediment (except in 2-3 states) since 2009, when bank and post-office payments were introduced. Digital Red Tape and Hurricane Aadhaar have worsened the situation. In Karnataka and Jharkhand, workers have been deleted from the MNREGA database after they worked but before they had been paid. While their wages were being processed, the data entry operator, under pressure to show “100 percent aadhaar-seeding”, decided to achieve his target by deleting their names.

Finally, there is the constant battle against corruption. In the pre-MNREGA days of employment for drought relief and even in the early MNREGA days, “ghost works” (works which existed only on paper) were not uncommon. Bit by bit, with strong public vigilance and transparency-enhancing use of technology, corruption in MNREGA declined. More recently, however, there are stray but worrying reports of the return of such ghosts. Further, Hurricane Aadhaar and Digital Red Tape have created their own armies of middlemen (data entry operators, banking correspondents, etc).

Simple measures can help revive MNREGA. First, ensure that there is at least one open-ended worksite in each Gram Panchayat and here, work should be provided without insisting on written applications. Two, MNREGA should be released from the clutches of technocratic implementation (e.g. Aadhaar should be removed entirely from its implementation; the use of electronic muster rolls (E-MRs), a relic from the UPA-2 regime, which have worsened delays in payments without contributing anything positive should be discontinued). Three, non “priority” works suggested by the Gram Panchayat should be allowed. These measures will contribute to ensuring timely payments, meaningful asset creation and enable MNREGA to play the role it was designed for and which the government now seems to be willing it to fulfill.