Problems continue despite slew of records by MGNREGA in FY21

In Covid-hit FY21, the central scheme notched up record number of beneficiaries and work days

The financial year 2020-21 has been a watershed moment for the central government’s flagship scheme, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It provided employment to the lakhs of migrants returning to their villages amidst the harsh lockdown. And even after the lockdown was lifted in June last year, the scheme continued to attract casual workers as the economy took time to get back on track.

And now, with the second wave of the Covid-19 pandemic threatening to derail economic activity in the cities, MGNREGA could once again become a life saver for those returning to their villages for the second time in a year.

In FY21, as many as 110 million people got work under the scheme, the highest since its inception in 2006. And it generated around 3,900 million person days’ work — also the highest since its launch.

The money spent under the scheme for wages and materials together with administrative expenses was over ~1.1 trillion. A staggering ~78,000 crore went towards the payment of wages, which is also a record.

Data shows that about 8.3 million works were created under the scheme in FY21— around 11.26 per cent more than in FY20.

Around 7.8 million households completed 100 days of work under the scheme, while on an average, employment provided was a high of 52 days — much higher than the 4042 days of work generated in the last few years.

Surprisingly, West Bengal, which has been criticised for not implementing central schemes, did very well with MGNREGA. The state provided work to 11.8 million people under the scheme — the highest in the country — and spent around ~10,403.13 crore on it, next only to Uttar Pradesh and Andhra Pradesh.

Unpaid dues

But not everything was perfect with MGNREGA in FY21. Despite a hefty jump in revised projections in the Union Budget for spending under MGNREGA — ~1,10,829 crore — as much as ~17,370.58 crore has been carried forward to the next financial year as unpaid dues.

Experts said that this means that at least 24 per cent of the Budget allocation of ~73,000 crore for MGNREGA in FY21 will go towards the clearing of pending dues.

As on April 14, 2021, pending wage dues alone are about ~1,555.29 crore (around nine per cent of the total dues), while the bulk of the rest relates to material components, estimated to be around ~15,444.56 crore. The balance is pending administration expenses.

“In the last five years, on an average, over 20 per cent of the budget has been used to settle pending liabilities of previous years. If we expect the same in the coming financial year, then about ~60,000 crore will be left to generate employment,” a statement from People’s Action for Employment Guarantee said.

In FY21, too, out of the ~1,11,500 crore allocated for MGNREGA, around ~13,760 crore was spent on clearing the dues from the previous year.

Therefore, despite an almost 81.3 per cent jump in revised estimates for MGNREGA in FY21, due to Covidrelated demand for extra work in rural areas, the actual funds available under the scheme was about ~98,000 crore.

Though currently the Centre is releasing over 95 per cent of the dues within 15 days of the order, the process drags at the bank and the final distribution stage.

A 2018 survey by Libtech India among 1,947 MGNREGA workers in Andhra Pradesh, Rajasthan and Jharkhand between Septembernovember 2018 showed that almost 45 per cent of the respondents had to make multiple visits to a bank to withdraw their last payments. The survey, supported by the Research Centre at Azim Premji University, Bangalore, was done to assess the hurdles workers face in accessing their wages.

Libtech India is a group of social scientists, activists, engineers, and data scientists who have been studying various aspects of MGNREGA across several states.

“Rural banks get very crowded. This, and the fact that banks are located far away from panchayats, implies that MGNREGA workers have to make multiple trips to withdraw their wages,” the report said.

The survey also found that awareness about banking norms and rights was very low among MGNREGA workers. Around 36 per cent of the workers visited the bank to find out about wage credit and about a quarter of them were misinformed about wage credit and hence had to make multiple visits.

Clearly, despite huge funds allocations and the fact that it is a tremendous safety net for the poor, especially during the current Covid19 crisis, a lot needs to be done to make MGNREGA more efficient.