Did states with high poverty levels spend less on rural job scheme?
The government has constituted a high-powered panel under former rural development secretary Amarjeet Sinha to study various aspects of the rural job scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), including its role in poverty alleviation over the years, governance structure and systems, and, perhaps most importantly, the spending pattern.
Sources said the panel, formed in October, was slated to give its report by January, just ahead of the Union Budget 2023-24 in February.
Before the pandemic came, 50-55 million households used to seek work regularly under the scheme in a year. This number, since the pandemic struck, has jumped to over 70 million per annum. Also, in terms of budgetary provision, before the pandemic, annually ~70,000-80,000 crore used to be spent on the scheme. Expenditure has jumped to almost ~1 trillion per year.
The large expenditure on the scheme and the steady work demand from rural areas despite visible signs of economic recovery have raised doubts in some quarters of the government on the nature of spending.
There are reports showing the quality of expenditure has undergone a shift and a big chunk of the fund is now being spent on creating individual assets. This is done typically on the land of marginalised sections.
Recent reports said work in 341 blocks, spread across 25 states, was being scrutinised by the Centre, which has deputed special audit teams to examine the situation. But, as against the perception in some quarters that work demand could be inflated or doctored, a report by Dalberg Advisors titled “The state of rural employment: A look at MGNREGS across 5 states in India”, released few months back, showed in the last few years, almost 70 per cent of the job-card holders wanted jobs at least once during the past year. It said the households that applied for work received it but most of them got less than they wanted.
The report focused on five states — Andhra Pradesh, Jharkhand, Karnataka,
Rajasthan, and Uttar Pradesh — which accounted for over one-third of all jobs and have over 40 per cent of the registered MGNREGA workers in the country.
A broad look at the spending pattern in FY22 and its link with poverty does show some pattern but it isn’t very concrete. Also, spending depends on a state’s ability to generate demand and provide an environment for the demand to be materialised and not suppressed.
If the 2011-12 poverty numbers are considered, West Bengal, Rajasthan, Andhra Pradesh, and Tamil Nadu were the states with the highest expenditure in FY22. All these states had poverty numbers lower than the national average of 21.9 per cent in accordance with the 2011-12 data.
Even when the more updated Multidimensional Poverty Index of the NITI Aayog is taken, three of these states, not Rajasthan, had poverty lower than the national average.
In contrast, expenditure on the scheme was less in states with poverty levels higher than the national average. They are Bihar, Odisha, Chhattisgarh, Madhya Pradesh, and Uttar Pradesh. While Odisha had almost 33 per cent of its people below the poverty line, according to the 2011-12 data, its expenditure on the scheme in FY-22 was ~5,988 crore.
While Rajasthan had around
14.7 per cent people living below the poverty line, its expenditure was ~10,462 crore in FY22.
There is an issue of relevance of the poverty estimates, given that updated data isn’t available and a lot might have changed between 2011-12 and 2021-22, especially since the country experienced two years of pandemic.
That is why a more granular and minute analysis is needed before arriving at any firm conclusion on leakages and misappropriation to understand the spending pattern. However, critics say just by strengthening the mandatory social audits of the work, a lot of the perceived leakages could be plugged, which will also clear a lot of doubt.
“I don’t understand what the government is solving and what this panel would reveal that we do not know. We see huge leakages and systemic bottlenecks and malpractices everywhere. Wherever stringent social audits happened, it revealed great corruption at worksites. However, it is sad to see that due to various reasons and vested interest groups, social audits have never been established in any of the states. Independent agencies don’t get established as a society and it remains under some or the other department, further dissolving its relevance,” said Debmalya Nandi from the MGNREGA Sangharsh Morcha, an organisation working for the rights of MGNREGA workers for years.