Blitz Bureau
A review of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the financial year 2024-25 reveals that while the coverage has increased, with 8.6-pc rise in registered households under the programme, the delivery of promised employment has actually gone down, with person days having dropped by 7.1 per cent. The Rural Development Ministry has reportedly demanded a 12-pc increase in the scheme’s outlay for the five years through FY30, compared to the previous five.
This may not even be enough to cover the inflation of material costs during the period, let alone any increase in wages to fully compensate for inflation, unless the beneficiary pool shrinks substantially.
In FY25, 57.9 million households sought daily-wage MGNREGS work, down 23 per cent from FY21 when it peaked amid the acute rural distress caused by the pandemic. The work offered (person days generated) has seen an even sharper decline, indicating increased vigil to check misuse of funds. It is plausible that all who seek work aren’t getting it.
An attempt by the Union Government to rein in excesses via a nationwide rollout of Aadhar-based payment of wages may also have contributed to the sharp decline in MGNREGS expenditure in real terms. The Budget outlay for the scheme declined from Rs 1.1 lakh crore in FY21 to Rs 85,681 crore in FY25. While a reduction in the number of beneficiaries is par for the course when poverty is reducing, the needy shouldn’t be deprived either.
The period apparently led to a return of the unskilled and semi-skilled jobseekers from urban areas to their rural homes, seeking a share in the farm income pie. Real rural wages have, therefore, remained stagnant for years. The boom in construction activity in urban centres and the relatively robust performance of the agriculture sector in recent years may have alleviated the rural distress to an extent. However, the situation is still grim in several areas.
The fact that the demand for MGNREGS work isn’t reducing as fast as it should is an indicator of this. Four states – Tamil Nadu, UP, Bihar, and Maharashtra – have got an additional Rs 13,000 crore between FY23 and FY25, while West Bengal could not lay its hands on its share. There has been no release of funds to West Bengal since March 2022, as the Centre invoked Section 27 of the MGNREG Act, for “noncompliance with its directives”.
That absence of fund release to one state can itself lead to gains for others proves that demand is not duly met under normal circumstances. The relevant Parliament committee has recommended that MGNREGS wages be raised to at least Rs 400/day, along with an increase in guaranteed work days to 150. Given the rates of inflation since the pan-India rollout of the scheme in 2008-09, the panel’s recommendation isn’t extravagant, and needs to be acted upon.
A set of guidelines issued to the states recently aims to increase the oversight of gram panchayats over job cards deletions. This is welcome. MGNREGS has been a successful scheme due to its better design, and provided meaningful aid to rural poor. It needs to be run efficiently for the next few decades, till the country’s income levels improve. Other options like a Universal Basic Income Scheme involve several implementation challenges.
