Wednesday, June 30, 2010

Why MGNRGEA Works ?

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 has ushered a new hope for progress in rural India. The scheme has brought about number of changes. Let us briefly analyze on what are the defining features on this Scheme.

1. Trigger mechanism:
The act gives every person in a rural household willing to do manual work, a right to have a job card. The Act mandates that anyone who applies at a panchayat for a job card must be given one within 15 days. The Job card is updated by the local authorities and is kept under possession by the individual worker. Hence, MGNREGA is monitored by the job card holder (i.e. individual worker).In this context, the dated receipt is crucial for claiming the unemployment allowance.

At this instant it is pertinent to note that in 30 years of ‘ Maharashtra Employment Guarantee Act’ there are very few recorded instant of payment of unemployment allowance (Maharashtra is the first state in India to bring an employment guarantee act).

As on 2009, MGNREGA has recorded many instances of payment of unemployment allowance. Eg .Barwani (MP), Raichur (Karnataka), Kalanandi (Orissa) etc. The payment of unemployment allowance due to the negligence of local administration is deducted from the compensation of officials. (The state government is responsible for the payment of unemployment allowance as per provisions of MGNREGA).

The cost structure of the scheme is designed such that 94% of funds go for actual payment of wages. Remaining 6% is reserved for administrative costs.

2. Transparency & Accountability:
Right to Information (RTI) is embedded into the working of MGNREGA. The split up of the costs contributing to 94% of total costs (i.e. Administrative Component) has to be put on the MGNREGA website.
Also, it is possible to review the payments made to a worker, by typing the job card number at MGNREGA website. At the Gram panchayat level the payment made are written/ pasted on the walls of panchayat office. (A localized form of Management Information System – MIS). This practice is followed widely across Panchayats.

3. Mandatory payments through Banks/ post offices:
A major issue with welfare schemes (prior to 2005-2006) was the involvement of the middle men. Our former PM was quoted as saying that for every Rs 1 spent by the government, only 15 paisa reaches the end beneficiary. This issue is tackled in MGNREGA through the mandatory payment through bankers or post office. (Our Prime Minister has made it clear that payments under all social security schemes including scholarship & pension to students would be done only through savings account).

However, banks have expressed their inability to operate millions of more savings accounts as a result of this government policy. If we analyze in depth we can find that this is a win-win situation for banks & government. There are two ways in which banks can benefit. Firstly, banks can get huge deposits from the money allocated for payments to beneficiaries (of MGNREGA and other Welfare schemes). Secondly, by including a sense of savings, the bank stands to benefit if they can cross sell other components like insurance.

This is a major contributing factor towards the goal of ‘Financial inclusion’ which reserve bank of India (RBI) is aggressively promoting.

4. Social Audit:
As per the scheme, all Gram Sabhas are expected to conduct social audit at least two times in a year. All sections of the scheme including bank / post office payments are audited. This is also a means of empowerment. (With 13th finance commission recommending direct payment of funds to Gram Sabhas, its role has increased exponentially). Gram panchayat are at various stages of evolution in different states. It has been found that where gram Panchayats are more successful, MGNREGA performs better.

5. Reversal of Migrants :
Migration (agriculture & others) has been serious issue at the village level. Agricultural migration is noticed prominently in Rural India. (e.g.: Agricultural workers moving from UP & Bihar towards agricultural hubs of Punjab & Haryana).Semi skilled workers migration is noticed in specific parts of India. (e.g.: Migration of workers from Ganjam, Orissa to parts of Gujarat to contribute towards Gems & Jewellery sector). Many a times these migrations result in welfare issues (housing, sanitation, health etc.) Many of these migratory trends have been reversed .For example in Mahbubnagar (AP) which is drought prone, migration has been limited to a large extent.

6. Women Involvement:
Women contribute to more than 50% of total beneficiaries from this scheme. The scheme provides women a means to find a meaningful employment in their own or nearby village. This is also a small step towards financial independence of woman in rural India. This is one enormous aspect of empowerment of women in rural India.

Scope for improvement & concerns:
There are various ideas for development of this scheme (as on June 2010). However, there have been concerns expressed on them too. Let us look at the areas for improvement & their respective concerns.

Scope 1: Discussions are on to allow MGNREGA works on private lands of small & marginal farmers.
Concerns:
i) This would lead to subsidizing the semi agricultural work of small & marginal farmers. This will affect the social balance in villages.
ii) Monitoring of work on private land is difficult for government agencies. Also these agencies do not have any say with --- to private lands. This becomes a case of responsibility without authority.

Scope 2: Introduction of some element of machinery is proposed. One criticism against MGNREGA is that the assets created are not durable. Introduction of machinery (to a limited extent) is targeted to fix this.
Concerns:
Scope of middlemen (contractors) will spoil the gains of this scheme.

Scope 3: There is a scope for integration of MGNREGA with other schemes such as Bharat Nirman.
Concerns:
(i) Concerns are there if Gram Sabha might loose its powers.
(ii) The objective of individual schemes will get diluted.

Mohammed Y Safirulla
(Safi)