UNION BUDGET 2023-24
Neglecting MGNREGS undermines workers’ rights
The MGNREGS continues to be deeply relevant as millions of rural households have gained employment through it. It is particularly vital in times of economic stress and, hence, it is important to make a budgetary provision for the full 100 days and, perhaps, expand it to 150 days of work, given the prevailing dismal employment conditions in the country. The government violates workers’ legal rights every time it does not match the funds to demand or does not pay wages on time.
Zoya Hasan
Distinguished Professor, Council for social Development, New Delhi
The words ‘rights’ and ‘equity’ are conspicuous by their absence from the numerous assertions and claims made by leaders of the National Democratic Alliance (NDA) with regard to their achievements in countless speeches and advertisements. A year ago, the Prime Minister stated that there was far too much emphasis on rights, and not enough on duties — even though the Constitution doesn’t place them on an equal footing. The realignment of rights and duties is not just about giving greater attention to duties; it is about giving less importance to rights.
This is evident from the niggardly attitude towards the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the constantly abridged budgetary allocation for it, which is tantamount to a disregard of this right. This has consequences for the larger issue of rights as it affects the well-being of the most vulnerable sections of our society.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), passed in 2005, was a path-breaking legislation aimed at providing guaranteed employment to rural citizens. It was the single largest rural employment scheme in independent India. It provided only 100 days of employment in a year and, that too, for just one member of a rural household, but the important thing is that it conferred an economic right, which means employment had to be provided on demand, and if the state could not deliver 100 days of work, then the person seeking employment had to be paid compensation.
However, this scheme has been hit hard by budgetary cuts. This started during the tenure of the Congress-led United Progressive Alliance (UPA) government itself, even though it had introduced the scheme; allocations practically froze during its second term, making no allowances for the rising prices or the increase in the number of job seekers.
But the NDA government has stretched the practice of making low budgetary allocations to the limit, which has weakened the legal guarantee of timely payment and employment. This comes at a time of rising unemployment and increased inequality in India. Both the World Inequality Report-2022 and Oxfam Inequality Report-2023 show India as one of the most unequal countries in the world in terms of incomes and assets. India registered the fastest increase in economic inequality in recent years, even as access to a number of social protection programmes has been severely undermined on the one hand, via restricting allocations and on the other, through the dilution of schemes, such as MGNREGS and even those that form part of the National Food Security Act.
This government has been lukewarm towards the MGNREGS in the last nine years. The Prime Minister spoke derisively about it in Parliament. The Finance Minister mentioned it only once (in the context of work for mangrove conservation) in her Budget speech this year. But the NDA government has not abolished the scheme; it has strangled it through low allocations. The budgetary allocation has been cut by 30 per cent to Rs 61,032.65 crore for 2023-24, the lowest in the past four years. It is lower than the budgetary estimate of Rs 73,000 crore for 2022-23. It is the second straight cut in the scheme’s budgetary allocation as in the Budget-2022-23 also, the allocation had been cut by 25 per cent to Rs 73,000 crore from the revised estimate of Rs 98,000 crore.
The gradual decrease in the budgetary allocation for the MGNREGS has created doubts about the government’s intentions. By cutting down the funds, the government sends out a signal that it wants to spend less on this scheme as opposed to the others, which means fewer initiatives can be undertaken under this scheme. Reduced funding also makes it difficult for the government to keep its promise of 100 days of employment, which is crucial for the survival of rural households. The average days of work offered is actually much below 100 days and, frequently, employees will not be able to get work even for half a year.
By law, it is a demand-driven scheme but the continuous decrease of funds has reduced its potential effectiveness. The government has always claimed that the actual allocation would be increased if it was found that a large number of persons were asking for employment under the scheme. While supplementary allocations for the MGNREGS have been increased substantially at the revised estimates stage, a low initial outlay acts as a discouragement. It diminishes demand, in fact, chokes it, which becomes a justification for the low initial budgetary allocation for the scheme. Even if the allocation gets increased later because of higher demand, this increase takes time, which means that wage payments as well as material costs will be delayed and workers get pushed into ‘forced labour’ in the intervening period.
Furthermore, almost half of the budget allocation is spent on clearing arrears. Consequently, the flagship scheme runs out of funds halfway through the financial year even for those who want work.
According to an analysis by Peoples’ Action for Employment Guarantee (PAEG), a research and advocacy group, 21 per cent of the budget over the past five years has gone into clearing the arrears of previous years. In the current financial year 2022-23, the unpaid dues stand at Rs 16,070 crore. Hence, the PAEG demanded that the Centre allocate a higher budget of Rs 2.72 lakh crore for 2023-24, three per cent more than last year’s estimate to provide 100 days of work per household. This demand was calculated taking into account the pending dues and the increasing demand for work.
The MGNREGS continues to be deeply relevant as millions of rural households have gained employment through it. It had come to the government's rescue during the repeated Covid-19 lockdowns, providing a critical lifeline for millions of migrant workers trekking back from cities to their villages. But the low allocation of funds has undermined its significance.
However, the MGNREGS is particularly vital in times of economic stress and, hence, it is important to make a budgetary provision for the full 100 days and, perhaps, expand it to 150 days of work, given the prevailing dismal employment conditions in the country. The government violates workers’ legal rights every time it does not match the funds to demand or does not pay wages on time.
