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MGNREGA as Distribution of Dole which can alone lift them above pov-
erty? The available evidence suggests
otherwise—that it only helps the poor to
subsist at a level below the poverty line
Govind Bhattacharjee (BPL) and that the intended benefits do
not always reach them.

According to the evidence t is now 11 years since the Mahatma The Ministry of Rural Development
presented in the report of the Gandhi National Rural Employment (MoRD) claims that MGNREGA marks a
Guarantee Act (MGNREGA) was enacted paradigm shift from all previous allo-
Comptroller and Auditor General
by the United Progressive Alliance (UPA) cation-based wage employment pro-
of India and studies elsewhere, government to eliminate poverty in grammes and is unlike any other in its
11 years of the Mahatma Gandhi India. While the Congress party as well scale, architecture and thrust with its
National Rural Employment as a section of economists believe that it focus on transparency and accountability.
has benefited millions and was responsible It combined several anti-poverty employ-
Guarantee Act have not been able
for bringing the party to power for the ment generation programmes and was
to make much of a dent in rural second consecutive time in 2009, many launched with the objective of bringing
poverty. This article also suggests economists have accused it of draining livelihood security of households in
some innovative ways to help our precious resources without getting rural areas by providing at least 100
concomitant benefits. Though the Prime days of guaranteed wage employment
improve the outcome
Minister Narendra Modi had criticised in every financial year to every house-
of the scheme. MGNREGA as “a living monument” of the hold whose adult members volunteer
failure of the UPA government because for unskilled manual work.
of which even “after 60 years of Inde- In the Union Budget for 2015–16,
pendence, people had to dig pits,” con- `34,699 crore were earmarked for
siderations of realpolitik seem to have MGNREGA, and in the current fiscal,
twisted the thinking of the National `38,500 were allocated to the scheme.
Democratic Alliance (NDA). The progra- Similar amounts were provided every
mme’s 10th anniversary in 2016 was cel- year throughout the last decade. More
ebrated by the NDA government and the than `3,00,000 crore have thus been fed
Congress alike with a great deal of fan- into MGNREGA so far, but their effect in
fare and with both claiming credit for its making any significant reduction of
successful implementation. poverty for the country as a whole still
The country is still recovering from remains to be seen, despite contrary
Views expressed in this article are strictly two successive droughts and MGNREGA claims by its hard-core supporters. The
personal. can justifiably relieve rural distress to issue has become so emotive that even
The author gratefully acknowledges the some extent. Undoubtedly it also provides a mild criticism of this programme
anonymous reviewer whose comments have valuable rural employment during seasons evokes the strongest and loudest chorus
been taken into consideration while revising when there is little farm-based activity. of condemnation from its defenders,
the article. But the moot question is, does it end the and the high pitch of emotions often
Govind Bhattacharjee (govind100@hotmail. poverty of those it employs? Does it silences the demands for a dispassion-
com) is a Director General at the office of the empower them with education, health ate and objective analysis of its benefits
Comptroller and Auditor General of India.
and employable skills, a combination of vis-à-vis the costs.
Economic & Political Weekly EPW JUNE 24, 2017 vol lIi nos 25 & 26 29

right. But But it is equally true that many ventions were often guided more by the capacity of the states to utilise the studies conducted over the years point electoral reasons than by concerns of funds productively remains a crucial to the suboptimal performance of the growth and development. per of such a scheme on poverty alleviation average wages increased from nearly capita savings. impact on rural poverty has at best been serious deficiencies like non-transparent ture wage rates. Most per household was declining over time report on the Performance Audit of significant has been the impact on rural (Gaiha and Jha 2012). monthly intensity of poverty in the beneficiary was negated by the decline in employ- per capita expenditure on food. The result was issue—and these capacities vary widely scheme due to a number of factors.000 spent on MGNREGA questions will inevit- 50.00.00. North East. and given the huge resources being 60. direct transfer of funds having healthcare and debt repayment (Karee. These the colossal leakage of public funds. smallholder farmers.00. The MGNREGA-notified only modest. education of dependents. its MGNREGA in 2008 had pointed out some demand and wages. the benefits to a rural household like annual per capita income. been abolished. The CAG report on MGNREGA—Report choice and capability.00.00. An earlier CAG monthly per capita expenditure. 30.000 as the cost of administrative mechanisms 20. development of the budgets.000 being spent on these right-based schemes.000 to extend these rights to the intended 10.00.and entitlement-based programme of the reported figures.00.000 30.00. consumption effects or enhancement of can really address or reduce poverty.00. 2017 vol lIi nos 25 & 26 EPW Economic & Political Weekly . no 6 of 2013—observed that even though ing the gender-skewness (Pankaj and ment as an essential element of strategy. access to healthcare facility.000 but the cost to secure these rights as well 20. driven and bottom-up as envisaged comes. but unlike in the earlier years. poor record maintenance demon- highlighted the benefits to women and The moot question is whether any such strating the lack reliability and authenticity Adivasis in terms not only of income. thus giving states more mulla et al 2013) Many critics pointed out that the inter- control over the use of these funds. weak across the states.000 Number of poor 60. studies indicate that the scheme was or almost non-existent vigilance and moni- It is undeniable that MGNREGA has becoming supply-driven and top-down toring over the use of these funds and helped alter the rural scenario in India in nature. rights of the disabled. The tasks of the now-defunct Maharashtra Nagaland Uttar Pradesh Assam Bihar Chhattisgarh Goa Gujarat Haryana Jammu and Kashmir Madhya Pradesh Andaman and Nicobar islands Chandigarh Dadra and Nagar Haveli Daman and Diu Lakshadweep Andhra Pradesh Arunachal Pradesh Jharkhand Karnataka Kerala Manipur Meghalaya Mizoram Odisha Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand West Bengal Puducherry Himachal Pradesh National Advisory Council which pro- moted and advocated for many of these schemes were to provide inputs in the “formulation of policy by the government” and bring a “special focus on social policy and the rights of the disadvantaged Source: Report No-6 of 2013—Union Government (Ministry of Rural Development). etc. livelihoods of now being routed through the state for food security. However. benefits by way of additional incomes were the rights to education. defi- wages have increased significantly across ciencies in the planning and implemen- all states since 2006. etc. provided under the scheme. evidence of which can be found in Studies have noted a positive impact of (Mukhopadhyay et al 2015) and that the the reports of the Comptroller and Auditor MGNREGA funds on household income and average number of days of employment General of India (CAG). but also in correct.00. groups. the average wage cost or wages paid was Tankha 2010). not address the essential question of 2007–08 and 2011–12.000 programme obviously has an opportunity 70. the employment have improved as a result of this scheme development of skill-based capacity which per household increased from around (Sarkar et al 2011).000 70. Huge sums of money are 40.00. especially on agricul. without integrating capacity develop.000 of these funds. Seasonal migration of alone can ensure gainful employment `40 per person-day to `60 in 2009–10 rural labour has come down significantly along with economic growth. suboptimal achievement of their out- over the last one decade to a large extent. and then again declined to around `40 30 JUNE 24. recording of employment demand.000 beneficiaries are not given much consid- 0 0 eration. Socio-economic variables While such programmes may reduce the rising. etc (CAG 2008).00. strengthening of the funds meant for this programme are used by the rural households primarily panchayats in tribal areas.” and it made regular recommen- The NDA government did not reduce the due to the opportunities of employment dations to the government on multiple budget allocation for MGNREGA after com.000 Number of households ably be raised about the opportunity cost 50. Studies have also Suboptimal Impact tation. condition of the dwelling will always remain suboptimal as it does `80 to `120 per person-day bet ween houses. annual households in a limited scale. While the per child expenditure on education. the impact ment provided per household. instead of remaining demand.000 10.000 cost.00.000 40. while the and diverse areas like improvements in ing to power.00.COMMENTARY Figure 1: Poverty Levels and Average Annual Number of Households Provided Employment in States Money spent on any social welfare 80.00.

Odisha and Uttar Pradesh—the skill set.8 lakh) were is poorly targeted. but health and acquisition of an employable shot of these observations may provide Bihar. “the poorest of poor Rao’s Employment Assurance Scheme of 12. and empower. An asset is created under MGNREGA. CAG detected widespread instances of benefits. corruption and leakages that afflict number of works actually completed There was thus little correlation between MGNREGA in most states. As the report notes Nadu. covered were not poor. ment. A snap- better utilisation of MGNREGA funds. quently only 20% of total households the rates of decline in poverty in various About the so-called “durable assets. total eligible population. Actually in the name of employ. It is only a palliative. There are of course some they are not difficult to divine. The report further found that while there were 1. But the most damning finding of the Yet. corruption. almost the same tribution of doles. beneficiary. Only a few states could cover could have been utilised to create assets. 2017 vol lIi nos 25 & 26 31 . which may for employment when demanded by the lisation of MGNREGA funds along with alleviate their poverty only temporarily. Rajasthan national average. Rajasthan subsistence without any real empower. audits check only a small sample of the the richer ones most of the households health and skill—that can eradicate pov. It had failed to make any steadily from about 20 lakh in 2007–08 and Uttar Pradesh) accounted for 50% of dent in poverty and it was not due to the to more than 80 lakh in 2011–12. The success of the UPA in any correlation between the number of The CAG report is silent on the reasons 2009 elections need not necessarily rural poors in a state and the number of for the observed lack of correlation bet. do not overcome their poverty until they ciencies and inadequate internal con- Chhattisgarh. notably Assam. and 80% of the works taken always been claiming in order to justify ment rose from 875 million person-days up under MGNREGA remained incomplete. the Employ- the SCs during 2007–12. In West Bengal. as the experience with other and Scheduled Tribes (STs) continued to Gujarat and Punjab. households given employment under the ween MGNREGA and poverty levels. the the total expenditure under the scheme.687 Maharashtra. and that too one that maintenance or incorrect maintenance number of households (52. Programmes like MGNREGA do some interesting insights: three most poverty-stricken states of not facilitate any of these and merely (i) Obtaining a job card was no guarantee the country—had shown very poor uti.232 million in 1995–96. only four states (Andhra rate of decline was any faster than the the number of works taken up increased Pradesh. bad economics. almost the entire population of poor capacity and skill (Bhattacharjee 2016). in 1990–91 to 1. while there were total development ladder. Thus in Bihar.” were provided employment under the states did not show that Maharashtra’s the CAG report has observed that while scheme. Since the SCs/ The report also noted that Bihar. It is also noteworthy that In fact.” This directly contradicts had provided 100 workdays per family only after the corresponding works are what the advocates of the scheme have in 200 backward districts. the share of both Scheduled Castes (SCs) households. by ensuring mere in providing livelihood security could 78 lakh poor people in the state. the benefits similar anti-poverty schemes had shown. Madhya Pradesh. 58 lakh households were covered keep them below the bottom of the with alarm. in Tamil These programmes only endeavour to wages in 23 states. decline from around 30% to less than 20% did not go to the poor as intended. of basic records was noticed in 18 to 54% provided employment under MGNREGA. trols with very poor monitoring in the West Bengal which seemed to have made ment comes only through education. Tamil Nadu and are empowered to do so. shtra had a similar scheme. In fact. and not even smart politics. CAG detected over 47. implementation of MGNREGA. ment Guarantee Scheme (EGS). Thus. The poor instances of leakages. COMMENTARY in 2011–12. non-payment and delayed payment of nearly five crore. its continuance in the same form. not all the poverty. comparison of poorest among the rural poors. but The CAG report also cites numerous MgNREGA. in ing the poor the only tools—education. Non- people. record maintenance at all levels. to around 48% during the last three years.8 crore poor people in while draining precious resources that while representation of women increased the state. instead of addressing the roots of cases where beneficiaries were not pro- while in the poorer states. Rural employ- completed. Maha. 08 to only about 2. In contrast. while the number of poor were loyment while ensuring economic growth. P V Narasimha and then declined to 2 million in 2011– states categorically. their exclusion meant 46% of the rural poor but could utilise ded it. vided employment on demand. conse. Swaminathan S A Aiyar. In Economic & Political Weekly EPW JUNE 24. “The scale of inadequacies under MGNREGA. Rajasthan.3 crore poor ment. erty through generation of wealth in the (ii) Even after receiving employment. MGNREGA is a scheme for the dis. they only perpetuate it by deny.5 million in 2010–11 mentation of MGNREGA. and one that works suboptimally too of the test checked gram panchayats. have flowed from MGNREGA. As observed by the columnist that the benefits were not reaching the only 20% of the MGNREGA funds. only 19 lakh households could derive the economy and providing productive emp. pervasive and extensive deficiencies in while it accounted for 1. most of the funds were still locked up were not fully able to exercise their rights 1994—of which MGNREGA was a replica— in works in progress. provide subsistence-level aid. but such dole schemes never work. the Congress was thrashed in the CAG report was that there was hardly Tools to End Poverty 1996 elections. As the CAG report As Aiyar had pointed out. not be fully ascertained in view of the gave employment to 53 lakh households. Odisha. and CAG poor households could be covered. ineffi- notable exceptions like Andhra Pradesh. Mahara- for the STs and a little more than 20% for largely went to the non-poor. In fact. This was not only increased from about 1 million in 2007– the poverty level in a state and the imple. which STs comprise the most vulnerable sections rashtra and Uttar Pradesh accounted for guaranteed work for anyone who deman- of the rural poor.

71 lakh km of roads for new Times of India (2016). MGNREGA works allocated to tions were eligible for coverage under “magic” pits by the locals. This is a 100% centrally of durable and productive assets. and combat agrarian distress. village to construct the soak pits. 32 JUNE 24. to the effect that rural house. The MoRD PMGSY was launched in 2000 to provide to the PMGSY. grounds.COMMENTARY such a situation the legal guarantee of connectivity and 3. sponsored scheme financed by a cess on There are also other imaginative ways had benefited 20.67 lakh unconnected habita. and instead of markets. the four-foot-deep in February 2017. linked with augmentation of irrigation strategy.48 lakh households. CAG successful in building up a large. including construction house in the village. always remain suboptimal. including ually drains down into aquifers. The work was to be awarded flowing open drains redundant. malaria and various other maintained.14 lakh crore had continue to plague rural Maharashtra. Similar potential. that the deliv. areas which are so starved of these. MGNREGA study undertaken by it along with the ment Agency (NRRDA). There are many tion of the Scheme in various ways. it has been reasonably linked with imagination. The ministry itself relaxed of skilled or semi-skilled workers.252 crore which were it was stipulated that same work could pipe that has four equidistant holes at undertaken under the Scheme were not not be taken up under MGNREGA and the the top. Though way behind Vision and statesmanship are closely tions (PRIs) to monitor the implementa. Roads ing the environment. ble assets.341 crore).” usual tender procedures. By giving access to health and roads and creating other assets in the rural reducing poverty. called (CMIE). with a ban on con. been spent under the PMGSY and 4 lakh km Water flowing into the 200 soak pits grad- CAG noticed large gaps in the envisaged or 54% of all-weather roads.68 lakh km under pits dug are making the usually over- 100 days of employment on demand and upgradation. which according to the ministry. protect- were not maintained. has since introduced some reforms in the all-weather connectivity to unconnected holds could get the intended employment implementation of the programme to habitations with populations of 500 each while helping create durable assets. assets and capacity in the economy. of eligible habitations. requires a vision to rise above the nar- despite loud protestations of its supporters. thus other aspects of the implementation of to road contractors after following the depriving mosquitoes of their breeding the Scheme were not fully verifiable. In short. 2017 vol lIi nos 25 & 26 EPW Economic & Political Weekly . all. behind every households had increased from 83 lakh the programme. providing ing the groundwater level. especially in the in plains areas and 250 in hill areas as part achieving a judicious balance between drought-affected areas to create assets of the government’s poverty reduction capital intensive growth and labour-inten. Let ing the same period. To avoid overlap. increased to `48. education to people living in remote areas. MGNREGA Guidelines require all-weather connectivity to 97. while MGNREGA. A layer of sand and fine gravel is permissible. against the back- 60:40 wage-material ratio was also not PMGSY they work under the supervision drop of dengue. but by address- left much to be desired. while under the free from mosquitos. Monitoring and quality to utilise MGNREGA as the example of a According to a report released by the State assurance in this scheme are provided village in the Nanded district of Maha. upgradation. of MGNREGA funds for other uses in a tractors. Both need Within a year. though spending more than Budgetary allocation for MGNREGA was gence with other poverty alleviation twice the amount spent on the PMGSY dur. Accounting for funds and at the same time provided productive mostly being employed for. But then even a poorly designed scheme contrast.499 crore in the revised us consider the example of the Pradhan synergise the two schemes by making the estimates of 2016–17 (actual expenditure Mantri Gram Sadak Yojana (PMGSY). improving health No wonder. it builds the future. therefore. builds only mud roads.547 crore did not result in creation PMGSY links villages with expensive asphalt allow the water to percolate slowly into of durable assets. which was unnecessary because spread under and around the pipe to for `6. As reported by the in October 2016 to 167 lakh households of about 3. and thereby ber of states. based on a by the National Rural Roads Develop. (iv) Monitoring was by and large absent. The household entitlement was and management standards to ensure convergence with other schemes run by increased from 100 to 150 days of work in sustainable management of the rural other ministries is essential for creation drought-affected regions of 10 states in roads network. it had rendered the village large number of states. The expenditure on works PMGSY. In row considerations of vote-bank politics. Bank of India in March 2017. ment. and to set uniform technical sive poverty alleviation measures. The labour component of MGNREGA available in 2015–16 was `37. recharg- monitoring mechanisms in a large num. funds are being used in the Tembhurni Centre for Monitoring Indian Economy About 1. they would only perpet. rashtra has shown recently. the states and the panchayati raj institu. Until March 2014. initial targets. facilitate transportation of rural produce and sanitation. 2015–16. mosquito-borne diseases that severely this provision. the ground that suck in the waste water. It only uate it while draining precious resources. it includes them in growth and develop. Necessary records employment while building up capital ing poverty by building capacity. high-speed diesel. Postscript much better through appropriate conver. imaginative ways to make MGNREGA noticed significant shortages in each of weather rural road network in the country deliver. It was possible to budget from `47. not by providing doles as it is these mechanisms. `1.838 or 50% eliminating water scarcity in the village. MGNREGA only provides for sub- like this could have been implemented sistence and could hardly build any dura.000 crore in the 2017–18 schemes in an imaginative manner. They are covered with a cement (iii) Works of `2. building networks for irrigation. CAG detected diversion roads. The statutory only unskilled labourers. by providing drinking ery and outcome of such schemes would to the market and hence development of water. were constructed.

Jagdish Kumar and Supriya (2011): also tagged it to the National Electronic CAG (2008): Report No 11 of 2008. Jaipur. ation. etc. No 40. Indian Space weaknesses pointed out in the article Res 2013. Economic & Political Weekly EPW JUNE 24. Women Workers: A Study in Four States. arch Review Conference Number. Fly. To Not the Symptoms. were also introduced in C A Rama Rao (2013): “Impact of National Tembhurni. V V Singh (ed). nomic & Political Weekly. Raghav and Raghbendra Jha (2012): Rural Poor: A Study in Burdwan District of metic measures like introducing awards “NREGS: Interpreting the Official Statistics. 6 October.1. Pankaj. “Empowerment Effects of the NREGS on Research Organisation and National Infor.12944/CARJ. Abhiroop.” Eco- map Towards Development.” West Bengal. No 30. doi: http://dx. 2017 vol lIi nos 25 & 26 33 . 10. Vol 50. Times of India (2016): “Maharashtra Villages Can schemes and for effective implement. Vol 45. S Kumar and Show World How to Beat Zika” by Prasad Joshi. 24 July.02. Himanshu and M R Sharan (2015): “NREGS in Rajasthan. the structural Rural Employment Guarantee Scheme in India on Rural Poverty and Food Security. transparency and accountability.doi.” Agricultural Economics. Kareemulla K.” Curr Agri Remote Sensing Centre. P Ramasundaram. 7 February.” Economic & 2.” Indian Economy: A Road. and Auditor General of India. Govind (2016): “Treat the Disease.82 crore assets created under MGNREGA References Political Weekly. But. remain unaddressed. COMMENTARY In collaboration with the National September 2016. matics Centre. Sarkar. 8 February. MoRD ing Pen. one crore of the estimated Mukhopadhyay.1. cut the delay in payment of wages. Vol 47. Prattoy. have been geotagged for better monitor. 1(1): 13–28. Rese- for convergence with other livelihood Economic & Political Weekly. Comptroller “Impact of MGNREGA on Reducing Rural Pov- Fund Management System. Some cos. erty and Improving Socio-economic Status of Gaiha. Issue No 6. Ashok and Rukmini Tankha (2010): Bhattacharjee.