India : Why This Attack on MGNREGA ?

One knows who will suffer if the Narendra Modi government succeeds in weakening MGNREGA.

The largest public employment programme the world has ever seen is in trouble. In 2013-14, 74 million individuals in 48 million households in rural India were employed under the Mahatma Gandhi National Rural Employment Guarantee Act programme (or MGNREGA as it is called), with each household on average finding work for 46 days. This cost the Government of India Rs 39,000 crore last year, or barely 0.5% of gross domestic product. But the National Democratic Alliance (NDA) government has made no secret of its lukewarm support for the MGNREGA which it sees as too closely identified with the previous United Progressive Alliance government. The Government of India has now imposed a cap on the release of funds to individual states. And two major proposals that are being seriously considered are, one, to restrict the scheme to identified backward blocks in the country and, two, to alter the ratio of expenditure between wages and material in favour of the latter. All these add up to essentially dismantling the demand-driven character of MGNREGA and reducing the amount of employment that can be generated every year. This is the beginning surely of a gradual whittling away at the programme, with the ultimate aim perhaps of winding it up altogether. If that were to indeed happen it will be a great disservice to the tens of millions of the poor and marginalised who have benefited from this guarantee of up to 100 days of work for a rural household. True, MGNREGA has been neither an unqualified nor a universal success. But we should not deny that it has been a moderate success in providing employment support to the rural poor.

An enormous amount of independent research has been conducted on the working of MGNREGA since the programme was launched in 2006. Unless one is selective about choosing the results of such research, the messages from this research are unambiguous. There are wide variations in the working of MGNREGA across the country, but on balance four positive outcomes stand out. MGNREGA provides some income security to the rural poor ; it has resulted in the creation of productive assets in and outside agriculture ; the high level of female participation (40% of those on the worksites are women) has contributed to a degree of women’s empowerment ; and a modest tightening of the rural labour market has taken place, contributing to higher real wage rates and reservation wages. These are major achievements by any standard and stand testimony to the value of the MGNREGA.

There are indeed many major problems in the design and administration of the programme. Corruption occurs ; at times, wages are paid late ; gram sabhas do not always have the technical human power to design the right kind of works ; and adequate attention is not always paid to the type and quality of assets created. Nonetheless, none of them can claim to constitute a fundamental questioning of MGNREGA. They only point out the challenges that need to be faced and the improvements that need to be made if this massive programme is to truly succeed.

Critics who have never been willing to accept the need for a demand-driven, self-selecting employment guarantee scheme in rural India have been quick to use anecdotal evidence of one or the other shortcoming in some areas to make countrywide generalisations and trash the programme. One such dismissal is that MGNREGA is nothing but a dole and labour is paid for just turning up, which makes it only an inefficient form of cash transfer. This is not true, if one considers the assets that have been created, especially in the form of viable schemes for minor irrigation, soil regeneration and watershed development. Another criticism is that MGNREGA is making Indian agriculture “unprofitable”. MGNREGA functions mainly in the lean season so it is difficult to argue that employment thus provided causes labour scarcity later, during the peak agricultural months. Further, MGNREGA provides under 50 days of work every year for every household with a job card (or under 25 days per working member). This surely is insufficient for labour to decide it can afford to turn away nationwide from agricultural work. MGNREGA, however, has certainly contributed to a growth in the real wage rate of agricultural labour since 2006, something that is to be welcomed and not criticised. But the rise in real wages has by no means been so sharp as to render cultivation with hired labour unviable. Employers of rural labour everywhere and at all times ring the alarm bells whenever workers are able to find some alternative employment and then demand higher agricultural wages. The brush that is now used to tar MGNREGA must be seen as a reflection of this phenomenon.

There is an obvious ideology at work behind the long-standing resistance to MGNREGA which has now found a friend in the Government of India. Any activity that puts even a modest amount of additional income in the hands of the rural poor – and in the process gives them a measure of self-confidence and catalyses a degree of empowerment – is deeply resented. The decision then must be to dilute the programme so that the source of strength is cut at the very root. The argument is packaged in the form of doing away with “inefficient” programmes ; but the argument is actually the opposite. Dilute MGNREGA because even its modest efficiency poses questions to the established order.


Les opinions exprimées et les arguments avancés dans cet article demeurent l'entière responsabilité de l'auteur-e et ne reflètent pas nécessairement ceux du CETRI.