The government is forming a panel to study the effectiveness of MGNREGA

Over 15 crore of active workers are currently enrolled in the rural job guarantee scheme. File | Photo credit: The Hindu

The central government has set up a committee to review the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), specifically to assess the program’s effectiveness as a poverty reduction tool. The committee, led by former Rural Development Minister Amarjeet Sinha, met for the first time on November 21, 2022 and had three months to table its proposals.

The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005 and the demand-side system guarantees 100 days of unskilled labor per year to any rural household that so desires. There are currently 15.51 million active workers enrolled in the program.

The Sinha Committee has now been tasked with examining the various factors behind the demand for MGNREGA labor, spending trends and variations between states, and the composition of the labor. It proposes what changes in focus and governance structures are needed to make MGNREGA more effective.

“MGNREGA was created as an anti-poverty tool for the rural region, providing them with a safety net in the form of guaranteed work and wages. It was believed that states such as Uttar Pradesh and Bihar, which have higher levels of poverty, were not able to make the most of the program,” said a senior official aware of developments.

In 2015, Prime Minister Narendra Modi famously called MGNREGA a “living monument to the failure of Congressional government.” In a speech in Parliament, he had said, “After so many years in power, all you could deliver was a poor man digging ditches a few days a month.” instrument for shifting income to the poor”.

Also read | Rahul attacks Modi over MGNREGA praise

Higher cost

The current committee will also address the argument that the cost of providing labor has also skyrocketed since the program began.

The committee needs to review the reasons and recommend ways to focus more on poorer areas. “An open scheme like this will always have sharp contrasts. For example, Bihar, despite its level of poverty, does not create enough jobs to make a tangible difference, and at the other end of the spectrum we have Kerala, which is economically better but has used it to create wealth. While Bihar MGNREGA needs more, we cannot deny Kerala the money due to the current structure of the program,” explained one of the committee members.

asset creation

MGNREGA critics also criticize the program for the lack of material wealth creation. The Committee will consider whether the composition of the work currently underway under the program should be changed. It is considering whether it should focus more on community-based assets or individual works.

With four months to the end of the financial year, 59,420 crores have already been spent out of the 73,000 crores sanctioned for the scheme. The Department for Rural Development has recently requested an additional sum of 25,000 crore from the Treasury for expected expenditure before the end of the financial year.

Despite all the criticism, MGNREGA acted as a crucial safety net during the COVID pandemic. In fiscal 2020-21, the number of days worked under the program increased dramatically to 389 million, compared to just 265 billion the previous year. In 2021-22 demand for MGNREGA work remained high and 363 crore man-days of work were generated. According to current statistics, 196 crore man-days of work have already been generated this year.

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