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A jobs scheme that steadied India (GS 2 ,The Hindu )

It is now a decade since the Mahatma Gandhi National Rural Employment Guarantee Scheme was launched, and it
can be said with reasonable assurance that the programme has been largely successful in living up to what it set out
to do: provide employment to India’s rural poor and improve their livelihoods. Sceptics of the spending programme,
launched in 2006, had raised concerns that it would be yet another opportunity for middlemen to pocket funds. They
had dismissed the argument that the design of MGNREGS as a demand-driven scheme would make it more
targeted and less prone to leakage. Ten years on, the sceptics have been largely proved wrong. Yes, the efficiency
of implementation of the scheme varies across States, there is a degree of wastage of resources, there is an issue
with delayed payments, works undertaken have not held up in some States, and there remains some information
asymmetry leading to uneven implementation. Yet, by and large, study after study has found that MGNREGS has
served as a source of employment for the poor in distress situations such as drought, crop failures and lean rural
employment days. It has helped raise rural wages steadily over time, and in places where it has been implemented
well, built rural assets such as irrigation canals and roads have augmented local infrastructure.

Yet, it is also evident now that over the last five years there has been sluggishness in MGNREGS’s implementation.
There have been ups and downs in the Central outlay for the scheme, in terms of allocations as a percentage of
overall budget spending and, most importantly, delays in releasing funds to States for wage payments. This has led
to a relative slack in demand and consequently a drop in the work hours and even a decline in the average rural
wage rate increases in these years. This is primarily because both the Congress-led UPA in its second term in
government and the current BJP-led regime have been less than enthusiastic about the need for the scheme.
Indeed, data show that only in the past year has the BJP government come around to realising its utility, even if
grudgingly. Prime Minister Narendra Modi had remarked last year that his government saw MGNREGS as a symbol
of the failures of the Congress governments, and that after 60 years, it was a travesty that we were “still making
people dig holes”. These remarks symbolised, at one level, a flawed understanding of the scheme, and at another, a
negative mindset about demand-driven welfarism. It took a distressed agrarian situation with the failure of
the rabi crop and less-than-optimal rains for the MGNREGS to get its due, and the proportion of delayed payments
was reduced in the first three quarters of 2015-16 from what it was in 2014-15. Even so, the implementation of the
scheme has continued to be better in some States as opposed to even drought-hit States. It is clear that there needs
to be a better political understanding of the need for and the efficacy of welfarism.

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