MG-NREGS job demand dips: Due to urban revival or under-reporting?

Workers are entitled to get compensation, at 0.05%, for each day’s delay beyond 15 days. However, such compensations aren't being paid.

Demand for work under the Mahatma Gandhi National Rural Employment Scheme (MG-NREGS) has been on the wane since July this year and fell to its lowest in 21 months to 2.6 crore persons in October, seemingly mirroring an improvement in economic activities in the urban centres, which is also borne out by several other indicators.

But there is also a view that the authorities are going slow on reporting the demand at the ground level, given that the funds released for the scheme have been nearly used up in most areas and fresh allocations are yet to be made by the Centre.

Of course, the October numbers are subject to change, as collating data from various states takes time.

Debmalya Nandy of MG-NREGA Sangharsh Morcha attributed the decreased demand to paucity of funds for the scheme. Of the Rs 73,000-crore budgetary allocation for the scheme, 97% or nearly Rs 71,000 crore has already been spent till November 2. The rural development ministry has already sought an additional outlay of Rs 25,000 crore for the popular scheme in the supplementary budget for 2021-22.

“Taking into consideration the arrears (around Rs 17,000 crore) of last year, the MG-NREGS fund is in negative balance now. There is hardly any movement on the ground. Many chief ministers, including Tamil Nadu’s MK Stalin, have already written to the Prime Minister seeking more allocation for clearing the pending wages. The whole process has been slowed down,” Nandy said.

Odisha chief minister Naveen Patnaik also wrote to Prime Minister on Tuesday drawing his attention to the fact that the Centre is liable to pay Rs 1,089 crore to clear MG-NREGS wage and material payments in the state.

The scheme’s mandate under the MGNREG Act, 2005, is to provide at least 100 days of ‘wage employment’ in a financial year to every rural household whose adult member volunteers to do unskilled manual work. However, while an average of only 51.52 days of work was provided to such rural households in 200-21, the year which saw a big spike in outlay for the scheme owing to the pandemic, the figure so far this year is just 37.09.

Rajendra Narayanan, professor at Azim Premji University, said, “While the Act is meant to be demand-driven, in reality, lack of adequate funds has meant that work demand does not even get registered. So, the decrease in the number of persons demanding for work from July to September is a consequence of monsoon and work demand suppression. Moreover, on the NREGA website, while the aggregate person days of employment generated nationally is easily available, aggregate person days of employment demanded is not (only the number of persons who demanded work is provided). This makes it harder to estimate the true unmet demand.”

Libtech India, of which Narayanan is a member, came out with a report on MG-NREGA recently, pointing out among other things that wage payment under the scheme is delayed by several days that the mandated 15 days. Narayanan said the delay in wage payment could also be the reason why demand for job under MG-NREGA is less now.

Payment process under MG-NREGS consists of two stages. After work is completed, a Funds Transfer Order (FTO) with worker details is digitally sent by the state to the central government by panchayat/block. In the next stage, the central government then processes the FTOs and transfers wages directly to the workers’ accounts. This second stage is entirely the Centre’s responsibility. As per the guidelines, the first stage must be completed in eight days and the second within seven days after that. Workers are entitled to get compensation, at 0.05%, for each day’s delay beyond 15 days. However, such compensations aren’t being paid.

“To analyse Stage 2 delays, we randomly sampled 10% of FTOs from one block per district per state for 10 states between April, 2021 and September, 2021. This adds up to 18 lakh transactions. Stage 2 for 71% of the transactions exceeded the mandated 7 day period. Stage 2 for 44% of the transactions exceeded 15 days and Stage 2 for 14% of the transactions was delayed beyond 30 days,” LibTech said.