Centre proposes renaming MGNREGA to VB-G RaM G, to change funding pattern

The Centre has proposed a raft of big changes to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) -- apart from renaming it -- as it seeks to increase the mandatory work days from 100 to 125, while altering the current funding structure which shifts a portion of the financial responsibility to the states.

The funding pattern between the Centre and state will change to 60:40 as against the existing maximum 90:10 under the Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (GRAMIN) or VB- G RaM G.

The changes which have been circulated in the form of draft Bill also, according to critics, puts the onus on the Central government to decide in which parts of the country it wants the scheme to run and also empowers the state to stop the scheme for two months of their choice during peak harvest season.

“The state governments shall notify in advance, a period aggregating to 60 days (two months) in a financial year, covering the peak agricultural seasons of sowing and harvesting, during which works under this Act, shall not be,” the draft reads.

“The biggest achievement of MGNREGA was that it made minimum wages a reality as casual labourers now had an option if they did not want to work at a certain rate. But, the changes proposed in the draft dilutes this and open the door for exploitation of agricultural labour,” Nikhil Dey, founder member of Mazdoor Kisan Shakti Sangathan (MKSS) and National Campaign for People’s Right to Information (NCPRI) told Business Standard.

Dey -- who has been associated with MGNREGA right from its inception -- claimed that the draft changes kill all the legal entitlements that the Act provided and makes it an allocation based scheme.

The draft, meanwhile, said that the expenditure under the scheme will depend on the number of persons reporting for work, wage rate and the material and administrative components of the work.

“If the legislation is implemented across the country, the total estimated annual requirement of funds on wage, material and administrative components is ~1,51,282 crores (Rupees one lakh fifty-one thousand two hundred eighty-two crore), including the state share. Of this, the estimated Central share is ~95,692.31 crores (Rupees ninety-five thousand six hundred ninety-two crore and thirty-one lakhs,” the draft reads.

Presently, 100 per cent of MGNREGA wages expenditure is borne by the Centre along with 75 per cent of the material expenditure. States bear a maximum of 25 per cent of the material expenditure.

However, states have the option to forego this burden as well and undertake a maximum of 10 per cent material expenditure burden.

“Today, total expenditure of MGNREGA in say a state like Rajasthan is around ~10,000 per annum. The big question is with the changed funding pattern, will states bear 40 per cent of this expenditure,” Dey questioned.

Critics said that draft Bill also dilutes the existing prohibition on use of contractors for MGNREGA and also the kind of works that can be undertaken under the scheme has also been handed over to the Centre instead of the current provisions of states determining it.

They said the draft Bill also dilutes another provision that guaranteed work within five kilometres of the residential area of a job seeker.

Also henceforth, according to the draft, all unemployment allowance and delay compensation would be paid by the states and Centre will not have much role in the same

“To cater to the changing aspirations, stronger convergence is required to establish an integrated, Whole-of-Government rural development framework covering several complementary government schemes. It is essential that rural infrastructure creation must transition from fragmented provisioning to a coherent and future-oriented approach and it is also essential that resources are distributed in a fair manner to reduce disparities and promote inclusive growth across all rural areas of the country based on objective parameters,” the statement of objective of the draft Bill reads.

The Bill also empowers the Centre to make normative allocation to each state, to be estimated based on objective parameters, as prescribed in the rules. Further, expenditure in excess of the approved normative allocation shall be the responsibility of the state governments.

MGNREGA was notified first on September 7, 2005 initially covering just 200 districts in the first phase from February 2nd 2006. This was then extended to an additional 130 districts in the financial year 2007-2008 (113 districts were notified with effect from April 1st 2007 and 17 districts in Uttar Pradesh were notified with effect from May 15th 2007).

The remaining districts were notified with effect from April 1, 2008. Since then, the scheme has covered the entire country with the exception of districts that have a hundred per cent urban population.