Fix MGNREGS first, ‘smart villages’ can wait

The Cabinet on Wednesday took two decisions that focus on rural India: First, it approved an additional 50 days of work for farmers/workers under the MGNREGS over and above the 100 days in areas where drought or natural calamities have been notified; and, second, it okayed a plan to develop a cluster of ‘smart villages’ to transform rural areas to economically, socially and physically sustainable spaces. The two decisions provide an interesting snapshot of the gap that exists between reality — rural distress is spreading at an alarming pace and hence the need to extend the scheme — and the ambition for a 360-degree transformation.

The MGNREGS decision is a well-meaning one and will enable states to ensure additional wage employment to the poor in drought-affected areas, help tackle rural seasonal unemployment and reduce distress. But this measure could end up being a cosmetic one unless the government fixes the existing problems of the scheme, the key being delayed payments, which have lead to a decline in people claiming employment under the plan. In the last fiscal, households that completed 100 days of wage employment — the minimum guaranteed under the scheme — declined by 50%. It was 2.444 million in 2014-15 against 5.173 million in 2013-14 . The average number of days of employment provided per household nationally in 2012-13 was 46.2, but this fell to 39.99 in 2014-15.

The delay in payments of wages has happened due to budgetary and payment delivery constraints. The budget for the scheme declined from Rs 40,100 crore in 2010-11 to Rs 33,000 crore in 2013-14 during the second term of the UPA. In 2014-15, the allocation by the NDA increased marginally to Rs 34,000 crore; this was further raised to Rs 34,699 crore in the current budget.

Earlier this year, a government review showed that only 28.22% of wages were paid within the stipulated 15 days till December, indicating that 72% of the payments were not handed out in time. These delays continue despite several steps taken including fixing responsibilities on officials creating roadblocks for payments. 

The tardy implementation of the plan forced the government recently to direct states to take steps to improve the implementation and outreach of the programme by running campaigns to popularise the scheme, complete the unfinished projects and ensure payments. While grand and expensive schemes like “smart villages” are attention-grabbers, what will finally make more political and economic sense is to run schemes like the MGNREGS, which has the capacity to transform the lives of the poorest of the poor in a major way, with much more thought and passion.

Source: Hindustan Times, 18.09.2015

'MGNREGS reduced poverty, empowered women'

The programme reduced poverty by up to 32 per cent and prevented 14 million people from falling into poverty.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) reduced poverty by up to a third and gave a large number of women their first opportunity to earn cash income, a new research has found.

Officials from the Ministry of Rural Development (MoRD) and the National Council of Applied Economic Research (NCAER) released a new report Wednesday evening which used data from two rounds of the India Human Development Survey (IHDS) – 2004-5 and 2011-12. The survey was conducted by the NCAER and University of Maryland, involving over 26,000 rural households across the country.

Comparisons between the two survey rounds found that the programme reduced poverty overall by up to 32 per cent and prevented 14 million people from falling into poverty. “Economic growth contributed to overall poverty reduction during this period, but we found that the MGNREGS also played a significant role,” Sonalde Desai, principal author of the study, said.

The numbers show that the MGNREGS is likely to have had a much smaller impact on the rural job market and on rural wages than is commonly believed. At an all-India level, the average days worked under the MGNREGS is less than four, pointing to the relatively small impact of the scheme to the overall rural job market. “On the surface, MGNREGS has virtually no impact on rural employment patterns since it fails to add to the number of days that individuals work. But it seems to attract individuals who were previously employed in less productive work, thereby raising their incomes,” the report notes. Overall, while the period of 2004-5 to 2011-12 saw a sharp rise in rural wages, MGNREGS plays only a modest role in wage increases, the report notes. The United Nations Development Programme on Wednesday also released a review of recent research studies on the MGNREGS which found similarly, and found that the scheme’s uptake is far greater in the lean season that in the peak agricultural season.

The part of the rural job market that the MGNREGS did seem to have a more significant impact on was for female work. About 45% of female MGNREGS workers were either not working or worked only on a family farm in 2004–05, indicating that the MGNREGS “may well be the first opportunity many women have to earn cash income”. As a result, there was a substantial increase in women’s control over resources — including cash in hand and the likelihood of having a bank account — and improvement in women’s ability to make independent decisions about their health, the report found.

Children from MGNREGS households were likely to obtain higher levels of educational attainment than their non-MGNREGS peers, the report found, and were less likely to be working.

While financial inclusion rose in general during this period and reliance of moneylenders declined, the effect was much greater for MGNREGS households, as was the decrease in the overall interest paid by the household. Simultaneously, accessing of formal credit grew.

What holds the MGNREGS back is “work rationing” — the inability of all interested households to get 100 days of work — as a result of mismanagement or pressures, and affects the poorest the most, the report finds.

“These findings clearly show that there is a large unmet demand for MGNREGS work,” Jugal Kishore Mohapatra, secretary, Ministry of Rural Development, said, adding that a paucity of funds at the level of implementations and erratic fund flows, particularly in 2014-15 had affected both demand and supply. “For the last four months, our job has been convincing everyone that the scheme is not going away and rebooting demand,” Mr. Mohapatra said.

Keywords: MGNREGA, Mahatma Gandhi National Rural Employee Guarantee Scheme, rural job scheme, Ministry of Rural Development, National Council of Applied Economic Research, United Nations Development Programme

Source: The Hindu, 13 August, 2015

The digging-holes myth

The view of MGNREGA as a makeshift work programme is far off the mark.

Written by Jean Dreze | Published on:July 1, 2015 2:56 am 

Few social programmes in India are more resented by the corporate sector than the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This is easy to understand, considering that one of the primary aims of the MGNREGA is to empower workers and reduce their dependence on private employers. Naturally, employers see this as a threat to the availability of cheap and docile labour. This resentment tends to generate a steady stream of criticism. Going by these reports, one would think that public works initiated under the MGNREGA are wholly useless. As a recent editorial put it, “…in most places across the country, this [MGNREGA] meant digging up trenches for no purpose whatsoever and then filling them up”. No evidence was provided for this sweeping statement. During the last few years, I have seen hundreds of MGNREGA works, and I do not remember a single case that resembled digging trenches and filling them up. Sure, I have seen some useless MGNREGA works (like a pond being built at the top of a hill in Sonbhadra district, Uttar Pradesh), but I have also seen many useful ones. Given the lack of careful studies on the productive value of MGNREGA works, the larger picture is not very clear. But some recent studies suggest that the view of MGNREGA as a makeshift work programme is far off the mark. Among them is a pioneering study by Sudha Narayanan and her colleagues at the Indira Gandhi Institute of Development Research, who examined 4,100 MGNREGA assets scattered over 100 villages of Maharashtra. Among the sample works, 87 per cent were functional and 75 per cent contributed directly or indirectly to better agriculture. An overwhelming majority (90 per cent) of the users of these MGNREGA works considered them “very useful” or “somewhat useful”. As the principal author notes, MGNREGA workers in Maharashtra have “replaced scrublands with forests, built earthen structures for impounding water and preventing soil erosion, cleared lands and levelled them to make them cultivable”, among other activities (available at arcg.is/1QYdt8y). This is hardly “playing with mud”, to quote another colourful description of MGNREGA work from the mainstream media. While the Maharashtra study focuses mainly on people’s perceptions, another recent study (by Anjor Bhaskar and Pankaj Yadav at the Institute for Human Development) looks at the objective measures of economic returns on MGNREGA works in Jharkhand. This study inspected nearly 1,000 randomly selected dug wells constructed under the MGNREGA in the last few years. Interestingly, the proportion of completed wells in the sample (70 to 80 per cent depending on whether one insists on the construction of a parapet) was not too different from official - See more at: http://indianexpress.com/article/opinion/columns/the-digging-holes-myth-2/#sthash.1efWFcuX.dpuf

Green India Mission to Converge with NREGA to Grow Forest Cover

Yogima Sharma

New Delhi:





Both the schemes will facilitate afforestation on 10 million hectares of land over the next decade

The Centre has decided to extend its flagship rural jobs scheme to include afforestation as part of a move to create more durable assets through the programme that Prime Minister Narendra Modi recently derided as a living monument to the previous UPA government's failures and promised to overhaul it.Officials said the National Mission for a Green India (MIG) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will now converge to facilitate afforestation on 10 million hectares of land over the next decade, along with providing forest-based livelihood income to three million households. Budget 2015-16 has made an initial allocation of `. 34,699 crore for MGNREGA, . 5,000 with a possibility of an increase of ` crore if buoyancy in tax collection allows, making it the highest allocation to the scheme since it was launched in 2006.
“Convergence of GIM with MGNREGS will help bring about better coordination in developing forests and their fringe areas, ensuring economic security to the backward sections in the rural sector,“ a senior government official told ET.
According to the official, the ministry of environment, forests and climate change and the rural development ministry have jointly agreed to converge the two schemes with a combined mission to increase the forest cover in the country by five million hectares while improving the quality of another five million hectares of forest land and increasing the forest-based livelihood income of about three million households.
“The progress of plantation under this convergence would be periodically monitored, using the remote sensing data, and photographic evidence shall be captured on a monthly basis,“ said the official, requesting not to be named.
The mission targets 10 million hectares of forestnon-forest land in 10 years, starting from 2015, and funds for the mis sion will be shared by the two central ministries.
All wages under MGNREGA will be met as a 100% central grant while the material component will be shared in 75:25 ratio between the Centre and state governments. Funds from GIM will flow in 90:10 ratio for the Northeast and special category states, and in 75:25 ratio for the rest of India.
All lands including village common lands, community lands, revenue wastelands, shifting cultivation areas, wetlands and private agricultural lands will be eligible for afforestation under convergence.
GIM is one of the eight missions under the National Action Plan on Climate Change envisaging a holistic view of greening and focuses on multiple ecosystem services, especially biodiversity, water, biomass, preserving mangroves, wetlands and critical habitats.
The Cabinet Committee on Economic Affairs had approved GIM as a centrally sponsored scheme in February 2014 with an aim to increase and improve the quality of forest cover and contribute to enhance ecosystem services along with reduction of carbon footprint as a co-benefit.
Employment scheme MGNREGA, introduced by the previous UPA regime, promises 100 days of work in a year to every rural household.

Jan 23 2015 : The Economic Times (Delhi)

Tablets to Boost MGNREGA Soon

Yogima Sharma

New Delhi





Govt will roll out the first phase of this system on April 1 in 35,000 gram panchayats

The Narendra Modi government is all set to give a digital boost to the flagship rural jobs programme by providing tablets to 2.65 lakh gram panchayats in the country to monitor its implementation.The mobile monitoring of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will cost the Centre about ` . 265 crore, with the rural development ministry distributing tablets costing `. 10,000 each to the gram panchayats, officials said.
The government will roll out the first phase of the mobile monitoring system on April 1 in 35,000 gram panchayats, a senior government official told ET.
The initiative comes after the government has already decided to switch over to direct benefit transfer under the scheme, which is expected to be expanded to the entire country in the next one year.
The previous UPA government had, in March last year, notified usage of tablets to monitor the scheme in 10,000 gram panchayats. However, the plan did not take off because of the unavailability of AakashIV tablets, promoted by the department of electronics and IT, to be used to digitally update the scheme.
The ministry has amended the earlier provision and extended the proposal to cover all gram panchayats in the country under the scheme, starting with 25,000 gram panchayats along with 10,000 identified by the pre vious government in the first phase.
The government hopes mobile monitoring will en able access to real-time dan ta at the village level, there by improving implementation of MGNREGA, which has drawn a lot of criticism for its failure to create new and durable assets.
“The government has decided to extend the mobile monitoring to all gram panchayats and technical or supervisory per sonnel involved in implementing MGNREGA to empower them with live data from worksites besides location of assets with geo-tagging for easy verification. This will lead to complete transparency in the system,“ said the official, requesting anonymity.
The states have been asked to identify the gram panchayats under the first phase by January 31 and immediately start procurement of devices as well as training of personnel, the official added.
According to the ministry officials, the mobile monitoring of MGNREGA will serve the twin purpose of making the scheme more effective and giving a panIndia platform to the government for rolling out its Digital India drive.
The annual allocation for MGNREGA is . 34,000 crore and so far nearly ` ` . 2 lakh crore have been spent under the scheme.The scheme guarantees 100 days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. On average, 25% of rural households seek employment under the scheme annually.

Dec 18 2014 : The Economic Times (Delhi)

MGNREGA Social Audit Irks Rural Min

Yogima Sharma

New Delhi





Underreported figure of misappropriated funds at just Rs 17.67 crore prompts officials to streamline the audit process

The rural development ministry is miffed at the process of social audit of the Centre’s flagship employment scheme that shows misappropriation of just .`17.67 crore since 2012 despite allegations of widespread malaise.
The paltry figure has left officials wondering whether the government should recast the entire process of social audit of the Mahatma Gandhi National Rural Employment Guarantee scheme launched by the Congress-led UPA government in 2006.
The figure has resulted from gross underreporting, a senior government official said.
The official explained, “This is largely because just 17 states — as of November 30, 2014 — are following the rules set by the ministry for social audits and a few of them have seriously done the audit only very recently.” According to the official, who did not wish to be identified, there is a need to make the entire process of social audit more stringent and streamlined so that not a single penny is diverted and the true beneficiaries get their dues.
“We may have to take a fresh look at the process of social audits as there are a lot of loopholes in the system that need to be rectified before we get the true value of the funds that get diverted under the scheme,” the official added.
As per the audit, until November this year, a total of .
`17.67 crore was misappropriated in eight of the total 19 states, with the erstwhile Andhra Pradesh reporting misappropriation of about .
`9.8 crore followed by Karnataka (. `5.5 crore), Sikkim (. `87 lakh), Bihar (. `69 lakh) and Uttar Pradesh (about .
`65 lakh). Of this, only .
`62 lakh has been recovered by the government. Recent reports, however, claimed that 200 crore was siphoned off in just seven districts of Uttar Pradesh, leading to a Central Bureau of Investigation query in the matter. This is just one such example, said rural development ministry officials, who believe that the cumulative embezzled amount under the scheme could run into several thousand crores of rupees.
The social audit of the scheme, entitles millions of workers enrolled under it to .
`100 a day for a minimum of 100 days of work in a year, was taken up three years ago to check allegations of misappropriation of funds.
Since then, over eight lakh social audits of the scheme have been carried out at the grass-roots level, costing the government over .
`1,500 crore.
The government spends .
`34,000 crore a year on the scheme and has spent nearly .
`2 lakh crore in all over the past eight years.

Nov 12 2014 : The Economic Times (Delhi)

THE JEAN DREZE INTERVIEW - `NREGA Is In Need of Reform'





The economist shoots straight: While there's no need to `capitulate' to corporate interests, the National Rural Employment Guarantee Act could do with simplification, besides a perk-up in transparency. The government needs to put the recipients back in the picture, he tells Atmadip Ray

For one who had worked so closely to frame the world's largest job guarantee programme, known as the Mahatma Gandhi National Rural Employment Guarantee Act, it's not easy to see it succumb to pressure.It's no wonder that economist-cum-activist Jean Dreze will raise his voice against this, along with eminent academics such as Pranab Bardhan and Maitreesh Ghatak.Dreze says corruption related to NREGA and leakages -its major blemishes -are on the wane. In an interview, Dreze also lays out his vision of how strong banking and financial infrastructure can make NREGA stronger.The government seems to be planning to squeeze the scope of NREGA and money allotted to it. What, according to you, is prompting the government to do so?
The new government appears to be caught between conflicting demands from the public and its corporate sponsors. People, especially the poor, want more social support and better public services. The corporate sector, however, tends to oppose social spending, because it means more taxes, or higher interest rates, or less public money for infrastructure and so on. Employers are particularly averse to NREGA, for obvious reasons. A government that prides itself on being pro-business was bound to take a fresh look at this programme. However, my sense is that the government is yet to make up its mind on the issue.
A major chunk of NREGA money is said to be siphoned off by middlemen.
What is your experience?
If leakages alone were a good enough reason to wind up government programmes, a lot of things would beg to be shut down: the university system, the defence establishment, the Ganga Action Plan, and so on. Leakages actually raise two questions: is the programme worth it despite the leakages, and can the leakages be reduced? In the case of NREGA, I would answer `yes' to both. Official employment genera tion figures are increasingly consistent with independent house hold survey data, suggesting leakages are going down. This is also plausible in the light of various steps that have been taken to plug leakages, from bank payments of NREGA wages to social audits and proactive display of all essential records on the web. More needs to be done, but there is no reason to capitulate.
NREGA seems to be the driving force behind financial inclusion. Payments through banks and post offices were meant to safeguard against corruption. But what's the scene on the ground?
What are your suggestions to reduce the level of corruption related to NREGA?
The most vulner able link at the moment is the post office. It is not a reliable payment agency as things stand. Village post offices are vulnerable to being captured by corrupt middlemen, especially in the poorer states. The postal system also seems to be unable to pay wages on time. Yet many states continue to rely heavily on post offices for NREGA wage payments, because of the limited capacity of the banking system in rural areas. One option is to modernise the post office, another is to expand the capacity of the banking system. Both raise difficult operational issues and the solution may differ between states. For instance, some states have been able to use business correspond ents to expand the reach of rural banks, but in other states, this arrangement has not worked, at least so far. There are real possibilities of major advances in this field in the next few years.
Even if we admit that corruption played a part in NREGA payment, top economists including you have argued that NREGA should stay in its current form. What is the trade-off here?
We did not argue that NREGA should “stay in its current form“. We argued that workers' entitlements, including the right to work on demand, should not be curtailed.Speaking for myself, I am very much in favour of reforming NREGA. To start with, I believe the programme should be simplified. For instance, there are needless complications in the planning process and the work measurement system. Aside from stifling the programme, these complications affect the transparency of NREGA. So there is no trade-off between reforming NREGA and fighting corruption.Alas, the new government seems absolutely clueless as far as constructive NREGA reforms are concerned.
What is your view on the Jan Dhan Yojana?
Is it possible for banks to open at least one savings account for every household given the existing infrastructure bottlenecks like power and rural road connectivity?
Opening accounts is not difficult -it was done on a large scale under NREGA much before Jan Dhan Yojana was launched. The difficulty is to provide adequate services to t the account holders, including, for instance, prompt and convenient payment of wages or pensions. How Jan Dhan Yojana is sup posed to help in that respect is not clear s as things stand. Some people think cash transfers are seamless, but flow-of-funds problems affect most social programmes in cluding NREGA, social security pensions and even midday meals.
The government runs about 22 pro-poor schemes but you and Prof Amartya Sen have argued that India has fallen behind its neighbours in South Asia in every social indicator -from literacy to child malnutrition to access to toilets. What is going wrong? Is there a need to consolidate the schemes for a better result
It is not quite true that India has fallen behind “in every social indicator“. But this certainly applies to many social indicators, including some very important ones such as infant mortality and sanitation. The contrast with Bangladesh is particularly telling, and we also know something about why, say, infant mortality is lower in Bangladesh than in India. To illustrate, the proportion of children who are fully immunised, get vitamin A supplements, are treated with oral rehydration therapy when they get diarrhoea and were breastfed within an hour of birth was above 80% in each case in Bangladesh in 2007. The corresponding figures for Indian children were uniformly below 50% in the same year.
The contrast in sanitation coverage is even sharper. To catch up with this deficit, a consolidation of pro-poor schemes may help, but more importantly, core interventions need to be improved and expanded -public health is a prime example. The new government seems to hold the odd view that India can send rockets to Mars and run bullet trains, but is bound to remain a Third World country as far as public services are concerned.
atmadip.ray@timesgroup.com

Oct 22 2014 : The Economic Times (Delhi)

Revamped MGNREGA May Take More Ministries Aboard

Yogima Sharma

New Delhi





Govt to rope in depts such as land resources, social forestry to create bigger assets under the scheme

The government plans to rope in various departments and ministries such as agriculture, land resources, horticulture and social forestry to create bigger and more durable assets under the rural job guarantee scheme, going ahead with its plans to revamp the national programme.“Considering the capacity constraint at the gram panchayat level, which is the main implementing agency for allocating works under the scheme, we are considering to substantially increase convergence with other ministries or line departments for creation of bigger and sustainable assets under the scheme,“ a senior government official told ET.
According to the official, besides their technical expertise, these ministries will pump in some portion of their funds to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) programme, contrary to fears that tweaking of the scheme will lead to lesser funds for wages.
Implementing agencies, other than gram panchayats (GPs), today constitute a mere 10% of the works taken under the scheme.The proposal is to increase this to 20%. “The proposal is under consideration by finance ministry and we hope to finalise it in two weeks,“ the official said. Nitin Gadkari-led rural development ministry had last month announced that the government would increase the material component under the MGNREGA scheme to 49% from 40% to enable states take up bigger works at the district level. “The decision has been taken in response to widespread criticism that Mahatma Gandhi National Rural Employment Guarantee Act, MGNREGA, has become a source of corruption and that no productive assets are being created through the rural job scheme,“ Gadkari had said.
The move attracted widespread criticism, and last week a group of around 30 economists had written to Prime Minister Narendra Modi, requesting him not to dilute or restrict provisions of MGNREGA. The government is of the opinion that the efficiency and productivity of the rural jobs guarantee scheme will improve after its revamp. Explaining the rationale behind tweaking the wage-to-material ratio for selected works under the scheme despite criticism from economists, the official quoted earlier said the entire focus of the government is to give equal weightage to wage employment and creation of durable asset.
“In the context of further improving the quality of durable assets or enabling creation of sustainable assets, this ratio of 51:49 may be a step forward,“ the person said.
Convergence with other ministries will ensure technical expertise and knowledge of implementing bigger projects that are relatively more material intensive. Also, these central agencies will be able to handle the spillover between different panchayats, the official said.
Works that would fall under the revamped MGNREGA scheme largely include construction of check dams, de-silting of traditional water bodies, construction of minor irrigation tanks and canals.
MGNREGA, which has annual allocation of ` . 34,000 crore in the current year, guarantees 100 days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. On an average, 25% of the rural households seek employment under the Act annually.

Changes to MGNREGS may cut into wages

Parties feel it will dilute scheme’s universal employment guarantee

Union Minister of Rural Development Nitin Gadkari has proposed that the MGNREGS be restricted to only tribal and poor areas and the permissible labour to material ratio of expenses be changed from the current 60:40 to 51:49.

While the first proposal is being opposed by political parties, who think it will dilute the scheme’s universal employment guarantee, there has been less discussion on the second proposal even though its rationale is not matched by evidence.

Ministry data shows that in 2013-14, States spent 26.6 per cent of MGNREGS funds on material. In 2012-13, this was 27.7 per cent, much lower than the current permissible limit of 40%. In changes proposed to the MGNREGS, Mr. Gadkari has proposed that the permissible labour to material ratio of expenses be changed from the current 60:40 to 51:49. Even as the current upper limit in expenditure is not being met, the government wants to increase this from 40 to 49 per cent. The change will increase the presence of contractors in the job scheme and squeeze the funds available for wages.

“There was no prior consultation on the labour-material ratio changes and the Minister’s announcement came as a surprise to us. There is no real reason [for the change] when the States are not even spending 40 per cent [on material] right now,” said an official at the Ministry requesting anonymity.

Madhya Pradesh Chief Minister Shivraj Singh Chouhan wrote to Mr. Gadkari in July that the labour-material ratio in the scheme be changed from 60:40 to 50:50. But data shows that in Madhya Pradesh, only 25 per cent of Rs 2,030 crore MGNREGS funds in this financial year have been spent on material so far.

With UPA-II government tightening spending in its last years, MGNREGS allocation was reduced from Rs. 40,100 crore in 2010-11 to Rs 33,000 crore in 2013-14.

“Increasing material ratio will add Rs. 8,000 crore in expenses. This means under the current allocation, we will have that much less to spend on wages,” said a senior official.

‘Only in tribal parts’

Mr. Gadkari has also proposed to restrict MGNREGS to the poorer parts of the country. While the Minister made the proposal – which will require amending the Act – last week, the Ministry, since July, has been focusing on implementing the scheme in 2,500 backward blocks under its Intensive Participatory Planning Exercise. These blocks have been identified based on percentage of population below poverty line (BPL), as per the Planning commission estimates of 2013, and a backwardness index prepared by the Planning Commission using the 2011 Census data that uses five parameters – percentage of households primarily dependent on agriculture, female literacy rate, households without access to electricity, households without access to drinking water and sanitation within the premises and households without access to banking facilities.

Going by these parameters, in Tamil Nadu, one of the best performing States in the MGNREGS currently, only 98 of 385 blocks can be identified as backward, while in Chhattisgarh, 105 of total the 145 block fall into this category.

“This will end the universal spirit of the MGNREGS,” said Shankar Singh, an activist with Mazdoor Kisan Shakti Sangathan, Rajasthan.

Keywords: MGNREGS, universal employment guarantee, Nitin Gadkari, MGNREGS funds

MNREGS beneficiaries paid Rs. 37 cr a year bribe for jobs: study

It estimates that 24 per cent of the MNREGS allocations by the Centre were misappropriated in 2009-10, down from 41.5 per cent in 2006-07.

A study to calculate the size of the black economy commissioned by the UPA Government has reported that a very large number of professionals earning taxable income from profession are not filing their returns of income. It found that barely 6.7 per cent of the registered chartered accountants – the professionals whose services tax payers hire to file their returns – admitted to having taxable professional incomes in 2009-10. This raises obvious questions for the Income Tax Department, the report says.

The report finds that just 1.8 per cent of the registered legal professionals filed tax returns in 2009-10. However, 42.8 per cent of the registered medical professionals and 35.2 percent of nursing homes did so in the same year.

There is enough statistical evidence to suggest that there is considerable under-reporting of professional receipts and inflation of expenses, even by those professionals who are filing their income returns, the study notes.The study has also concluded that the increase in the number of taxpayers filing returns has been very low, and that too during a period when all economic indicators were pointing to a huge growth in the size of the famed Indian middle class. In the five years between 2005-06 and 2009-10 there were 5.4 crore new pan card holders but only 43 lakh new taxpayers filed returns.The authors of the report also studied some flagship social programmes to assess the generation of black money through leakages in expenditures on them. The report estimates that 24 per cent of the MNREGS allocations by the Centre were misappropriated in 2009-10, down from 41.5 per cent in 2006-07.In the same year, the report estimates that bribes worth about Rs. 37 crore paid by NREGS beneficiaries across the country to get jobs. The average bribe paid was Rs. 65.

he Hindu had earlier reported that among the findings of a confidential report commissioned by the government is that driven substantially by the higher education sector, real estate deals and mining income, India’s black economy could now be nearly three-quarters the size of its reported Gross Domestic Product (GDP). The report was accessed exclusively by The Hindu.

Since there were no “reliable” estimates of black money generated in India and held within and outside the country, the UPA Government had commissioned the National Institute of Public Finance and Policy (NIPFP), linked to the Finance Ministry in March 2011, to estimate the black money in India and held overseas by Indians.

The Special Investigation Team (SIT) on black money constituted by the Modi Government had on May 27 in compliance with a Supreme Court direction is studying the report. Though the report was submitted to the Finance Ministry in December 2013, neither the UPA Finance Minister P Chidambaram placed it in Parliament nor has his successor Arun Jaitley.

Sep 11 2014 : The Times of India (Delhi)

Govt to change wage norms in MGNREGS

Subodh Ghildiyal

New Delhi





The Centre may retain the 20-point preference for employment over material cost for a bulk of work under the job guarantee scheme despite saying that the lopsided weightage for wages was behind MGNREGS’s (Mahatma Gandhi National Rural Employment Guarantee Scheme) failure to create durable assets.The rural development ministry has announced that the mandatory 60:40 wage to material ratio would be changed to 51:49 to allow higher spending on construction material like cement etc for creation of durable assets. The BJP government has been critical that MGNREGS had become a ditch-digging scheme with the high outflow of funds showing little for output.
The scheme has been allocated Rs 33,000 crore for 2013-14. But according to sources in the ministry, the alteration could hurt the objective of the job scheme — employment. A higher expenditure on material would come at the cost of jobs offered for a work undertaken. Given the sensitivity of the issue, the 60:40 ratio could be retained at the gram panchayat level. The works done in the villages are wage-oriented and low on expertise.
In contrast, sources said, the altered ratio that puts wages and material almost at par could be used at the district level. Here, agencies other than gram panchayats take up works which are based on expertise like construction and conservation.
Departments like agriculture, irrigation, PWD, sericulture and land resources are involved in roads and water conservation among other works.
“We feel such an approach would keep the sanctity of the objective behind MGNREGS while also leading to quality assets at the level where they matter,” an official said. This approach, still under discussion, means the bid to pare down the employment budget in favour of raw material used under MGNREGS could be limited in terms of funds and works. According to the Act, 50% of the works under the scheme have to be taken up at the gram panchayat level.
The proposed change in the wage-material ratio has left another ticklish issue to be resolved. Given that the demand for jobs must be fulfilled, any increase in spending on material would shrink the money available for wages at the current level of jobs sought, resulting in the need for higher budgetary allocation. Sources said the financial implications may require a nod from the finance ministry.

Jul 14 2014 : The Economic Times (Delhi)

NREGA: No. of Days to be Increased to 150

YOGIMA SETH SHARMA

NEW DELHI





The government is planning to raise the minimum wage days under its rural employment guarantee scheme to 150 from 100 in case the country faces a drought.The rural development ministry, which is working on the proposal, is of the view that 50 additional days of employment will compensate farmers who have suffered crop loss due to deficient rains.
“The scheme will come handy in addressing the financial needs of farmers,“ a senior government official told ET. “However, the extent of coverage will depend on how subnormal the monsoon is and what is the spread of drought.“
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) guarantees 100 days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. On an average, 25% of the rural households seek employment under the Act annually.
The government's promptness in laying a road map to address the exigency can be gauged from the fact that from June 1 to July 10, the country has received 43% less rainfall at 142.6 mm against the normal level of 251.6 mm. Water levels in reservoirs have fallen below a 10-year average for the first time this year.
Rainfall so far this season has been lower than even 2009 when the country witnessed its worst drought in 37 years. Last month, private weather forecaster Skymet had warned that there was a 60% probability of a drought this year.
The worst-affected regions include central India, where the deficit is 63% followed by north-west (50% below normal) and southern peninsula (36%).
The rural development ministry had earlier issued advisories in May and June, asking states to create durable assets related to irrigation and their maintenance under the employment guarantee scheme. It has even set up a monitoring cell that will track preparedness of states in creating these assets on a fortnightly basis. Union agriculture minister Radha Mohan Singh had last month said that the worst impact of a subnormal monsoon is likely to be in western India, with possible drought-like conditions in some areas. The government has already prepared a drought contingency plan for 500 districts.
The average wage under MGNREGA stands at ` . 174.3 per person per day after an over 11% revision in April. Haryana has the highest wage under the scheme at ` . 236 per person per day while Bihar has the . 153.
lowest at ` The government had last year extended the number of wage days under MGNREGA to 150 in Uttarakhand in the wake of floods that left thousands dead and missing.

Jun 27 2014 : The Economic Times (Delhi)

CRACKDOWN OVER MGNREGA - States to Pay Compensation for Wage Delay by July 31

YOGIMA SETH SHARMA

NEW DELHI





25% of payments amounting to `. 2,700 cr are delayed beyond the stipulated 15 days

Centre has come down heavily on states asking them to pay the entire compensation to workers arising out of delay in wages by July 31 under the employment guarantee scheme, in the absence of which states will not be allowed to apply for further funds under the scheme from the Centre.At present, 25% of the payments amounting to Rs 2,700 crore are delayed beyond the stipulated 15 days. A fraction of payments, about Rs 125 crore, have been delayed for over 90 days.
Ministry of Rural Development had introduced the penal system of monetary compensation for delay in wages under the Mahatma Gandhi National Rural Employment Guarantee Act in January this year and till date the cumulative compensation stands at Rs 90.6 crore.
` Of this, compensation for delay in wages in 2013-14 is Rs 79.7 crore while it Rs 10.9 crore in the first quarter of the is ` current financial year.
Under the compensation clause, government penalises states at the rate of 0.05% of the wages delayed per day .
States, in turn, can recover this from the functionaries or agencies involved in payment of wages.
“This kind of tough stand was needed as barring two states, no state has taken our instructions seriously as a result of which the problem of delay in wages continued despite the compensation clause being put in place,“ a senior government official told ET.
In a letter written to special chief secretaries of all states recently, the ministry of rural development has said that barring Maharashtra and Chattisgarh, in no other state the programme officers have been examining the delayed cases, which reflects poorly on the monitoring of the scheme.
Conveying the Centre's message of 'zero tolerance' for delays, the ministry has also directed states to tighten the system of wage payments without any further loss of time.
The states with highest compensation in the current fiscal include Madhya Pradesh (. `2.3 crore), Tamil Nadu (.
` 2.03 crore), Chattisgarh (. `1.1 crore), Maharashtra (. ` 0.98 crore)and Andhra Pradesh (. `0.97 crore).
MGNREGA promises 100 days of work each year to every rural household. The Act stipulates that wage payments have to be made within 15 days to the beneficiary.
However, complaints of delayed wage payments have been rampant since the scheme was implemented in February 2006.
Centre has allocated ` . 34,000 crore for 2014-15 to MGNREGA, the flagship employment guarantee scheme.

Jun 26 2014 : The Times of India (Delhi)

60% of NREGA work must be agricultural

Subodh Ghildiyal

New Delhi:





The Centre is likely to make it mandatory that 60% of work in a district under the job guarantee scheme, MGNREGA, should be linked to agriculture.The rural development ministry will incorporate the mandatory clause in Schedule-1 of the MGNREGA so that every state has to follow the norms designed to give a fillip to agriculture through labour-intensive work under the job scheme.
Rural development secretary LC Goyal said, “The proposal has been sent to the states for comments. It would be decided soon.” The move would inextricably bind MGNREGA with farm activities, thereby focusing the creation of assets in the farm sector. According to the plan, a minimum of 60% of work in a district should be “in the nature of productive assets linked to agriculture through the development of land, water and trees”.
The fine-print suggests that if it is implemented, it could push overwhelming activity under the job scheme towards agriculture. The 60% floor limit is “in terms of costs”.
Given that many works permitted under MGNRE
GA, like road construction, are capital-intensive because of the material costs, the stress on 60% minimum expenditure on farm-related activity would compel the authorities to discourage other work. According to estimates, construction of roads forms 37% of works done under MGNREGA, with Rs 8-10 lakh spent on every km of road.The refocusing of the job scheme towards farming marks a new chapter in the chequered history of the pro-poor scheme that was brought in by UPA to provide distress labour to the poor.
Over last seven years, the scheme was found to be riddled with corruption and inefficiency while also failing to creating durable assets.
The BJP was widely perceived to be in favour of disbanding the scheme. But after coming to power, it seems to have steered clear of any drastic action, possibly because of the negative message it would send to the vast section of the rural populace. Instead, redirecting the scheme towards boosting the farming activity seems to be an acceptable improvisation.
“The shift would lead to better community assets and also provide employment to the needy,” Goyal said.

Jun 19 2014 : The Economic Times (Delhi)

Ministry wants States to Spend 60% NREGA Money on Agri Infra

YOGIMA SETH SHARMA

NEW DELHI





In a major revamp of the employment guarantee scheme, the ministry of rural development has proposed to make it mandatory for states to spend at least 60% of the MGNREGA money on creating infrastructure linked to agriculture. This is expected to bring at least .`25,000 crore of investment into agriculture, a senior government official told ET.
As part of the amendments proposed in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the ministry will delegate funds at the district level so that larger works like creation of minor irrigation structures could be undertaken besides providing for a dedicated fund equivalent to 3% of the MGNREGA money to recruit technical manpower who will guide in planning and execution of works under the scheme, the official said.
“The government feels that the scheme needs to be more outcome oriented on all fronts, be it creating quality assets or payment of wag
es,” the official said.MGNREGA, a flagship scheme of the UPA government, was implemented in 2006. It promises 100 days of work in a year to every rural household. However, the scheme has drawn a lot of criticism for poor quality of assets being created and delay in wage payments, which has defeated the purpose of the scheme.
The Narendra Modi-led government had indicated that the scheme would have to undergo changes and focus more on asset creation in rural India.The annual spend on MGNREGA is .
`41,000 crore with the Centre contributing .
`34,000 crore and the rest coming from states as well as through convergence between MGNREGA and other schemes,
though this is miniscule as of now.Out of the wage material ratio of 60:40, barely 28% is utilised in the material component under the scheme against the allotted 40%. The ministry estimates that these unutilised funds of 12% at the district level will fetch approximately .
`8,000 crore that can then be utilised to create bigger assets.
As per the proposal sent to states, the ministry has already moved a note to the department of expenditure seeking approval to set aside .
`1,200 crore for hiring technical staff who would guide in the planning and execution of MGNREGA works.
To address leakages in implementation and delay in payments, the ministry has also proposed to come up with a mechanism than will ensure that social audits of the scheme are carried out as per rules and there is effective implementation of the provisions of the delay compensation system.
Under the scheme’s compensation clause, agencies responsible for the delay are expected to pay 0.05% of wages per day after closure of muster roll.

May 28 2014 : The Economic Times (Delhi)

MGNREGA may be Linked to Development

NEW DELHI OUR BUREAU





The rural job guarantee scheme, MGNREGA, is likely to undergo changes with the new rural development minister, Gopinathrao Munde, planning to link it to development of villages.“I like this scheme. This scheme is best for villages. Basically, people get employment,” said Munde, who took charge of the ministry on Tuesday.
He, however, said there are “problems”
in its implementation. “Proper management is a problem; proper disbursement of money is a problem. I think the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee) money should go to the development of villages and people should get employment.“The senior BJP leader also said that his priority would be proper implementation of the recently enacted Land Acquisition law and Narendra Modi's key electoral plank -that every household will be provided sanitation and drinking wa ter. MGNREGA is widely seen as a plank on which the UPA government returned to power in 2009.
The scheme entitles millions of rural workers enrolled under it to 100 days of wage employment in a financial year to a rural household.
Implementation of the scheme, which has an annual allocation of over .
`30,000 crore, has been hit due to delays and issues with release of funds.
There are also issues related to authenticity of beneficiaries enrolled under it