mgnregs update - foundation for ecological...

Initiative towards Energizing MGNREGA. ……………

MGNREGS UPDATE News for Internal Circulation No. 6 / November 1, 2014 – November 15, 2014 Foundation for Ecological Security

Minister: Govt. won’t restrict MGNREGA to a few

blocks:

Anumeha Yadav

“Rs. 40,000-crore component is for the whole

country”

The National Democratic Alliance (NDA) is not going

to restrict the implementation of MGNREGA to a few

pocket of the country, the new Minister for Rural

Development Chaudhary Birendra Singh, said on

Tuesday.

Mr. Singh was responding to questions over whether

the government was planning to restrict the scheme's

implementation to only tribal and poor areas — 2500

blocks of all States — as had been earlier proposed by

Nitin Gadkari, who held the Rural Development

portfolio till last week.

“Rs. 40,000-crore component is for the whole country

and not for any specific region. In this country, there

are people who have never seen a Rs. 500 note. The

poorest of the poor...we have been able to reach them

through the MGNREGA,” said Mr. Singh. “So far, the

working of MGNREGA is concerned, if there are

lacunae, we will correct them,” he added, while

speaking to reporters on Tuesday.

Mr. Gadkari said the scheme was not required in all

parts of the country. Following Mr. Gadkari's

statements, 28 economists had written to Prime

Minister Narendra Modi in October against

considering this move saying this ran “against a

fundamental premise of the Act: gainful employment

that affords basic economic security is a human right.”

Other economists including Jagdish Bhagwati and

Arvind Pangariya supported the announcement arguing

in favour of cash transfers to rural families.

Inside News

• Villagers will decide on NREGA work: • HC admits PIL challenging MGNREGA scheme’s

wage structure: • NREGS funds to check diseases: • Tripura: NREGS workers demand regularization

of service: • NHRC Direction to State on NREGA : • Centre, TN Put on Notice over Wage Fixation

under MNREGS: • HC Seeks SP’s response ON Containers

Articles

• Banks' rural push may face stumbling block as government plans to reduce NREGA kitty:

• NREGS: Need for Reinvigoration: • In the greater scheme of things: • NREGA is in need of reform: Jean Dreze,

economist-cum-activist: • Sharpest-ever fund cut for rural job scheme:

Government Order

• MGNREGS – Training programmes for North-East States on 21st Nov,14 SIRD Guwahati, Assam.

• IPPE: Points for Follow up by States.


Mr. Singh, however, did not comment on the second

substantive change proposed by Mr. Gadkari to the

employment guarantee Act — that of increasing

spending on material vis-a-vis wages.

Mr. Gadkari had proposed that the permissible labour

to material ratio of expenses be changed from the

current 60:40 to 51:49 to build more durable assets.

Officials in the MoRD had in a note to the Minister in

first week of August said that the proposal to increase

the limits for spending on material could lead to entry

of contractors and increase corruption, even as it may

reduce the availability of funds for spending on wages.

http://www.thehindu.com/news/national/minister-govt-wont-

restrict-mgnrega-to-a-few-blocks/article6588355.ece

Villagers will decide on NREGA work:

MOHAMMED ANAS New Delhi | 1st Nov 2014

Instead of pradhans (village council heads), villagers

will now decide the allocation of 100 days' work under

the Mahatma Gandhi National Rural Employment

Guarantee Act (MGNREGA). Plus, all the data

regarding labourers in villages will be digitised to keep

track of labour concentration and migration in rural

areas. These moves are part of the Intensive

Participatory Planning Exercise (IPPE) programme

introduced from 1 November by the Union Rural

Development Ministry.

Until now, a meeting of the gram sabha (village

council) under the leadership of the pradhan and

panchayat secretary used to decide about the NREGA

development work in a village. Villagers, especially

labourers, hardly had any participation. In the process,

several cases of pradhans forging labourer cards and

usurping the funds meant for the scheme, were

reported in recent years.

"Now, there will be open gram sabha meetings, which

will be attended by all villagers and block level

officers. All future NREGA work and its budget will

be decided in front of villagers," said P.N. Dixit, a

divisional development officer posted in Lalitpur

district of Uttar Pradesh.

He added that the new method of NREGA

implementation will reduce the role of the village head

in the implementation of the scheme.

According to the ministry's NREGA unit, as part of the

IPPE, all villages will be mapped according to their

social conditions, availability of resources and labour,

and weather conditions

. "Then all these maps will be digitised and uploaded

on the NREGA website. Then, based on these maps,

village meetings will be held to allocate budget and

development projects under

NREGA. All these information will be merged so that

labour commissioners may check anytime whether the

scheme is working properly. Thus, village pradhans

will not have any excuse about the delay or non-

payment of dues to the workers," said Pratibha Singh,

a deputy commissioner in the labour department of the

ministry.

She added that the process will also digitise the

labourer-population village wise. "It'll help keep

record of how many workers live in a village and how

many have migrated to the cities. Such records will be

useful in rural and labour reforms in the future," she

added

http://www.sunday-guardian.com/news/villagers-will-decide-on-

nrega-work


HC admits PIL challenging MGNREGA scheme’s

wage structure:

Updated: November 14, 2014 13:52 IST The Madras

High Court Bench here on Thursday admitted a public

litigation petition challenging the Constitutional

validity of Section 6 of Mahatma Gandhi National

Rural Employment Guarantee Act (MGNREGA),

2005, which empowers the Centre to fix wages for

employees without being bound by any provision of

the Minimum Wages Act, 1948.

The First Bench comprising Chief Justice Sanjay

Kishan Kaul and Justice V. Dhanapalan admitted the

PIL petition after senior counsel M. Ajmal Khan,

representing the petitioner R. Gandhi, submitted that

the Supreme Court had upheld only the validity of

notifications issued under the enactment and not the

legal provision itself since it had not been challenged

in any case so far.

According to the litigant, Section 6 of MGNREGA

was directly opposed to Articles 14 (State shall not

deny any person equal protection of laws), 16 (equality

of opportunity in matters of public employment) and

23 (prohibition of traffic in human beings and forced

labour) of the Constitution since it empowers the State

to fix wages less than those prescribed under the

Minimum Wages Act.

He pointed out that the Parliament enacted

MGNREGA to provide at least 100 days of guaranteed

employment in a year to one member of every

household in rural areas.

Those employed under the Act were provided with

unskilled manual work such as desilting water bodies,

strengthening the bunds around them and raising

roadside plantations.

Though the legislation was enacted with a laudable

object, “it was not right to have included Section 6

which provides unfettered powers to the Centre fix a

wage that could even be lesser than what was

prescribed under the Minimum Wages Act,” the

petitioner said.

http://www.thehindu.com/news/cities/Madurai/hc-admits-pil-

challenging-mgnrega-schemes-wage-structure/article6598747.ece

NREGS funds to check diseases:

DC CORRESPONDENT | November 03, 2014, 06.11

am IST

Thousands of panchayats have turned into garbage

heaps

Khammam: Efforts are being made to use the funds

being released under Mahatma Gandhi National Rural

Employment Guarantee Scheme for a cleaner

environment to check spread of diseases in rural areas.

Dengue and malaria, gastroenteritis and other diseases

have been spreading in rural areas due to unclean

surroundings. Panchayats are unable to allocate funds

since they are facing a severe financial crunch due to

meagre tax collections.The state government is not

giving any special funds for sanitation in the gram

panchayats. Because of this, thousands of panchayats

have turned into garbage heaps, leading spread of

disease.The Prime Minister has asked secretaries of all

the departments to allocate funds in the budget

innovatively.This has led to officials contemplating to


use MNREGS funds to clean villages.The MNREGS

officials in the district have been asked to send a report

on the issue. As per the details, the government would

involve labourers under MNREGS to work for

sanitation in the villages.MNREGS official J.K. Reddy

said that the labourers would be involved 180 days a

year under the scheme.

http://www.deccanchronicle.com/141103/nation-current-

affairs/article/nregs-funds-check-diseases

Tripura: NREGS workers demand regularization

of service:

TNT News

AGARTALA: The Tripura NREGA Karmachari

Samanway Samiti Monday launched sit-in-

demonstration at Swami Vivekananda Stadium in

Agartala for 120 hours, i.e., till next November 8 in

demand of regularization of the REGA workers.

Besides, the organization also protested the NDA

government’s decision of slashing the fund under

MGNREGA rural employment scheme.

“No step has been taken on the part of the

administration regarding our demands. We waited for

seven days for their reply. As of now, we did not get

any reply from their side and that’s why, we have

called for cease-work till November 8morning from

today,” secretary of REGA Karmachari Samanway

Samiti – Joydeep Kar.

Earlier, the organization held meet protesting against

the decision of the Union government of terminating

the REGA employees on October 25. Later, a

delegation team submitted a memorandum of five-

point charter of demands to Minister for Rural

Development – Manik Dey in this regard.

http://www.tntmagazine.in/tripura-nregs-workers-demand-

regularization-of-service/

NHRC Direction to State on NREGA :

By Express News Service, Published: 11th November

2014 06:03 AM

The single member bench of SC Sinha hearing a case

on the first day of the two-day camp court of National

Human Rights Commission in Bhubaneswar on

Monday | express photo

BHUBANESWAR: The National Human Rights

Commission (NHRC) on Monday directed the State

Government to take immediate steps for payment of

wages to people who have availed work under

Mahatma Gandhi National Rural Employment

Guarantee Act (MGNREGA).

Protestations of State Government citing non-release

of funds from Centre notwithstanding, the single

member bench of SC Sinha said it was the

Government’s responsibility to make the payments.

The poor people who take up labour under the scheme

do not know who is going to pay their wages. Their


due wages should be paid on time, Sinha observed at

the start of the two-day camp sitting of the

Commission here on Monday.

The Commission took up the petition, filed by rights

activist Akhand, regarding non-payment of the wages

as the first case of the sitting. Appearing before the

bench, Panchayati Raj Secretary DK Singh submitted

that payments were affected as Centre has not released

funds for over two months.

Wage overdue on the Government under MGNREGA

has accumulated to over `200 crore. Funds available

with the State Government exhausted 15 days back,

bringing wage payments to complete standstill.

Compensation in lieu of delayed payments has also not

been released since 2013-14. Further, the works under

the programme cannot be stopped as the law mandates

provisioning of job to anyone who applies for it, Singh

stated.

The Commission had earlier sought an action taken

report from State Chief Secretary in the matter.

Akhand had appealed for directions to Government to

strictly adhere to the rules in terms of timely payment

and compensation.

In another case, the bench also took up the problem of

bonded labour and the plight and suffering of such

people and directed the Government to initiate

comprehensive steps for their rehabilitation. Sinha

asked Collectors of Bargarh and Balangir, which are

beset with the problem, to ensure that the labourers

rescued from other States are covered under different

welfare and social security schemes of both the Centre

and State Government.

The Commission is set to take up over 55 cases

pertaining to the State in its two-day sitting. Open

house discussion with common people and NGOs will

be held on November 12. Sinha is also scheduled to

conduct meeting with Chief Secretary GC Pati and

senior Government officials on the day.

http://www.newindianexpress.com/states/odisha/NHRC-Direction-

to-State-on-NREGA/2014/11/11/article2518191.ece

Centre, TN Put on Notice over Wage Fixation

under MNREGS:

By Express News Service, Published: 14th November

2014 06:07 AM , Last Updated: 14th November 2014

02:09 PM

MADURAI: The Madras High Court (Madurai Bench)

has sought a reply from the Union and State

governments on a petition challenging the Government

Order (G.O) fixing wages under the Mahatma Gandhi

National Rural Employment Guarantee

Scheme(MNREGS) .

In his PIL, A Mahaboob Batcha, a National Citizen

awardee from Madurai, stated that the NREG Act was

enacted with the objective of providing guaranteed

rural wage employment in unskilled manual work for a

period of 100 days in a year. Each person who renders

work under the scheme is entitled to receive wages for

each day work. Section 6 of the NRGE Act empowers

the Central Government to notify the wage rate

notwithstanding anything contained in the Minimum

Wage Act, 1948 and thus, by the said provision, the

Central Government is empowered even to notify a

wage rate that is below the minimum wages notified

under Section 3 of the Minimum Wages Act.

The petitioner contended that on the strength of the

provision, the Central and State governments are

entitled to extract work from the people for lesser than

the minimum wage, which amounts to forced labour

and is unconstitutional.


He also argued that the employment provided under

the NREG Act and the schemes made under the State,

and Section 6 of the Act which empowers the payment

of wages less than the minimum wages, are violative

of the guarantee of equal opportunity in matters

relating to jobs under Article 16 of the Constitution of

India. Hearing the plea, the Principal Bench

comprising Chief Justice S K Kaul and Justice V

Dhanapalan ordered notice to the Union and State

secretaries of Rural Development Department.

HC Seeks SP’s response ON Containers

Madurai: The Madras HC bench here told the Madurai

Superintendent of Police to file a counter affidavit on a

petition filed by MSC Agency (India) Private

Company seeking to return the containers used by PRP

Granite Company for importing granites. MSC filed a

contempt petition saying it leases the containers out

under a contract and delivers the containers along with

the cargo at the port of discharge. While so, the

company gave 8 containers on lease to PRP for export

of granites, and the containers were taken from

Thoothukudi to the PRP in Madurai for stuffing with

granites. The Collector and the SP sealed the

containers for alleged illegal quarrying by PRP

Company.

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http://www.newindianexpress.com/states/tamil_nadu/Centre-TN-

Put-on-Notice-over-Wage-Fixation-under-

MNREGS/2014/11/14/article2522274.ece

Banks' rural push may face stumbling block as

government plans to reduce NREGA kitty:

Atmadip Ray, ET Bureau Nov 7, 2014, 03.11PM

IST

(As per RBI’s report, accounts…)

KOLKATA: State-run banks, which have been relying

on the government's rural employment programme for

no-frills accounts to be viable, may soon see them

turning dormant as the government plans to reduce the

number of districts that will be eligible for the scheme.

The associate infrastructure, created for making

government payments, may also become redundant

once the Narendra Modi government cuts the flow of

funds through the Mahatma Gandhi National Rural

Employment Guarantee Act (MGNREGA), the world's

largest job guarantee programme.

About 50 million households get employment through

this every year, costing just about 0.3% of India's

GDP. A majority of these workers are women, and

close to half of them belongs to Dalit or Adivasi

communities.

Banks opened 243 million basic savings bank accounts

for the poor up to March 2014 since 2009-10, but a

large chunk of these accounts now run the risk of


becoming dormant if the payment for MGNREGA

dries up. As much as Rs 31,200 crore had flown into

these accounts till March 2014 through various

channels.

"The MGNREGA money helped banks in improving

the CASA. Now the flow of funds would reduce

proportionately," said M Narendra, former chairman of

Indian Overseas Bank. CASA is the ratio of low cost

current and savings accounts to total bank deposits.

High CASA for banks means higher profitability.

The government has released 45% less resources under

MGNREGA during the first half of the fiscal and is

contemplating restricting the scope of the scheme to

only 200 districts. It released Rs 13,618 crore to states

during April and September compared with Rs 24,676

crore released the year-ago period.

"Banks have already created the infrastructure across

the country for making government payments. Now,

the investment will not bear any return if the

government reduces the number of eligible districts for

the scheme. But we have not received any official

information from the government on this," United

Bank of India executive director Sanjay Arya said.

A group of leading economists such as Pranab

Bardhan, Jean Dreze and Jayati Ghosh wrote to PM

Modi requesting him to continue with the scheme. "No

doubt, the programme could and should do even better.

The gains that have been achieved are substantial and

amply justify further efforts to make it a success," the

letter dated October 13 read.

According to the Reserve Bank of India's latest annual

report, the accounts opened and the banking

infrastructure created has not translated into substantial

operations in terms of banking transactions. Top

bankers said that MGNREGA payments do not help in

creating float money for them as most beneficiaries

withdraw their money within hours of getting it in the

accounts.

"This is one of the DBT (direct benefit transfer)

options. Looking at the average balances in these

accounts, the jury is still out on whether DBT provides

attractive floats, which adds to liquidity of the bank,"

said Robin Roy, PwC India's associate director for

financial services. "It's the average balances in such

savings accounts that is the key determinant." Banks

were trying to make these accounts profitable by

introducing more credit products.

http://articles.economictimes.indiatimes.com/2014-11-

07/news/55871763_1_indian-overseas-bank-pwc-india-m-narendra

NREGS: Need for Reinvigoration:

Sunday 2 November 2014, Mainstream, VOL LII, No

45, November 1, 2014

by Saumitra Mohan

With the change of guard at the Centre, lots of

initiatives are being conceived. Newer schemes and

programmes are being contemplated to bring about a

positive turnaround in the socio-economic life of

common India. Many extant programmes are also

being given a makeover. The new enthusiasm and

fresh thinking are definitely laudable and so far have

been contagious given the positive vibes generated

among the hoi polloi. All these initiatives, however,

are yet to be tested for their efficacy in terms of

practical implementation. In the interim, one particular

national programme is definitely gasping for breath

and that is the National Rural Employment Guarrantee

Scheme (NREGS).

The NREGS was launched in the year 2005 pursuant

to the passage of the National Rural Employment


Guarrantee Act (NREGA) in Parliament the same year

during the first UPA (United Progressive Alliance)

Government. The scheme was also launched to honour

the constitutional commitment as enshrined in Article

41 (Part IV relating to Directive Principles) of the

Indian Constitution.

The scheme took its time to gain momentum as it

made a break from the erstwhile venal ‘paymaster

system’ to bring about more trans-parency and

efficiency in the delivery mecha-nism. The scheme, of

all things, promised an assured 100 days’ work to a

registered rural household within 15 days of the

application though most implementing agencies found

their ways with the mandatory unemployment

allowance in case there was a delay in providing the

demanded work within the statutory 15 days.

Nevertheless, the scheme did ensure creation of

immense asset creation in the countryside in terms of

soil conservation, recla-mation of cultivable land,

massive social forestry works, enhanced irrigation

capacities, flood protection works and hundreds of

thousands of water bodies while also simultaneously

ensuring redistribution of resources by way generation

of millions and millions of working person-days. The

latter definitely had a multiplier effect for the entire

economy as the purchasing power generated in the

countryside fuelled demands which had a cascading

effect for the entire economy. Notwithstanding the

sundry criticisms from all across including the alleged

ingenuous leakages, the executing agencies used

flexibilities of the NREGA to provide demand-driven

works to the rural populace as well as to fill up the

infrastructural gaps as and when demanded.

While almost all the States struggled with their labour

budgets, some States including Rajasthan, Andhra

Pradesh and West Bengal did strikingly well. In fact,

West Bengal continues to be one of the national

leaders in the NREGS. However, this flagship scheme

has definitely been in dire straits lately what with the

clogged national funding channels and the protean

reporting systems. The NREGS funding from the

Centre has been far from smooth for some years now.

To some observers, it often appeared that the NREGA

administrators have wilfully been dilly- dallying to

delay fund allocations to the States. Surprisingly,

notwithstanding the straitened financial position most

States have been more than prompt to part with their

share of the funds.

To begin with, the wages were paid in cash which was

rightly converted to wage payment directly to the

beneficiaries through bank/post office accounts to

check leakages. Though the opening of bank account

was an uphill task given the penetration and manpower

of these financial institutions, still almost all the

executing agencies managed the same. The fund

allocation was again made conditional upon

submission of 60 per cent utilisation of the funds

already allotted which was later hiked to 80 per cent.

While the executing agencies were somehow

managing these requirements, there came the system

whereby the executing agencies were asked to reflect

the work and financial status online through MIS

(management of information system). This was

another Sisyphean task given the poor availability of

trained manpower and poor internet connectivity in the

countryside. And all these were besides the

requirements of 100 per cent social audit, GIS

mapping and compulsory uploading of photographs of

various stages of the schemes executed as well as

regular financial and quality audit by the national and

State monitors (read Ombudsmen). Indubitably, these

were all good initiatives, aimed at bringing greater

transparency and efficiency.


However, with the Electronic Fund Manage-ment

System (EFMS) coming into vogue, the wages are

supposed to be directly credited by the state to the

workers’ bank account. This was done with an aim to

avoid payment delays by cutting layers. But before the

state could do it, all the bank and postal accounts are

supposed to be verified and frozen for ensuring correct

crediting of the various payments. The latter has

proved quite problematic due to poor manpower of

these Central financial institutions. But even where

this is done, there have been considerable delays on

the part of the banks and post offices to credit wages to

the accounts of the households, resulting in huge

resentment. Moreover, with the drying funds from the

Centre, the States are finding it well nigh difficult to

meet the fund requirements from the executing

agencies, some-thing which is negatively impacting

the scheme.

The workers have been revolting and agitating against

delayed payment, not to speak of refusing to come

forward to take up new works. Delayed payment and

workers’ loss of faith in the executing agencies have

adversely affected the scheme’s execution. The same

also compromises the important tenets of the NREGA,

namely, provisioning of work within 15 days of

application, assured 100 days’ work to a household in

a year and payment of wages within fifteen days of the

work. The recent directives relating to asset creation

and for intensified execution in shortlisted blocks are

welcome but the same definitely ought not to be at the

expense of the right to work as promised by the

NREGA. Any compromise with the tenet of right to

work, as enshrined in the Constitution of India, would

be a regressive move.

One should not forget that the NREGA has also been

envisaged as a medium for optimal reallocation of

values which has resulted in a huge multiplier effect in

the countryside by keeping the demand afloat in times

of recession. Believe it or not, the NREGA has

definitely been one of the principal reasons for the

rising wages of urban workers due to reduced

emigration of rural workers to towns and cities due to

facile availability of works in our boondocks. Effective

wages have gone up all across resulting in enhanced

pay-offs for the workers who have generally been

short-changed. The demand-driven NREGS works

have ensured availability of works during the lean

season in the countryside. The same also had a salutary

effect on the consolidation of family values and a

redirection of focus on improvement of agrestic

infrastructures is palpable.

The observers feel that the policy-makers should not

throw the baby with the bathwater by trying to reinvent

the wheel. The NREGS is an offshoot of lots of

thinking and is definitely an improvement on all its

previous avatars like Food for Work Programme,

Swarnjayanti Gram Rojgar Yojna, Jawahar Rojgar

Yojna et al. The scheme has been quite progressive in

the sense that it does not discriminate between BPL

and non-BPL families as the BPL list itself is not a

foolproof list to select the beneficiaries from. The

flexibility and independence the NREGS promises to

the executing agencies coupled with tighter

transparency norms ensure better delivery than any

other scheme has ever done. One feels the need for a

broad-based discussion and consensus to consolidate

the gains made through the NREGS to make it further

efficient and effective.

http://www.mainstreamweekly.net/article5281.html

In the greater scheme of things:

Recent announcements on possible changes to the


Guarantee Act (MGNREGA) and restrictions on its


coverage are baffling and worrisome. The passing of

the MGNREGA and the Right to Information Act

heralded a new vision of citizenship and state

responsibility. The former created a safety net for the

rural poor. The latter gave taxpayers and voters an

opportunity to bridge the gap between state promise

and process.

An energetic government can profitably use and

improve the MGNREGA. The proposal to restrict

access based on whether a household lives in a

“backward” block is retrograde. A vulnerable family

would then only get benefits if it lives among the poor.

This undermines one of the main objectives of the act,

namely to provide relief in the face of unexpected

disasters. When coastal Andhra Pradesh and Odisha

are hit by cyclones, or ethnic or religious conflict

erupts in Assam, Bengal or Gujarat, do we really want

to ask whether families are living in an MGNREGA

block?

Some might argue that the MGNREGA has not

achieved its objectives. The report of the Comptroller

and Auditor General (CAG) last year revealed unspent

allocations, unfinished projects and financial

irregularities in materials-contracts. It would be hard to

find a government programme without these. In

contrast, there are reported results from survey of a

sample of almost 40,000 listed beneficiaries: three-

quarters knew the minimum wage and their entitlement

to 100 days of work, two-thirds received wages within

15 days of completing work, 70 per cent reported

useful assets in the village as a result of the scheme

and the average wait between a job request and

employment was only nine days. Although minimum

wages have been in force since Independence, rural

households in my own surveys prior to the scheme

rarely knew of them, since they were never paid.

One of the main advantages of the MGNREGA is that

it is self-targeted. As long as transfers are not made to

fictitious workers, those with better work options will

simply not enrol. Households will opt for unskilled

labour at minimum wage only when they cannot do

better. This is evident in the CAG sample of

beneficiaries: average annual household income is Rs

20,000, 43 per cent are illiterate and a majority live in

impermanent structures. Access restrictions are

unnecessary in well-designed and self-targeted

programmes.

When public education expands and economic growth

leads to increases in the demand for skilled labour,

spending will decline without executive intervention.

This, again, is in contrast to many other government

programmes for which the National Sample Survey

Organisation data show little correlation between

household expenditure and the probability of being

classified as “poor”.

The design of the act is innovative because it uses

temporary transfers to needy households to bring about

long-term improvements in their wellbeing through the

better management of village resources continued…

http://indianexpress.com/article/opinion/columns/in-the-greater-

scheme-of-things/

NREGA is in need of reform: Jean Dreze,

economist-cum-activist:

Atmadip Ray, ET Bureau Nov 12, 2014, 04.46 AM

IST

For one who had worked so closely to frame the

world's largest job guarantee programme, known as the


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 generation

figures are increasingly consistent with independent

household 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 vulnerable 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 correspondents 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 the account holders, including, for

instance, prompt and convenient payment of wages or

pensions. How Jan Dhan Yojana is supposed to help in

that respect is not clear as things stand. Some people

think cash transfers are seamless, but flow-of-funds

problems affect most social programmes including

NREGA, social security pensions and even midday

meals.

http://articles.economictimes.indiatimes.com/2014-11-

12/news/56025989_1_nrega-jean-dreze-leakages

Sharpest-ever fund cut for rural job scheme:

Between April and September 2014, the central govt

released Rs 13,618 cr to states, against Rs 24,676 cr in

the same period last year

Namrata Acharya | Kolkata November 8, 2014 Last

Updated at 22:40 IST

The Union government has severely cut the funds for


Guarantee Act, one of the largest job-creation

programmes in the world, even as it deliberates on

framing new norms for it.

Compared to last financial year, there has been nearly

a 45 per cent reduction - the sharpest since the

inception of the scheme - in funds released by the

Centre to states till September for Mahatma Gandhi

National Rural Employment Guarantee Act (NREGA).

Between April and September 2014, the central

government released Rs 13,618 crore to states, against

Rs 24,676 crore in the same period last year.

Launched in 2005, the NREGA overhauled the labour

market by promising 100 days of work a year to each

rural household at a pre-determined minimum wage

rate. The daily wages under the scheme, as par revision

in April 2012, was between Rs 122-189.

In addition, the former UPA government further

increased wages in Bihar, Jharkhand, Andhra Pradesh,

Mizoram, Nagaland, Sikkim and Tripura. In contrast,

the wages for casual labourers across sectors varies

between Rs 80-220 per day, with the agriculture sector

accounting for some of the lowest wages.

Statewise allocation of funds in show how the Centre

has squeezed the scheme this year. In Maharsahtra, the

fund allocation came down to Rs 136 crore till

September this year against Rs 1,152 crore in the same

period last year.

West Bengal and Karnataka have also been at the

receiving end of this cut. While in the former, the fund


release reduced from Rs 2,214 crore last year to Rs

1,782 crore, in the latter, it came down from Rs 774

crore to Rs 439 crore.

A fund crunch in the district level is making its effects

felt. "The fund allocation under the NREGA has gone

down substantially since the new government come to

power," said a district official in West Bengal.

Higher prevailing wages in NREGA had affected the

wages in sectors like real estate and agriculture.

According to Pradeep Sureka, a real estate developer

in Kolkata, the average daily wages of casual labourer

has increased at the rate of 15-20 per cent annually

over the last few years.

At present, an unskilled labourer in the real estate

sector earns Rs 200 per day, while the wages of semi-

skilled or skilled labourers is between Rs 500-600 per

day in the state.

"Getting labourers in the agriculture sector had been

very difficult over the last few years, as the wages are

much lower than under the NREGA,"said Pranab

Chatterjee, a professor at Bidhan Chandra Krishi

Viswavidyalaya.

According to the proposals of the central government,

plans are afoot to link the scheme to agriculture

linkages.

According to a government note, if at least 60 per cent

of the works to be taken up in a district in terms of cost

is for the creation of productive assets linked to

agriculture and allied activities through development

of land, water and trees, it will bring at least Rs 25,000

crore of investment into agriculture.

This apart, other changes would lead to deploying of

an approximate Rs 8,000 crore for creating

infrastructure like minor irrigation structures,

according to the note.

The central government has also been considering an

amendment aimed at restricting the NREGA to the

country's poorest 200 districts.

http://www.business-standard.com/article/economy-

policy/sharpest-ever-fund-cut-for-rural-job-scheme-

114110801336_1.html


This information bulletin is a part of our initiative towards improving

water conservation through leveraging NREGA.

Supported by: Hindustan Unilever Foundation

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