20th July – How MGNREGA transformed into a monument of failure?

There is now a plethora of evidence that the economy has been cooling down over the last three years. It is largely a result of declining demand, particularly in rural areas. Also disappointing was the government’s approach in dealing with most rural development programmes. MGNREGA

Apathy to MGNREGA –

  • The UPA, which enacted MGNREGA and reaped political dividends for its successful rollout during its first term, contributed to the weakening of the programme.
  • The government kept the budget allocation low and created administrative bottlenecks that stifled the programme. This trend has continued under the NDA.

The facts speak for themselves –

  • According to National Sample Survey Office (NSSO), the wages received by casual workers employed under MGNREGA during 2007-08 i.e. the second year of MGNREGA implementation, were 5% higher than market wages for rural male workers and 58% higher for rural female workers.
  • By 2009-10, MGNREGA wages were only 90% of market wages for males, but 26% higher than market wages for females.
  • By 2011-12, they were lower than market wages for both category of workers, but for females, they were close to market levels.
  • The 2017-18 PLFS estimates show that private market wages for males were higher than MGNREGA wages by 74%, and female market wages were higher than MGNREGA wages by 21%. Clearly, no male worker is going to demand MGNREGA work when he can get a much higher daily wage with the same effort.

The suffering of women –

  • Women continue to demand and work under MGNREGA, though market wages are higher, because of non-availability of work and discrimination as well as exclusion from the private labour market.
  • A peculiar result of this is the overwhelming participation of women in MGNREGA in southern states, where casual wages are higher in general, with Kerala reporting only female workers.

Lower wages –

  • MGNREGA wages are less than half of the national minimum wage of ₹375 per day (as on July 2018) proposed by an expert group.
  • The Economic Survey presented on 4 July has a chapter on minimum wages, which argues in favour of keeping minimum wages at a sufficiently high level to reduce poverty and inequality.
  • At a time when the government is pushing for a minimum wage code, the largest government-run programme has been violating state minimum wages for almost a decade.

Way forward –

  • MGNREGA could have been the lifeline to revive the rural economy, which is in distress. However, the political slugfest and flawed policies of the government have led to a situation where MGNREGA, bereft of its original character, is unable to provide a stimulus to the rural economy.
  • It also created rural infrastructure and provided much-needed employment to the country’s rural population. A systematic push through wage increase in MGNREGA could be a way forward to overcome the rural distress.


Also read: 19th July – At the UNSC, a three-point agenda