Budget 2017

The rise in allocation to MGNREGA is not 25% but just 1%, say activists

The government needs to make adequate funds available for the rural work programme, they say.

At first glance it would seem as if the Finance Minister’s announcement of an allocation of Rs 48,000 crore for the Mahatma Gandhi National Rural Employment Guarantee scheme is a dramatic increase of nearly 25% over last year’s allocation of Rs. 38,500 crores. In fact, the increase is a mere 1%, of Rs 500 crore, as two supplementary allocations during the course of the year made the total budget of 2016-’17, Rs 47,500 crore.

Regardless of the budget allocation, what needs to be understood is that for the MGNREGA to work as per the legislation, it needs to have adequate resources to be made available for work to be provided on demand. As of today, 22 out of 34 states have negative balances. As per the ministry’s own data a total of Rs 3,469 crores in pending liabilities have already piled up, even as they have spent 93% of the funds available for this financial year. This is likely to dramatically go up over the next two months, as traditionally demand for work has peaked during this season.

The Supreme Court has issued a series of strong orders in the ongoing Swaraj Abhiyan Public Interest Litigation, one of which stated, “the Government of India is directed to release to the State Governments adequate funds under the Scheme in a timely manner so that the ‘workforce’ is paid its wages well in time. The Government of India must shape up in this regard.”

Despite this, as per the Ministry’s mechanism of preparing indicative labour budgets, even to honour only the approved budget for the months of February 2017 and March 2017, nearly Rs 10,013 crores would be required (at the average cost per person day of Rs 228). This means that we would end the year with close to Rs 13,482 crores in pending liabilities, and a budgetary allocation that has not even kept pace with last year’s amount in real terms.

This unpredictable under resourced fund flow mechanism has implications for implementation, particuarly timely payment to workers, which greatly affects faith in the employment guarantee. The Supreme Court order emphatically stated that delayed wages were unacceptable and a violation of the rights of workers. Yet this continues with impunity. At present 54% of the wage payments continue to be delayed, and as a result Rs 231 crores of compensation to workers also remains due.

For casual workers suffering from the distress of demonetisation, the MGNREGA is intended to provide livelihood security net for exactly such situations. However, with pending liabilities already piling up, the situation is likely to get worse in the next two months as budget releases will only be made in April. Further, the notification for the requirement of aadhaar for accessing work under the MGNREGA from the next financial year, again in violation of repeated Supreme Court orders to not make aadhaar mandatory, is likely to have massive disruptive and exclusionary effects. The People’s Action for Employment Guarantee demands that the Supreme Court orders on Aadhaar and adequate funding be followed, the notification on mandatory Aadhaar be revoked and the adequate funds be made available to the MGNREGA to truly function as a demand based programme.

Signed by Aruna Roy, Mazdoor (Kisan Shakti Sangathan), Nikhil Dey (Mazdoor Kisan Shakti Sangathan),
Shankar Singh (Mazdoor Kisan Shakti Sangathan), Annie Raja (National Federation of Indian Women),
Kamayani Swamy (Jan Jagran Shakti Sangathan), Ashish Ranjan (Jan Jagran Shakti Sangathan) for People’s Action for Employment Guarantee.

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