A group of 80 eminent citizens, including retired civil servants and professors, have written an open letter to Prime Minister Narendra Modi asking him to release adequate funds to states for the Mahatma Gandhi National Rural Employment Guarantee Act immediately so that the administrations can continue the programme and expand it.

In the letter, the group pointed out that MGNREGA has proven to be a “crucial lifeline” for many rural families, especially during the coronavirus pandemic.

The letter noted that 41% more rural households had sought work in the first year of the pandemic in 2020 as compared to a year before that. It said that despite this “evidence of the critical security”, the fund allocation was cut nearly by 30%.

“Lack of funds results in suppression of demand for work and delayed payment of wages to workers,” it said. “These are violations of the Act; they also constrain economic recovery.”

The signatories include economists Jayati Ghosh and Jean Dreze, former member of the Planning Commission of India Abhijit Sen, retired civil servant Pronab Sen, Jawaharlal Nehru University professor emeritus Prabhat Patnaik, Mumbai School of Economics and Public Policy director Ritu Dewan.

The Centre has allocated Rs 73,000 crore to MGNREGA for the financial year 2021-’22. This is substantially lower than the actual expenditure of Rs 1.11 lakh crore in the current fiscal, which included an additional outlay of Rs 40,000 crore given by the government.

Experts had said that the massive underestimation in this year’s Budget allocation will severely impact employment generation, especially in context of the pandemic. With citizens losing jobs due to lockdowns, there has been a sharp rise in the number of people dependent on the rural employment scheme for their sustenance.

The letter pointed out that Rs 17,451 crore of the Rs 73,000 crore allocated would be used to meet the liabilities of previous years. It said that the estimated expenditure of the scheme has already exceeded the budget allocation with four months remaining in the current fiscal.

“As per official data, the People’s Action for Employment Guarantee estimates that as of 15 November 2021 the programme was in deficit of Rs.10,000 crore,” the letter said. “Over Rs.1,121 crore is due to the MGNREGA workers as wage payments.”

It added: “Twenty-four states and Union Territories have negative balances, having spent more than they received from the central government for this. This implies that the state governments are in no position to implement the Act.”

The letter also said that there was evidence that many households that had demanded work did not get it. It estimated the figure of unmet demands to be 13%. The letter said that this figure was a “highly conservative estimate” as it did not include the demand for work that is not registered on MGNREGA Management Information System due to a shortage of funds.

The letter said that unmet demands was as high as 20% in Gujarat, Bihar and Telangana.

“Without further increase in funds, the programme will also be unable to meet its promise of providing 100 days of work to every household that demands it: Over 51 per cent of households employed under MGNREGA this year got work for 30 days or less, and less than 10 per cent were employed for more than 80 days,” it said.

The Centre alone was responsible for delays in transferring wages for 71% of the total transactions, the letter said, citing a study by LibTech India that took into account 18 lakh wage transaction across 10 states during the first half of this fiscal.

LibTech India describes itself as a team of engineers, social workers and social scientists who are focused on improving public service delivery in India.

The letter said the Centre was also in violation of a Supreme Court order in the Swaraj Abhiyan versus Union of India case by not compensating the workers for the delays it was causing in the payment of wages.

“We therefore urge the central government to strengthen and expand the MGNREGA, by providing additional funds to meet the demand for work and to ensure that the programme functions as the law requires,” the letter said. “Through its effects on mass demand, this will also contribute to recovery of the overall economy and micro and small enterprises that are currently facing extreme difficulties.”