The World’s Largest Employment Program: 10 Years On

4 May 2016
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This year marks the 10th anniversary of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the world’s biggest government employment program, which guarantees 100 days of employment per household in rural India.

This year marks the 10th anniversary of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the world’s biggest government employment program, which guarantees 100 days of employment per household in rural India.

Rising discontent in rural India and severe droughts affecting several states have recently brought the program back into the national limelight. While Prime Minister Narendra Modi was quick to judge MGNREGA as a failed project and a waste of money when he assumed office in 2014, desperation among rural households for additional income support has compelled him to change his mind. Presenting the FY 2016-17 budget last month, the government sought positive press by calling it the largest annual allocation ever for MGNREGA (which, as it happens, it’s not).

In an interview with Bloomberg News, Sabina Dewan, Executive Director of JustJobs Network, called MGNREGA “good policy weakly implemented” – good policy because it aims to create a social safety net for a large portion of India’s disadvantaged rural population, but weakly implemented because it rarely delivers on its promise of 100 days of work, the program’s core principle.

In the FY 2012-13, the national average number of days worked by program participants was 46. This fell to 40 days in FY 2014-15, when support for the program from the Modi government was at its lowest. Last year saw a slight increase of average days worked, up to 48. Quality of implementation varies among states. In FY 2014-15, Maharashtra reached a 53-day average, while Uttar Pradesh, a poorer state, achieved only 33 days on average (State of India’s Livelihoods Report 2015).

But no matter where one lives in rural India, demanding the program’s full allocation of paid work is near impossible. In FY 2014-15, just 6 percent of rural households got 100 days of work. Based on the safe assumption that most participating households are poor enough to want the full number of workdays, the 100-day guarantee still seems like a pipe dream.

Does the low number of working days in the program reflect lack of awareness or low funding?

The program is demand-based – i.e. rural households have to ask for work from the state. It’s not offered to them automatically on the basis of income or social status. Therefore, people’s lack of awareness about the 100 workdays owed to them hinders the full implementation of MGNREGA. Today, MGNREGA is quite a famous program, it is therefore more likely that people know about their rights, but do not know how, or whom, to approach to get work.

Moreover, if they do, the next hurdle is receiving work. There is not always enough work available to meet the demand, or the participants risk working without timely payment of wages. One reason for this is lack of funds from the central government. At the end of 2015, 95 percent of the annual funds for MGNREGA – meant to last through the end of March 2016 – had been exhausted.

The central government appears unwilling to accept that MGNREGA, since it declares work a legal right of rural households, must have funds available at all times to meet the demand. According to Nikhil Dey, a grassroots activist associated with the Mazdoor Kisan Shakti Sangh (MKSS), any allocation below INR 500 billion (US$ 7.51 billion) in this year’s budget would be insufficient – an estimate he makes by looking at last year’s expenses and then adding pending payments and the inflation rate. This year’s allocation, INR 385 billion (US$ 5.79 billion) is clearly insufficient by this calculation.

One positive note worth highlighting is the impact of MGRNEGA on women’s empowerment. NREGA jobs may be some of the only in the country where women are paid equal to men. This has contributed to reducing the gender wage gap in agriculture and to giving women more financial independence. The inclusion of women, however, is not reflected at other levels of MGNREGA implementation; women are mostly excluded from planning the work projects executed under MGNREGA.

It’s evident that, as the program reaches its 10-year anniversary, MGNREGA struggles to reach its full potential of acting as an employment-based safety net for rural households. The increase in funds MGNREGA is receiving this year may act as a moderate revival of the program, assuming implementation issues can be addressed. But if MGNREGA is to serve the broader aim of including the rural population in India’s growth story, chronic issues of insufficient funding and low awareness must be addressed with a more comprehensive strategy.