Author : Niranjan Sahoo

Expert Speak India Matters
Published on Jun 11, 2020
Making MGNREGA pandemic-proof

A prolonged national lockdown to stem the spread of Covid-19 and an unprecedented reverse migration of workers have brought the spotlight back on country’s largest social protection program called Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).  With millions of guest workers having returned to their home states and the pandemic continuing to bring heavy tolls on economy and jobs particularly those in the informal sector, a much scorned job scheme is being sought after by governments and desperate citizens like never before.  In May alone, a record 417.7 million person-days of work (13% rise from the previous year earlier) was availed under MGNREGA. Plus, the number of households covered under the job scheme went up by 31% on-year in May to 28 million, highest ever numbers for a month since the scheme was launched some 15 years ago. In short, with most rural households lacking decent safety net, MGNREGA has emerged as a ray of hope for many as the threats of global pandemic remain at large. 


Billed as world’s largest state sponsored job-scheme to eradicate poverty by the World Bank, MGNREGA was one of the major flagships programmes of the Congress led United Progressive Alliance government in its first term (2004-09). From being a core item of the Congress Party’s election manifesto in 2004 to becoming an integral feature of the Common Minimum Programme  of the UPA-I, MGNREGA was carefully designed by a host of civil society experts and policy practitioners to address the growing rural distress by guaranteeing an assured 100 days (unskilled manual work) work to rural households. While in the initial phase (2006-2007), the scheme was spread across 200 rural districts of the country, by fifteenth year, the scheme was implemented in as many as 691 districts in the country, signifying its importance.

In its initial avatar, MGNREGA clearly aimed at building critical assets in rural areas particularly drought-proofing through water harvesting structures, flood management and the empowerment of the poorest and most marginalized communities. A key highlight of the scheme was the central role it accorded to the neglected Panchayati Raj institutions (PRIs). From identification of works, section of beneficiaries to payment of wages, Gram Panchayats (GPs) were provided crucial roles in running the scheme. Yet, the least talked about this demand-driven scheme is the emphasis on transparency. With many flagship schemes having failed due to lack of transparency and accountability in the past, MGNREGA was designed to make every bit of information (from selection of beneficiaries to wage payments) available in the public domain. The job scheme website in each state provides data on implementation on real time basis. Yet, most enduring aspect of this scheme is the built in provisions for social audits twice a year, where the people and beneficiaries audit the programme. Finally, with robust accountability structure, the programme has continuously been improved and innovated by the implanting states, although the key goals have remained unchanged. 

NDA Government and MGNREGA

While a number of economists and policy practitioners have remained very critical of this “entitlement and rights-based” scheme, some calling it “digging holes”, “playing with mud” and “gravy train”, the Bharatiya Janata Party led National Democratic Alliance (NDA) government which took the rein in 2014 termed scheme as a symbol of the UPA government failure to eradicate poverty in 60 years. With new dispensation under the leadership of Narendra Modi expressing its keen interest to promote ‘empowerment’ narrative through host of technology enabled platforms particularly cash-based welfare set up via Jan Dhan-Aadhaar-Mobile (JAM) trinity, MGNREGA found few takers in the ruling dispensation. The NDA’s first two years saw the government trying to strangulate the scheme through low allocation of funds.

However, with demonetization and slack implementation of Goods and Services Act creating massive crisis for farm sector and informal sector employment, the NDA government was forced to increase the allocation to the scheme. In fact, some of its own chief ministers who made substantial political capital out of implementing MGNREGA voiced their concern against any dilution of the scheme. As a result, since 2017 the NDA government steadily increased the allocation for the scheme. In fact, 2019 saw the highest ever allocation for the job scheme. Not only this, the NDA government set up a new scheme Unnati with allocation Rs 20,000 crore to provide MGNREGA workers in the age group of 18 and 45 vocational skills. The government tasked a Group of Ministers on employment to find ways and means to link job scheme with skill development programme. In short, from outright dismissal to grudging acceptance, the NDA government has taken a complete U-turn on the relevance of the scheme. Like it has done to many other UPA schemes such as DBT, Aadhaar, the NDA government has tried to expand the focus and reach of the scheme to make it effective.

Covid-19 and MGNREGA

The nationwide lockdown imposed to curtail the spread of coronavirus in end-March triggered a massive exodus of migrant workers from their host states to their home states. From one estimate as many as 30 million migrant labourers have returned to their home states since mid-March. The reverse migration of unprecedented scale prompted the Union government to allocate an additional Rs 40,000 crore (61,500 crore allocated in Union Budget 2010-21) taking the total yearly allocation to more than Rs one lakh crore. Once the curbs on lockdown were relaxed in a staggered manner in April, returnee workers lacking safety net such as agriculture land or savings looked for job scheme as some sort of last hope.

It is no surprise that maximum demand for MGNREGA work has come from states with large migrant populations such as Uttar Pradesh (UP), Chhattisgarh, Madhya Pradesh (MP), Bihar, Jharkhand, and Odisha.  According to latest data, in May alone, a record 50.5 million man-days of work were utilized in UP (299.3 per cent over May 2019), while the number went up to 41.5 million in Chhattisgarh (68.9 per cent) and 37.3 million in MP (65.1 per cent). Similarly, the number of households utilizing the scheme in  other labour exporting states such as West Bengal were 214.5 per cent, 113.5 per cent in Odisha and 62.1 per cent in Bihar in the month of May. In short, the much scorned MGNREGA has emerged governments biggest social protection programme in the time of global pandemic that continues to pose serious threat for economy and livelihoods.

Some Hard Questions

Yet, there are few pertinent issues with regard to MGNREGA that needs greater clarity. First and most basic issue is that as a critical scheme of social protection MGNREGA was originally meant for lean season April-May-June. Further, the scheme has a limit of 100 days in a year. With Covid-19 still looming at large which likely to last several months or year and many workers determined to stay in their villages for much longer duration, how does the MGNREGA address the prolonged demand? Second, if at all the government decides to increase the number of days, what kind of jobs that need to receive priority? Since its inception, MGNREGA has been utilized for drought proofing, rural assets creation among others. This cannot continue for perpetuity. Thus, time is ripe to change the stipulation of a 60:40 wage-to-material cost ratio.  Plus, why tie it down to particular “permitted works”? Third, why restrict MGNREGA workers from being engaged to undertake national highway work or any public work such as railway that require labour? Similarly, can MGNREGA workers be engaged in private agriculture works?  This may help in reducing input costs for cultivation and enhance capacity to employ more labour apart from addressing agriculture distress. In fact, much of this can be directed to aid small and marginal farmers and ones belonging to marginalized sections. In short, time is ripe to repurpose this important scheme to make it much more impactful and sustainable than it is.

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Niranjan Sahoo

Niranjan Sahoo

Niranjan Sahoo, PhD, is a Senior Fellow with ORF’s Governance and Politics Initiative. With years of expertise in governance and public policy, he now anchors ...

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