Why in News?

• The biggest employment generating Programme, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme has received a serious setback due to financial crunch.
• More than 96% of the allocated money has already been spent or is needed to pay pending dues, with less than ₹2,500 crores left to sustain the scheme for the next two months.

Key Concerning Points:

• According to the scheme’s financial statement, Rajasthan has the highest negative net balance followed by Uttar Pradesh.
• January, February and March are months with little agricultural activity and rural workers move towards other employment opportunities but the scheme doesn’t have financial resources to pay them.
• In Rajasthan, worker’s wages have not been paid from past several months as the centre has not released the funds which violate the spirit of the Act and principles of right based implementation of the scheme.
• The Central Employment Guarantee Council which is responsible for a central monitoring and evaluation system for the scheme has not met in the last two years despite it being mandatory to hold a meeting every six months.

About Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is Indian labour law and social security measure that purposes to guarantee the “Right to Work”.

Objective of the act:

• The main objective of the Act is to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.

Problems Associated MGNREGA:

• MGNREGA is perhaps the most ambitious anti-poverty scheme launched anywhere in the world. However, the scheme has shown several anomalies when it comes to effective implementation.

1.Low wage rate-MGNREGA wage rate cannot be less than the minimum agricultural wage rate of the state. The low wage rates have resulted in a lack of interest among workers in working for MGNREGA schemes, making way for contractors and middlemen to take control, locally.
2.Insufficient Budget Allocation-The funds have dried up in many states due to lack of sanctions from the Central government which hampers the work in peak season.
3.Regular Payment Delays-Despite the order of the Supreme Court and initiatives and GO (Government Order) by the Union Ministry of Finance, no provision has yet been worked out in the MIS for calculation of full wage delays and payment of compensation for the same.
4.Corruption and Irregularities-The scheme is marred by the corrupt practices like the actual funds that reach the beneficiaries are very little compared to the funds allocated for the welfare schemes.
5.Discrimination-The cases of discrimination against the women and people from the backwards groups are reported from several regions of the country.
6.Non-payment of unemployment allowance-But, a huge number of unemployment allowances being shown in the Management Information System (MIS) currently.
7.Inadequate awareness– There is a lack of awareness among the public for this scheme and the government needs to work for more awareness and rights of the people especially women.
8.Poor infrastructure building-The issue of poor quality of assets.
9.Non- purposive spending- MGNREGA has increased the earning capacity of the rural people but the spending pattern of the workers assumes significance because there is hardly any saving out of the wage earned from MGNREGS.

Way Ahead:

• Social auditing-social audits of the scheme should be carried out as per rules and there should be an effective implementation of the provisions of the delay compensation system.
• Compensation: Under the scheme’s compensation clause, agencies responsible for the delay are expected to pay 0.05% of wages per day after closure of muster roll. This should be properly adhered to.
• Participation of Women:The participation of women must be increased through raising awareness about MGNREGA.
• Proper utilization of Funds:The Department of Rural Development should Analyse reasons for efficient utilisation of funds and take steps to improve the same.  In addition, it should initiate action against officers found guilty of misappropriating funds under MGNREGA.
• Regular monitoring:The frequency of monitoring by National Level Monitors (NLMs) should increase and appropriate measures should be taken by states based on their recommendations.
• The National Level Monitors (NLMs) are deployed by the Ministry of Rural Development for regular and special monitoring of MGNREGA and to enquire into complaints regarding mis-utilisation of funds, etc.
• Training of functionaries: Training and capacity building of elected representatives and other functionaries of PRIs must be done regularly as it will facilitate their Involvement in the implementation of MGNREGA.