‘MGNREGS job demand no indicator of distress’
- Demand under the Mahatma Gandhi Rural Employment Guarantee Scheme was not a “real indicator” of rural distress.
Highlights:
- While there is a marked variation in the performance of the scheme across States, none of the studies conducted so far has come up with a satisfactory explanation on the unevenness in outcomes.
- Tamil Nadu has less than 1% of the poor population in the country; it accounted for nearly 15% of all the MGNREGS funds released in the financial year 2023-24.
- Kerala, with only 0.1% of the poor population, used almost 4% of the total funds allocated.
- Together, they generated 51 crore person-days of employment.
- In contrast, Bihar and Uttar Pradesh, with about 45% of the poor population, accounted for only 17% of the MGNREGS funds and generated 53 crore person-days.
- The correlation coefficient, as per the survey, between State-wise multidimensional poverty index and person-days generated was only 0.3, indicating that the MGNREGS fund usage and employment generation were not proportional to poverty levels.
- A coefficient of 1 would indicate that the poorer a State, greater the number of person-days it would generate, while a coefficient of 0 would indicate no relationship between poverty and person-days.
- The Survey thus concludes that demand under MGNREGS is not a real indicator of rural distress but is rather predominantly linked with the State’s institutional capacity and to some extent also different minimum wages and other considerations.
- At the same time, it concedes that the variation in fund usage can be attributed to the varying MGNREGS wage rates in each State.
- States such as Haryana, Kerala, Tamil Nadu, and Karnataka have relatively high notified wage rates under the MGNREGS.
- The difference in registering the demand for the scheme is heavily dependent on the efficiency of State administration.
- This is reflected in the fact that despite provisions mandating States to grant unemployment allowance, only ₹90,000 was released in FY24 and ₹7.8 lakh in FY23 across all States.
Prelims Takeaway
- MGNREGS