Thursday, 27 April 2017 | Uttam Gupta | in Oped
Modi has pressed all the right buttons to ensure that MGNREGS becomes an instrument of promoting his Government’s inclusive development agenda
In a stunning revelation, Amarjeet Sinha, Secretary, Ministry of Rural Development (MoRD), revealed that the Government had cancelled nearly 10 million fake ‘job cards' under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million.
Under MGNREGA — a flagship welfare scheme launched by erstwhile UPA dispensation in 2005 — ‘guaranteed' employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid at the rate of Rs100 per day. For this purpose, one job card is given to each family. A card holder is expected to work on projects such as irrigation, road construction, building houses, digging tube wells, constructing toilets etc. The scheme is one of the world's biggest job guarantee programmes.
In the initial years, an audit of the scheme had revealed large-scale irregularities in several States — money not reaching intended beneficiaries, fictitious payments/issue of job cards in non-existent names, and the same person holding multiple cards etc. Immediately on taking charge, the Modi Government directed the ministry to conduct a rigorous scrutiny. The ministry initiated an exercise to clean up the system and ensure transparency and accountability in its implementation. It conducted a house-to-house survey to check authenticity of workers by focusing on factors such as Aadhaar numbers, photographs of beneficiaries, details of payments, migration and death of job-seekers etc. The identification and cancellation of fake cards is an outcome of this process.
The revelations vindicate the charge made by Prime Minister Narendra Modi while replying to a debate on the President's address in 2014, when he described the scheme as an epitome of corruption. The number of bogus beneficiaries is about 15 per cent of active households engaged. During 2016-17, the total expenditure under MGNREGA was over Rs58,000 crore. The funds siphoned off would be about Rs9,000 crore.
Since 2005, an aggregate of about Rs400,000 crore has been spent till 2016. Even taking a most conservative estimate of leakage, the money misappropriated by corrupt politicians and bureaucrats would add up to Rs60,000 crore.
Apart from leakage, even where money was paid to genuine persons, the scheme did not create productive assets. In fact, its very architecture militated against the productive deployment of funds. Thus, even if the Government has no project at hand, a person holding a job card still has to be paid (this is a constitutional obligation). This creates an inherent incentive for the card-holder to not work. Even the political establishment of the day, which put a premium on nepotism and corruption, had no interest in undertaking projects. The bias against asset-creation is also reinforced by the fact that under the UPA regime, wage to materials ratio was 60:40. This meant that out of Rs100 allocation, the administration could spend Rs60 on wages and Rs40 on materials. In actual implementation, the wage component was even higher at 75 per cent in several States.
The present Government sustained the scheme but vowed to get rid of these maladies. To prevent misuse, it has shifted to an electronic muster roll of beneficiaries (as against manual records under the previous dispensation) and latched on to an Aadhaar-based payment system to ensure that money is transferred to genuine beneficiaries only and in full. It has also alluded to updating the muster roll by conducting surveys regularly. The idea is to keep the scheme free from bogus elements for all time.
The process was carried forward in subsequent budgets. To achieve the desired results, it altered the wage to material ratio to 51:49. In other words, out of Rs100 allocation, Rs51 are to be spent on wages and Rs49 on materials.
In short, Modi has pressed all the right buttons to ensure that the scheme becomes an instrument of promoting its inclusive development agenda. However, he must continue to harp on States to come up with concrete projects on ground for gainful employment of rural poor and avoid turning in to a pit of wasteful expenditure.
(The writer is a public policy analyst)
