Teaallotment for that MGNREGA In Budget ₹ 60,000 crores. This is less than 0.2% of GDP, the lowest ever allocation as a percentage of GDP. World Bank economists estimated that the allocation should be 1.6% of GDP. In the last two years, the new financial year began with more than one-fourth of the allocation of arrears of salaries from previous years. Assuming a conservative estimate that the next fiscal year will start with pending wages of ₹15,000 crore and accounting for inflation, the actual allocation for MGNREGA will be less than ₹45,000 crore. A statement by People’s Action for Employment Guarantee and NREGA Sangharsh Morcha estimated ₹2.72 lakh crore as the minimum budget required. Accordingly, even Rs 1.24 lakh crore can generate only 40 days of work per household per year.
Aided by a complex technical mechanism, there has been a steady centralization of the program structure, even as wages remain below the minimum agricultural wage for most states. Delays in salary payments continue, and there is evidence that these are due to insufficient allocations. But what has received less attention is the issue of unmet demand, which is also related to inadequate allocation.
a demand-driven law
MNREGA is a demand driven law. Every household should get work within 15 days of the demand for work, failing which the workers are legally entitled to unemployment allowance. But this demand-driven aspect has suffered. Receipt of work and wages is contingent on household details being entered on MGNREGA software called Management Information System (MIS). MIS has been used to reverse ACT in several ways, one of which is to reduce task demands. Due to budgetary constraints, officials usually assign fewer days’ work to many households or assign several days’ work to some households. Two crore new job cards were issued between 2019-20 and 2022-23, reflecting sustained demand; Yet, the average number of days of employment remained around 45 days, testifying to demand suppression.
We define unmet demand as the deficit between the work demanded and the work received. Officials also do not enter demand for work on MIS due to insufficient funds. This can only be learned through surveys. Unless the details are on the MIS, it is impossible to calculate the unmet demand. We present some preliminary estimates of unmet demand from an ongoing study based on MIS data.
The National MIS report shows the number of households that sought and received work. The working days created are available nationwide and for each state and panchayat. However, the total mandays demanded at the state and national level are not available in the form of national MIS reports; It is available for each Panchayat. Therefore, using the national MIS reports gives us only an incomplete picture of unmet demand. Let’s see why. Suppose a family has demanded work for seven days and it has got work for three days. Then, as per the national MIS report, since the household demanded and got work, the unmet demand at the household level is zero. But the working day for incomplete demand is four days. There is no national MIS report showing this. We have to resort to statistical techniques to arrive at the working days of unfulfilled demand for each state.
In our ongoing study, we sampled 10 panchayats from a randomly selected block in each district of seven states (Assam, Bihar, Chhattisgarh, Jharkhand, Karnataka, Kerala and West Bengal) for 2019-20. The analysis is based on man-days demanded and work done for 11.14 lakh workers in 1,400 panchayats. Our preliminary results do not account for situations when work is offered but either workers are absent or their details are missing from the workplace attendance register.
Using a method called Bayesian hierarchical modeling, we estimated that the weighted average workday for these states was 34%. But the national MIS report shows that the unmet domestic demand for these states was 11%-13% in the last four years. Domestic unmet demand across the country was also in the same range. This means that the national MIS report underestimates the unmet demand.
taking into account the contradictions
A study of four states released in October 2022 by Azim Premji University, NREGA Consortium and CORD also showed high levels of unmet demand in 2019-20. According to this, 39 percent of the households did not get a day’s work despite wanting an average of 77 days, and those who got at least one day’s work needed 64 more days of work. It was found that, to meet the full extent of work demand, the labor budget in the surveyed blocks would have to be tripled. In contrast, according to the national MIS report, it appears that in the last four years almost all households that sought work exceeded those that were offered work.
The Ministry of Rural Development claims that the budget has been cut due to low demand, but the reality is quite the opposite. Budget cuts have created a vicious cycle of demand suppression, delayed salary payments, an overburdened field staff and corruption. They further discourage the laborers from doing MNREGA work.
For transparency, the working days sought should be made readily available for each state. Ground reports suggest that the recent introduction of an app to mark the attendance of workers has added to the woes of the workers. This is the latest in a series of technological reforms when the real problem is underfunding and excessive centralisation.