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MGNREGS amidst the Pandemic: Impact and the Way Forward – IMPRI Impact and Policy Research Institute

MGNREGS amidst the Pandemic: Impact and the Way Forward - IMPRI Impact and Policy Research Institute


MGNREGA is a 20-year-old employment act that guarantees 100 days of work to all households whose adult members volunteer to do unskilled manual work.  During the pandemic, it has been a saviour to migrant workers who could barely provide for their families, but it couldn’t supply for the ever-increasing demand.

To discuss its role during the pandemic and the future of employment in India, the Center for Work and Welfare (CWW), IMPRI Impact and Policy Research Institute, New Delhi, Indian Social Institute (ISI), New Delhi and Counterview hosted a panel discussion under the #WebPolicyTalk series, The State of Employment and Livelihoods – #EmploymentDebate on MGNREGS Amidst the Pandemic: Impact and the Way Forward.


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Fr. Dw Denzil Fernandes, Executive Director, Indian Social Institute, New Delhi, was the chair for the discussion and commenced by introducing MGNREGA, the largest employment guarantee act in the world. Since the NDA government, the resource allocation for MGNREGA has been declining along with poor implementation. However, the pandemic resulted in a compelling increase in demand for work and therefore forced the government to double (nearly INR 1 Lac Crore) the allocation of resources. The fifteen-year-old employment guarantee act has had a significant impact in the last two years and helped migrant workers during these times of distress.

Impact of NREGA During Pandemic

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Prof Aruna Roy, President, National Federation of Indian Women (NFIW); Founder, Mazdoor Kisan Shakti Sangathan (MKSS), started by a reminder of one of the first statements of the Prime Minister, where attention was drawn to two prospective failures of the UPA government- RTI and NREGA and how their retention would be done to prove them as a monumental failure of the inefficient government. She believes that if it weren’t for NREGA, the Indian government would have been extremely embarrassed during the pandemic, with enormous figures of starvation death, unemployed people and riots. There are problems in the implementation process of NREGA because of democratic bureaucracy and lack of political intent. However, NREGA must be nurtured for the country to progress.

According to the Inequality Virus Report released by Oxfam, India’s 100 billionaires raised their fortunes by approximately INR 13 lac crores and if each one of the 138 million poorest people were paid a cheque of INR 94,000, that money would be spent. An unskilled worker would take 10,000 years to earn what Mukesh Ambani made in an hour during the pandemic, and 3 years to make what Ambani makes in a second. This capital massed up during the pandemic indicates the biased nature of our policies and the desire of the government to not benefit the poor but to make the rich richer.

MGNREGA was the only support for people who migrated back to the rural areas when the pandemic hit India and even people with graduate degrees and white-collar jobs enlisted for work under NREGA.

NREGA is a workers-driven program, which is independent of the budget allocation and therefore, a demand for work must be supplied. An estimation of the budget could be calculated, however, the financial outlay is only decided by the country’s economy. Data shows that during the pandemic, 13.25% of households who demanded work, were not provided. The central government has been accusing state governments with opposing parties of false figures of demand for work, however, that’s not true.

The budget allocated for NREGA by the government for 2022 is 34% less than that revised allocation for the financial year of 2021. This happened because of back payments of employment wages that were not paid on time. As of September 2021, the government already spent 90% of the NREGA budget and numerous state governments ran out of funds to pay wages to workers and is running back on payments. On top of that, the introduction of caste-based fund transfer resulted in detrimental effects on the ground.

Prof Roy concluded her speech by suggesting that part of the payment, under NREGA, should be in cash and a part of it should be in-kind i.e. in form of subsidized ration. This way, the Food for Work Program can also be incorporated. Work must be granted when demanded and full wages must be paid from the NREGA budget. In situations of calamities, the government must expand the number of days to 50 for unemployment allowance and other provisions. NREGA.

The unemployment act must allow access to any adult recovering seeking work while recovering from Covid. 2-5% of the tax collected from MNCs should be invested in the Disaster Management Employment Guarantee Program. Social audits must take place at all MGNREGA worksites to ensure the efficient and effective working of the program.

Issues and Challenges

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Prof Irudaya Rajan, Founder-Chairman, The International Institute of MIgration and Development (IIAD), Thiruvananthapuram added to the discussion by highlighting that politics must stay out of the livelihoods of people. Programs started by previous governments must not be looked at as a failure but as an opportunity. He gave an example of Tamil Nadu where a scheme started by the ADMK government, was not discontinued by the next government but worked upon improving the existing noon scheme.

The pandemic has brought back our focus to the rural issues, which were earlier looked upon. People migrating back from their destination to origin during the pandemic shows how urbanisation has failed people. The government policies have failed to keep the people in the cities. Additionally, we have also failed in terms of the Interstate Migration Act, which says that employers must take care of their workers. Prof Rajan pointed out the prime minister’s statement “Stay where you are” during Lockdown 1.0, however, no statements were made on how they will survive and provide for themselves in the cities without getting wages.

The issue of companies cutting off employees’ salaries is being overlooked and not talked about and was referred to as ‘Daylight Robbery’ by Prof Rajan. The so-called ‘smart cities’ were actually ‘dying cities’ during the Covid-19 pandemic. Cities have failed to protect the people and MGNREGS has been unable to cater to people in need. The fact that migrants, who went back to rural areas, turned again to these cities where they were labelled as ‘covid-carriers’, proves how NREGS has been successful but not successful enough.

Prof Rajan discussed the reason for migrants moving back to the cities and believes that the wages under the unemployment scheme are low. The wages for 100 days when distributed in the entire year within one household, is not enough to cater to basic needs. He showed agreement to Prof Aruna Roy’s suggestion of having flexibility in the number of days and thinks a new unemployment scheme must be introduced for urban areas, however, the wages must be re-envisioned and ameliorate the suffering of the urban poor.

The Relation between MGNREGA and Migration

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Prof R B Bhagat, Professor and Head, Department of Migration and Urban Studies, International Insitute for Population Sciences (IIPS), Mumbai emphasised Prof Rajan’s point of rural-urban migration by talking about the migration scenario in the west. During the 18th and 19th centuries, many of the western countries were colonial powers and the people not only migrated from rural to urban but also immigrated abroad in search of better opportunities. There was a huge transformation and rural areas started disappearing, hence resulting in no agrarian crisis.

However, in India, this was not the case. 45% of the workforce in our country is dependent on agriculture, however, only contribute 14% to the GDP, implying a massive rural-urban divide. In India, migration within the state is more dominant than interstate migration and MNREGA’s efficacy has saved lives in the distress of the pandemic.

Prof Bhagat argues the misconception of MNREGA vs Migration i.e. if MNREGA is successful, migration will decline. He believes that this is not true and that MNREGA and migration should be seen as livelihood strategies. While MNREGA gives minimum security of livelihood, migration is another form of livelihood and both of these choices can have various outcomes. For example, the first outcome is that MNREGA can reduce migration (seasonal and temporary migration) for unskilled labour who cannot take advantage of urban opportunities.

The second outcome is that MNREGA and migration are complementary. Studies show that many households availing benefits of MNREGA also migrate to cities. This means that they migrate to urban areas for a few months and come back to their villages for the rest of the year when they can take advantage of the scheme. The third outcome is that MNREGA can encourage migration. Migration comes at a cost and therefore MNREGA’s benefits uplift the level of income of people and make them aspirational and capable of incurring migration costs.

Prof Bhagat concluded by highlighting the need to re-envision the village plan so that it reflects the true needs of the people. This must be done by a combination of experts as well as local panchayats to ensure maximum harvesting of benefits. Additionally, MNREGA should not be seen in isolation but seen with other programs like Food Security, Health Insurance etc. as all of them are interconnected and portability of the rights must be ensured.

Financial and Administrative Backlogs

Dr Gurjeet Singh, State Coordinator, Social Audit Unit, Jharkhand; Former Consultant, Ministry of Rural Development, Government of India pointed out three important programs that helped people during the pandemic- MGNRES, National Food Security Act (NFSA) and National Health Mission (NHM). It was the first time that the need and urgency of such programs were established and helped many people to a large extent.

The challenge is now about how the government can extend the scope of this scheme, its financial outlay and incorporate semi-skilled and skilled workers in its ambit. The pandemic exposed the gaps in the planning and implementation processes of MGNRES. The concept of planning and preparation before the start, with each village and GPs having a shelf of work,  must be re-established and re-designed so that the needs are fulfilled as soon as work is demanded (without any lags). 

The families under MGNERA has seen a significant increase but the families completing 100 days of employment are still low. Due to implementation gaps and process defaults. It’s time that MGNERA is seen first as an individual entitlement and then as a family entitlement.

With the financial outlay rising and less monitoring due to covid-19 restrictions, pilferage and corruption have been rising. The number of people who were registered but not found at the worksite rose from 25% to around 65-70% during the pandemic, implying a drastic increase in corruption. Therefore, community processes must be strengthened through vivid vigilance, the formation of monitoring committees and concurrent period auditing. Prof Singh concluded his speech by pointing out how the pandemic has stressed the need for an urban employment guarantee act and must be designed very cautiously as the needs of urban unemployed are very different from rural employed.

Sectoral Changes

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Sandeep Chachra, Executive Director, ActionAid, India, started by stating the interim nature of MGNREGS and how it serves as a safety net program for rural people across the country. Over half of the world’s population is either involved in the informal sector or unemployed. Coming to India, approximately three-fourths of the population, which includes women and young professionals, is in a tenuous relationship with wages in terms of seasonality and irregularity.

If we divide the population into productive labour and reproductive labour, the largest burden of accumulation falls on women. And to find liberation from that, a framework covering women employment rights must be integrated as providing solace to informal workers doesn’t change the structure of employment. Employment equity is the new future that will offer any form of dignity and living wage to the large majority.

The assumption that we can shift people from agrarian to non-agrarian jobs is a historical fallacy. It had been achieved through the engine of exporting people by Britain, Germany and other countries in Europe at a huge exploitation cost. India does not have labour-intensive industry processes, but rather jobless growth. This strategy of pushing people out of agriculture is partly a reason why farmers protest. This is not just an Indian phenomenon, but also a global phenomenon of corporatization and industrialization of agriculture.

So, on the one hand, we are pushing people away from agriculture and on the other hand, there is a huge labour reserve constituted disproportionately by women and people with oppressed history. Therefore, we must not only rely on the path of MGNREGA and wage labour as a strategy to achieve equity, let alone egalitarianism. Land and agrarian reforms are the fundamentals and need to be the central pillar. Sandeep concluded his speech by highlighting the need for worker control over enterprises in order to pursue any strategy which offers a possibility of a dignified future to people.

Way Forward

Finally, all the panellists presented their concluding remarks and reiterated the need for an urban employment program. The minimum wage needs to be revised and MGNREGA must pay at least the minimum wage. We must demand an increase in the number of days of employment and vigilant social auditing at all MGNREGA worksites.

Acknowledgement: Arunima Marwaha is a Research Intern at IMPRI

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