Context
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was established to provide a safety net for rural households by guaranteeing a minimum of 100 days of wage employment in a financial year. However, the recent disbursement figures for unemployment allowance under this scheme have raised serious concerns. In the financial year 2023-24, only ₹90,000 was released as unemployment allowance across various states, a stark decline from ₹7.8 lakh in the previous year. This situation highlights significant issues in the implementation of the scheme and the accountability of state governments.
Overview of MGNREGS and Unemployment Allowance
- Objectives of MGNREGS: MGNREGS aims to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. The act also includes provisions for unemployment allowance, which serves as a financial safety net for workers who are not provided work within a stipulated time frame.
- Provisions for Unemployment Allowance: According to Section 7(1) of MGNREGA, if a person applies for employment under the scheme and is not employed within 15 days, they are entitled to a daily unemployment allowance. This allowance is set at one-fourth of the wage rate for the first 30 days of the financial year and half of the wage rate for the remainder of the year. Despite this provision, the actual disbursement of unemployment allowance has been alarmingly low.
Analysis of the Current Disbursal Figures
- Disbursement Trends: The figures for the financial year 2023-24 show a dramatic drop in the disbursement of unemployment allowance. The total amount released ₹90,000 is not only a fraction of what was disbursed in the previous year but also raises questions about the fulfillment of work demand and the overall effectiveness of the MGNREGA scheme. The Economic Survey 2024, tabled in Parliament, emphasized that these figures do not accurately reflect the unmet work demand, indicating a significant disconnect between reported data and the actual situation on the ground.
- Reporting Flaws: One of the critical issues identified in the Economic Survey is the flawed reporting system within MGNREGA. Work demand is only recorded when employment is provided, which can lead to underreporting of the actual demand for work. This practice appears to be a strategy to minimize state governments’ liabilities concerning unemployment allowance, further complicating the situation.
State-wise Disbursal of Unemployment Allowance
- Limited Participation: In the fiscal years 2022-23 and 2023-24, only six states disbursed unemployment allowances. This is a stark contrast to the expectations set by the MGNREGA framework. In previous years, the numbers were equally disheartening, with only three states disbursing the allowance in 2021-22 and four in 2020-21. In 2019-20, no state paid any unemployment allowance at all.
- Eligibility vs. Actual Disbursement: According to a report by the Parliamentary Standing Committee on Rural Development, thousands of workers have been identified as eligible for unemployment allowance, yet the actual disbursement remains negligible. For instance, Karnataka had the highest number of eligible workers over the last five years, but not a single one received the allowance. This trend is echoed in several other states, indicating systemic issues in the implementation of the scheme.
Reasons Behind Low Disbursal
- Administrative Challenges: The low disbursal of unemployment allowance can be attributed to several administrative challenges. One major issue is that MGNREGA job card holders often do not receive receipts that register their demand for work. This lack of documentation can prevent them from claiming their entitled allowances. The inefficiency of block-level administration is often cited as a contributing factor.
- Budget Constraints: State governments frequently face budgetary constraints that hinder their ability to fulfill their obligations under MGNREGA. The chronic under-budgeting by the central government exacerbates this issue, leaving states in a precarious position where they are unable to provide the necessary funds for unemployment allowances.
Recommendations for Improvement
- Need for Accountability: The Parliamentary Standing Committee has recommended that the central government engage with state governments at the highest levels to ensure they fulfill their statutory obligations regarding unemployment allowances. This engagement is crucial to holding states accountable and ensuring that the rights of MGNREGA beneficiaries are upheld.
- Enhanced Reporting Mechanisms: Improving the reporting mechanisms within MGNREGA is essential. The system should allow for real-time tracking of work demand and employment provision to ensure that all eligible beneficiaries can claim their unemployment allowances without bureaucratic hurdles.
Conclusion
The disbursement of only ₹90,000 as unemployment allowance under MGNREGS in FY 2024 highlights significant systemic failures. These low figures indicate insufficient financial support for rural households and point to the need for reforms in administration and budget allocations. To improve MGNREGA’s effectiveness, both central and state governments should enhance accountability, reporting mechanisms, and funding to better support rural livelihoods.
Source: The Hindu
UPSC Mains Practice Question
Q. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) aims to provide livelihood security to rural households. However, the disbursement of unemployment allowances under the scheme has been alarmingly low, highlighting systemic issues. Discuss the challenges in the implementation of MGNREGS and suggest measures to improve its effectiveness.