The Telegraph
Thursday , May 22 , 2014
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Advice to cut reach of job scheme

New Delhi, May 21: Officials are set to propose to the Narendra Modi government that the UPA’s blockbuster rural job scheme be restricted to select districts as the decision in 2008 to extend it to all districts was not required.

The officials of the rural development ministry are expected to tell the new minister that the funds allocated for the implementation of Mahatma Gandhi National Rural Employment Act (MGNREGA) were not adequate for national coverage, sources said. Around Rs 33,000 crore was allocated for the scheme in 2013-14.

The assessment and the proposal will revive an issue that was debated hotly in the run-up to the elections: whether the government should focus on creating assets or redistributing income.

While the job scheme was widely credited with earning rich political dividends for the UPA, questions were raised about its impact on the economy. But supporters of the scheme have pointed out that it has stemmed distress migration and increased the agricultural wage rate in villages.

At a review by cabinet secretary Ajit Seth today, rural development secretary L.C. Goyal is learnt to have contended against the 2008 expansion of MGNREGA, the world’s largest job scheme guaranteeing up to 100 days of unskilled work in a year to every rural household.

A section of the officials in the ministry felt that the expansion of the scheme to all districts was allowed in haste, a source told The Telegraph.

The act was passed by Parliament in 2005, stipulating that the scheme be made universal within five years from September 2005. When it came into force on February 2, 2006, the act was implemented in 200 backward districts. Another 130 districts were added in 2007-08, and all the districts were covered in April 2008.

A review of the expansion — if the new government accepts the proposal — can be done only by amending the act. The ministry has not decided the districts where the scheme should be continued.

The scheme allows about 40 categories of labour-intensive projects that can be taken up to create durable assets. But charges have been levelled that resources and manpower were wasted sometimes in just digging ditches.

The BJP manifesto prefers linking the MGNREGA to agriculture. Keeping this in mind, the ministry will suggest that more projects related to land, water and trees be taken up.

The ministry has underlined the need for convergence between MGNREGA and schemes on irrigation, water recharging, watershed development, afforestation, horticulture, sericulture, soil conservation, animal husbandry and pasture development.

The ministry has touched upon the need for improving the quality of the assets by drawing up district-level prospective plans. Every district is supposed to list details of the work it would carry out under the job scheme every year.

While the act provides for 100 days of guaranteed employment to a household in a year, the average days of employment given has ranged between 43 and 54 per year in the past eight years.

The act allows six per cent of the allocated funds to be spent as administrative cost. The ministry is expected to suggest increasing it to 10 per cent. The scheme suffers from a number of irregularities like bogus beneficiaries, non-existent projects and denial of work.

As the scheme suffers because of delay in payment, the ministry will push for an electronic funds management system.