NDA Government starves NREGA of funds for the second year in a row

The last financial year came to an end with 24 states facing a total of Rs 12,483 crore worth of pending payments in the National Rural Employment Guarantee Act (NREGA). The pending payments amount to over a quarter of the total expenditure incurred on the programme in these states in 2015-16. This situation has arisen due to insufficient transfer of funds from the central government to these states. The shortage of funds in these states – which include all the nine states reeling under drought – has led to millions of workers facing tremendous economic hardships due to long delays in wage payments. As per official calculations – which are a gross underestimation – 58 per cent of the total wages were not paid on time in 2015-16. Even when the workers do get paid, they will not get the compensation which is to be paid in cases of delays in wages.

The insufficiency of funds also makes a mockery of the central government’s decision to increase the guarantee of work to 150 days a household in 2015-16 in the drought-affected states. Again as per official records, only 7 per cent of the total rural households registered in NREGA in the drought affected states got work for more than 100 days.

Apart from starving the programme of funds, the government is also not fulfilling its promises and making false claims. The Finance Ministry released only Rs 2,000 crore of the additional Rs 5,000 crore it agreed to spend on NREGA if the expenditure on the programme exceeded the allocated budget of Rs 34,699 crore in 2015-16. While announcing an allocation of Rs 38,500 crore for MGNREGA for 2016-17, the Finance Minister claimed that “if it is spent, will be the highest ever expenditure on MGNREA”. But twice in the past the expenditure on the programme has exceeded the allocation for 2016-17; Rs 39,377 crore in 2010-11 and Rs 38,552 crore in 2013-14.

2015-16 was the second year in a row in which the NDA government capped expenditure on NREGA. By the end of 2014-15 also, nine states were left with pending wages worth Rs 1,203 crore which were made only after these states received funds for 2015-16. The same will happen this year as well; a whopping 30 per cent of the allocation for 2016-17 will be spent just in clearing pending payments from last year. With no commitment of providing additional resources if the expenditure on the programme exceeds Rs 38,500 crore in 2016-7, the under-funding of NREGA is likely to continue this year as well. These facts expose the hollowness of the central government’s claim of delivering a “pro-poor” budget for 2016-17.

The NREGA is also being undermined by the stagnation of its wages, which are revised by the central government every year. State-wide increase in NREGA wages for 2016-17 range between 0 to 11 per cent, compared with last year’s wages (it is interesting to note that the wage increase of all the eight North Eastern states is less than 4 per cent). In many states, the NREGA wage is even lower than the minimum agricultural wage, thus failing to provide adequate economic security to rural households. For example, the NREGA wage rate of Jharkhand is Rs 45 less than its minimum agricultural wage. The central government has provided no justification for the nominal and differential rates of increase across the country. As payment of wages are now linked with the quantum of work done by them, many workers are paid even less than the paltry NREGA wages; either due to their inability to do the stipulated amount of work or due to errors in the measurement of work done by them.

The NDA government is killing a programme whose decade-long achievements were recently hailed as a cause for “national pride and celebration” by the Union Minister of Rural Development. By failing to ensure timely work and payment and other entitlements to rural workers (such as unemployment allowance in case of non-availability of work, compensation for delayed wages, worksite facilities and timely redress of grievances), the central government is legally violating the employment guarantee act. It is contributing to the suffering of rural workers and forcing them to either migrate in distress or engage in exploitative employment.

The Right to Food Campaign demands the following:

  • Immediate payment of all pending NREGA payments.
  • Compensation for delayed payments to be paid automatically along with wages.
  • As stated in the Ministry of Rural Development’s Master Circular on NREGA, the 1st tranche of funds (half of the total person days agreed to in the labour budget) should be released in the month of April.
  • A separate allocation to be made for the additional 50 days of employment per household approved for drought-affected states.
  • Increase in the NREGA wage rate to a minimum of Rs 250, indexing the wage rate to inflation and transparency in wage revisions
  • Time-bound punishment to all persons violating any entitlement of the employment guarantee act through institutionalization of social audits and other grievance redress mechanisms.

We are,

Kavita Srivastava and Dipa Sinha,

Convenors, Steering Committee of Right to Food Campaign