Modi government should embrace NREGA without trying to defend the indefensible

The impact of the Modi government’s unilateral decision to impose a two-month-long nationwide lockdown has amplified the crisis faced by India’s 50-crore strong unorganised workforce. A potent option at present to cushion some of the blow is the National Rural Employment Guarantee Act.

The law, which was passed in 2005 by the Congress-led United Progressive Alliance government, guarantees 100 days of manual work annually to every rural family that demands it. In a recent article published in The Indian Express, Congress president Sonia Gandhi acknowledged the importance of the civil society in the enactment of NREGA. She also alluded to Prime Minister Narendra Modi’s derisive remarks on NREGA made on the floor of the parliament in 2015.

The Union Minister for Rural Development and Panchayati Raj Narendra Singh Tomar and the National Vice-President of the Bharatiya Janata Party Vinay Sahasrabuddhe wrote scathing responses to Gandhi’s article in the same newspaper.

In light of the exchange, some facts from a non-partisan perspective are in order.

Rising unemployment, falling incomes

Let’s look at the situation before the lockdown. Unemployment increased three times for rural men and doubled for rural women between 2012 and 2018 as per the Periodic Labour Force Survey done by the National Statistical Office.

As per the leaked Consumption Expenditure Survey, the average monthly consumption levels of the poorest 50% of the rural population decreased from Rs 1,138 in 2012 to Rs 1,082 in 2018. An analysis of the Consumption Expenditure Survey further shows that the entire cross-section of rural India became poorer in this period.

Any governing party must hold itself to high standards of transparency and accountability but the BJP-led government didn’t release the data on time. Delay in the release of data hampers economic planning. Numerous studies have shown the lockdown has worsened this crisis of unemployment and falling incomes.

Abdication during lockdown

Undoubtedly, NREGA implementation had glaring problems such as corruption, insufficient accountability norms and freezing of wages during the UPA phase. But that doesn’t absolve the systemic shocks to NREGA created since 2014.

Let’s start with the government’s role during lockdown.

On March 29, the Ministry of Home Affairs issued a directive that all employers must pay their employees during lockdown. April 2020 recorded the lowest NREGA person-days in the last six years. The government of India is the employer for NREGA and ideally the government should have paid all active NREGA workers the full wages in April. But that didn’t happen so the government stands in contravention of its own orders.

Let us now look at the systemic shocks of NREGA created by the BJP government.

Shrinking budget, delayed wages

First, a look at the budgetary allocation. We welcome the increased allocation of Rs 40,000 crore announced as part of the Atmanirbhar Bharat package in May, which takes the current year’s allocation for NREGA to Rs 1 lakh crore.

However, even before the Union Budget was presented – well before lockdown – NREGA activists had argued that any allocation less than Rs 1 lakh crore would be inadequate given the high rural distress. Indeed, the initial budget estimate for 2020-’21 was about Rs 9,500 crore less than the actual expenditure made in 2019-’20.

Setting aside the additional allocation as a response to the pandemic, adjusting for inflation, the allocation each year from 2014 has been lower than that of 2010-’11. As per World Bank estimates, the allocation must be around 1.7% of the Gross Domestic Product. Even the National Advisory Council during the UPA regime had recommended at least 1.4% of the GDP as the required allocation. But the allocation has been dwindling around 0.3% since 2014. It has never crossed the high of 0.6% touched in 2010. What is worse is that roughly one-sixth of each year’s allocation in the last seven years have been pending wage payments from previous years.

Second, since 2014, the labour budget of each state is arbitrarily curtailed by an “approved labour budget”. Union Budget allocations have subsequently been mapped to this truncated figure thereby making this a supply driven programme.

Third, the ruling party writers have once again made false claims of timely wage payments. As per the Act, wages must be paid within 15 days of completion of work. But an analysis of 90 lakh wage transactions, published as a research paper in the Indian Journal of Labour Economics, co-written by one of the authors of this article, found only 21% of payments were credited on time and the central government alone was taking more than 50 days to transfer wages.

Moreover, these delays remained deliberately unaccounted in the NREGA Management Information System thereby violating a key aspect of the Act. These findings were cited in the Supreme Court in the course of public interest litigation by the Swaraj Abhiyan from 2015 to 2018.

Fourth, the BJP leaders have made misleading claims on Aadhaar. Roughly one in twenty five payments have been getting rejected, many of which are due to Aadhaar-based payments. In 2019-’20, Rs 1,015 crore of labour wages were originally rejected of which Rs 345 crore are yet to be corrected. The official reason for many such rejections is ‘Inactive Aadhaar’. Let alone workers, many officials are unaware of how to rectify these technical errors, but it is the workers who pay the price. There are other issues such as misdirected payments where one person’s Aadhaar gets mapped to somebody else’s bank account that are harder to detect.

Fifth, the ruling party writers allude to increased number of work days in drought areas. These were not proactive pursuits. Based on the Supreme Court orders in Swaraj Abhiyan’s PIL, the Ministry of Rural Development had to issue directives to ensure increased allocation of works. Also, due to the court orders, the generation of invoices to pay workers has become quicker.

Sixth, the ruling party writers incorrectly claim that the 60:40 wage to material ratio is now maintained, implying that focus on labour is high. However, in reality, this ratio is being violated in many gram panchayats as it is still maintained at the district level.

Seventh, the ruling party writers have argued in favour of linking NREGA to programmes such as the Swachh Bharat Mission and the Pradhan Mantri Awas Yojana. While these schemes in themselves may be useful, integrating them with NREGA is not desired. NREGA is a demand-driven Act where contractors are prohibited, but SBM and PMAY are contractor-based and thus against the spirit of NREGA.

There has been a gradual shift towards prioritising individual benefit schemes over community assets in NREGA in the past few years. It is important to prioritise community works at the moment to strike a balance between individual benefit schemes and community assets. This is to ensure community monitoring through gram sabhas, which is an important aspect of the programme. Emphasising on individual benefit schemes reduces the scope of large scale labour engagement as well. This is even more critical in the post-lockdown scenario.

NREGA has undergone excessive centralisation through its complex technical architecture thereby diluting participation and accountability. For instance, the ruling party writers claim that the number of completed works has doubled since 2014. However, it is assumed that a work is completed if it is registered as complete on the NREGA Management Information System. In reality, there are thousands of works that remain incomplete but are entered as completed online, and there are many other instances when the Management Information System has been used to violate workers’ rights.

Gap to be bridged

Finally, an ongoing analysis of 20 states by Vipul Painkra and Ankita Aggarwal shows the wide gap between NREGA wages and minimum state agriculture wages. According to the analysis, on average the minimum agricultural wages of 20 states is Rs 85 more than the NREGA wages.

All these indicate that the BJP needs some critical self-reflection of its government’s economic performance instead of defending the indefensible. The crisis presents us an opportunity to strengthen workers’ rights by retaining the core principles of NREGA.

Given the crisis, each individual must be able to demand work at the work site and be given at least 200 days of work per year. Further, the wages may be fixed by respecting the idea of living wages as per the Supreme Court orders in the Workmen Vs Raptakoss Brett case. As per this verdict, financial provisions for old age, minimum recreation, children’s education and cost of medical care must be added to arrive at a moral “living wage”.

The government of Odisha has already shown us the way by increasing the NREGA workdays to 200 in 20 of their most vulnerable blocks wherein the state government had decided to pay for the additional 100 days from their exchequer. It has also increased the NREGA wage by Rs 91 from its own funds to match the minimum wages in Keonjhar district.

When Odisha, with its limited resources, can take progressive steps towards labour welfare, the ruling party could learn from it and avoid a political blame game. Instead, it could focus its attention on optimally using NREGA to help the poor – the time is ripe for an urban employment guarantee programme too.

Debmalya Nandy is a social worker and Rajendran Narayanan teaches at Azim Premji University.