Is the ‘highest ever MGNREGA allocation’ the biggest sham of #UnionBudget2017?

While we have accepted that flip-flops and ludicrous claims are the norm under the BJP-ruled central government, the resistance of fact-finding and disclaiming the much-hyped declarations keep many in the media, academic and civil rights circuit busy. One such debunking of a claim made by Union finance minister Arun Jaitley happened shortly after he concluded his Budget speech, wherein he had said that at Rs 48,000 crore, this was the “highest-ever allocation” for MGNREGA.

Now let’s aside the fact that it was only yesterday that Prime Minister Narendra Modi had debunked MGNREGA as a “living monument” of the Congress-led UPA regime’s failures. Not only PM Modi, but a whole ecosystem of commentators thrive debunking MGNREGA, passed in February 2006, as well as the Food Security Act, and the Land Acquisition Act passed in early 2014, as Congress’ pseudo-populism, a relic of India Gandhi’s influence on the party, now perpetuated by the Gandhi family members – Sonia and Rahul.

No, let’s just keep strictly to figures.

“In spite of the consequential reduced fiscal space for the Centre, the government has decided to continue supporting important national priorities such as agriculture, education, health, MGNREGA, and rural infrastructure, including roads,” FM Jaitley said in his #UnionBudget2017 speech, adding that the Modi government was “committed to supporting employment through MGNREGA”.

But a closer scrutiny of the budgetary allocations yields a different picture.

Firstly, the breakup of the Rs 48,000 crore grand total is actually an initial allocation of Rs 34,699 crore, with a later input of a possible Rs 5,000 crore or above if there’s enough revenue available with the government (“tax buoyancy”, in Jaitley parlance).

Secondly, in a response by the People’s Action for Employment Guarantee (PAEG) we get more clarity on what actually is transpiring in the MGNREGS. Given that in 2016-17 Budget, the initial MGNREGA allocation was at Rs 38,500 crore, while the supplementary allocations raised it to Rs 47,500 crore, this would mean that actual increase isn’t the massive 25 per cent, as FM Jaitley would like us to believe, but a meagre 1 per cent, or by Rs 500 crore.

According to PAEG statement:

“Regardless of the budget allocation, what needs to be understood is that for the MGNREGA to work as per the legislation, it needs to have adequate resources to be made available for work to be provided on demand. As of today, 22 out of 34 states have negative balances. As per the ministry’s own data a total of Rs 3,469 crores in pending liabilities have already piled up, even as they have spent 93 per cent of the funds available for this financial year. This is likely to dramatically go up over the next two months, as traditionally demand for work has peaked during this season.

The Supreme Court has issued a series of strong orders in the ongoing Swaraj Abhiyan Public Interest Litigation, one of which stated, “the Government of India is directed to release to the State Governments adequate funds under the Scheme in a timely manner so that the ‘workforce’ is paid its wages well in time. The Government of India must shape up in this regard.”

Despite this, as per the Ministry’s mechanism of preparing indicative labour budgets, even to honour only the approved budget for the months of February 2017 and March 2017, nearly Rs 10,013 crores would be required (at the average cost per person day of Rs 228). This means that we would end the year with close to Rs 13,482 crores in pending liabilities, and a budgetary allocation that has not even kept pace with last year’s amount in real terms.

This unpredictable under resourced fund flow mechanism has implications for implementation, particularly timely payment to workers, which greatly affects faith in the employment guarantee. The Supreme Court order emphatically stated that delayed wages were unacceptable and a violation of the rights of workers. Yet this continues with impunity. At present 54% of the wage payments continue to be delayed, and as a result Rs 231 crores of compensation to workers also remains due.”

As said in the statement, it was only after the PIL filed by Swaraj Abhiyan – the civil rights organisation launched by eminent lawyer Prashant Bhushan and psephologist Yogendra Yadav – that the Supreme Court, in May 2016, asked the government to release MGNREGA funds to drought-affected farmers, lashing out at the under-utilisation of allocated funds. In fact, the state-based requirement of MGNREGA funds is actually much higher, because not only of demonetisation, which has significantly impacted the agricultural sector, but also because of the terrible drought that affected vast swathes of south and west India.

Additionally, as it has been reported, the central government has taken the WhatsApp route to discourage creation of jobs related to MGNREGA, dissuading farmers from the guaranteed 100-day wage labour in villages. Which means that substantial discrepancy exists in what gets allocated and what gets really used in the MGNERGS, which in turn becomes a stick to beat this crucial welfare scheme with in the opinion pages and TV shows of the rightwing commentariat.

It is quite evident that FM Jaitley’s hyperbole on MGNREGA is just an exercise in waxing eloquent on a bitter reality.

Also read - Arun Jaitley’s #UnionBudget2017 does little to clean up political funding