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Resource centre on India's rural distress
 
 

NREGA Administration By States Remains A Cause For Concern by Devika Banerji

The government’s flagship rural employment scheme is struggling to make an impact as the capacity building in the scheme has slowed down to a crawl. The overall fund utilisation in the Mahatma Gandhi National Rural Employment Gurantee Act, or MGNREGA, has plummeted to 60%.

Most states were unable to utilise even half of the funds slotted for administrative expenses, stalling administrative reforms that are expected to increase the efficiency of the scheme.

“Administrative costs are important because the money is used to improve the knowledge base of the scheme like technology, monitoring mechanisms, infrastructure, personnel capacity etc,” said an official at the rural development ministry. The states can use 6% of allocation under the scheme for administrative purposes, to build capacity for the kind of expenditure the scheme targets to ensure income support for the poor.

But the overall utilisation of funds for administrative costs under the scheme was 40.3 % in 2010-11.

Government officials say the drop in utilisation – down from 80 % in 2009-10 to 60% in 2010-11 — is due to the lower demand for work because of the good monsoon.
 
But the lower utilisation is baffling when the scheme lacks capacity to spend the . 40,100 crore the centre has set aside last year. “The scheme suffers through major human resource constraint especially at the level where money needs to be channelized,” a planning commission official said.

“The administrative set up is not developing as it should,” he said.

On the brighter side, there is improvement in the utilization numbers in comparison to 2009-10 when only 31 % of the funds for administrative expenses were used by the states.

“There has been some improvement this year as we focused on building capacity, however one cannot say the performance is up to the mark,” the official from the rural development ministry said.

For 2011-12, the ministry is going to ask states to show better utilisation in the category as a condition to release of funds. The states that have spent most towards improving administrative issues are Andhra Pradesh and West Bengal. Other states like Tripura, Andaman and Nicobar Islands, Goa have also spent around 70% of the funds, albeit the allocations were lower than other big states where the demand for work is concentrated.

The states that have failed to improve their performance are Bihar, Madhya Pradesh, Rajasthan and some northeastern states like Mizoram, Meghalaya and Manipur among others. The average rate of utilisation for other states is around 30 %.

People on the ground assert that it is not only about allocations, but extensive planning needs to be done to augment skilled administrative workforce. “In order to translate outlays into outcomes for MGNREGA, there needs to be a proper plan in place to improve the human resource situation. This exercise is not receiving requisite attention”, said Pramathesh Ambasta of Samaj Pragati Sahayog, which is associated with the implementation of the scheme. Bihar has made some initiatives in that direction and has established a Bihar Rural Development Society that has started an extensive recruitment and training programme.