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LATEST NEWS UPDATES | Six reasons why the Economic Survey's presentation of MGNREGA is misleading -Rajendran Narayanan & Rakshita Swamy

Six reasons why the Economic Survey's presentation of MGNREGA is misleading -Rajendran Narayanan & Rakshita Swamy

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published Published on Jul 23, 2019   modified Modified on Jul 23, 2019
-The Hindu

The Economic Survey presents an unbalanced view of the technical interventions in MGNREGA

A chapter in the recent Economic Survey on the “transformational” impact of Aadhaar on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) merits scrutiny. It presents a skewed and unbalanced view of the programme’s technical interventions instead of taking a comprehensive view of the implementation. The Survey draws heavily from the Indian School of Business’s working paper titled “A Friend Indeed: Does The Use of Digital Identity Make Welfare Programs Truly Counter-Cyclical?”

A rebuttal of this working paper, published in November 2018, highlighted glaring flaws on three counts — factual, methodological and conceptual. Yet the paper has been uncritically accepted and widely cited in the Survey. This raises questions about the credibility of the Chief Economic Adviser’s (an affiliate of the ISB) office. Here are six reasons why the Economic Survey’s presentation of the MGNREGA is misleading.

Aadhaar has to be understood as merely being a pipeline for funds transfer in the MGNREGA. A lack of adequate financial allocation, pending liabilities and low wages have dogged the programme over the past eight years. About 20% of the Budget allocation in each of the last five years is of pending wage liabilities from previous years. It was worst in 2016-17, when pending liabilities were 35% (Rs.13,220 crore) out of a total allocation of Rs.38,500 crore. MGNREGA wages in many States are about 40% lower than the Ministry of Labour’s national minimum wage. Instead of sufficiently funding MGNREGA, a legal right, in times of severe drought, there is disproportionate attention by the government towards creating a complex architecture based on technical solutions.

Technological inputs

Second, the Economic Survey misrepresents the continuous technological interventions in the MGNREGA since its inception. Electronic funds transfer started as far back as in 2011 through the Electronic Fund Management System (eFMS), and became symbolic of the Direct Benefit Transfers (DBT). This served as the basis for the National Electronic Fund Management System (N-eFMS), introduced, in 2016. The Survey uses the term “ALP” for Aadhaar-linked payments and conflates it with the DBT by repeatedly referring to the time before 2015 as “pre-DBT” to make its claims. The conflation of terms prevents one from making an honest assessment on the effect that different interventions have had.

Third, the Survey makes strong assertions that timely payment of wages have positively impacted worker participation. To support this, the Survey makes dubious causal claims on reduction in payment delays due to the introduction of Aadhaar. However, their understanding of payment delays is faulty.

Wage payments to MGNREGA workers happen in two stages. The first is the time taken by the blocks to generate the electronic Funds Transfer Orders (FTO) and send it digitally to the Central government. The second is the time taken by the Central government to process these FTOs and transfer wages to workers’ accounts. While it is true that delays in the first stage have reduced, those in the second stage continue to be unacceptably high. Only about 30% of the payments are credited on time; the Central government takes more than than 50 days (which is the second stage) to transfer wages to workers.

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The Hindu, 23 July, 2019, https://www.thehindu.com/opinion/op-ed/a-misleading-presentation-of-a-labour-programme/article28660814.ece?homepage=true


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