On Moves to Scrap MGNREGA

Friday, July 4, 2014
The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
The Polit Bureau of the CPI(M) strongly protests against any move to scrap or weaken the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It is reported in the press that the Rajasthan Chief Minister has made a proposal to extinguish the legal guarantee under the Act and  convert it into a scheme.  A party which promised job creation during its election campaign is now suggesting the elimination of the only legal guarantee for creation of jobs, namely MGNREGA.  The last years of the UPA government had also seen MGNREGA become a hostage to fiscal considerations and funds were severely cut. 
The Polit Bureau demands strengthening of the Act, measures to ensure a minimum of hundred days work and to protect the rights of the intended beneficiaries by ensuring  implementation of all the clauses pertaining to wage payment, compensation for delayed payment and also  unemployment allowance and to make available funds to pay the arrears with immediate effect.
Given below is the Letter addressed to Shri Nitin Gadkari, Union Minister for Rural Development by CPI(M) Polit Bureau Member, Brinda Karat expressing serious concerns on the functioning of MNREGA and reports that the Rajasthan Government has sought the scrapping of the Act. 

        July 4, 2014

Dear Shri Nitin Gadkariji,

Namaskar. I would like to draw your attention to some serious problems concerning the functioning of MGNREGA and to request you to take appropriate measures to strengthen the Act and ensure that it does not become hostage to fiscal considerations.

In this context reports that the Chief Minister of Rajasthan, a BJP ruled State has asked for scrapping the Act and making it into a scheme is a matter of deep concern. It will  indeed be a cruel blow if, instead of fulfilling the promise of creation of jobs, your Government destroys the only legal guarantee for creation of jobs, namely the MGNREGA. I hope you will allay the deep apprehensions that will be created among the crores of rural poor who have benefitted from the Act and make clear your Government’s position on this issue.

This becomes all the more necessary since the changes proposed in the Schedule 1 of MGNREGA “in accordance with the priorities of the new Government” regrettably neglect the basic issues being faced by the men and women working on MGNREGA sites.

It is also unfortunate that the discussions and decisions of the recent meeting of the Programme Review Committee on June 5-6, after the formation of the newly elected Government, as made available on the Ministry’s website, have not adequately addressed these urgent concerns. On the contrary, the direction of the changes being suggested will further adversely affect workers rights.

Delayed Wage Payment: In 2013-2014, a shocking 60 per cent of the wages were not paid within the maximum of 15 days stipulated by the law. In monetary terms this means that around 16,000 crore rupees of wages were not paid to the workers in time. In social terms this means huge suffering for workers and their families dependent for their survival on a daily wage, in the absence of which they are forced into debt.

The extent of the delay in wage payment ranges from 21 days to six months and sometimes even more. In the fiscal year 2012- 2013, the unpaid wages of the MGNREGA workers added upto 4500 crore rupees. It is shameful that workers should be denied their earned wage in this manner. This critical issue requires the total attention and focus of the Government.


Compensatory Allowance: Linked to this is the legal entitlement of compensatory allowance for delayed payment. I deeply regret that the decisions of the PRC included unethical technical maneuvers to deprive workers of compensation through “virtual payment” of wages.

One of the listed reasons or rather excuses decided arbitrarily by the UPA Government  for rejecting compensatory allowance claim was lack of funds. The PRC should have rejected this self-serving clause since it is obvious that the worker cannot be held responsible if there is a lack of funds to pay wages in a Central Government sponsored programme mandated by law.

However the PRC decided that “provision has to be made in NREGA Soft to allow generation of FTOs (fund transfer order) even if there is no fund available in the banks/Pos. This will enable queuing of FTOs and stoppage of calculation of delay compensation.”

In other words, a fund transfer order, even without payment of wages into the workers account, is sufficient to stop calculation of payment of wages, since it can be shown that the order was made, even if the money was not given. This is unethical and violation of the worker’s right for compensation due to delayed payment of earnings. I request you to intervene to reverse this decision. I also request you to remove the grossly unjust reason of “lack of funds” being sufficient to reject compensation claims.

Unemployment Allowance: It is regrettable also that the issue of unemployment allowance has been neglected. If work on demand is not provided within 15 days the worker has to be given an unemployment allowance. In 2013-2014, payable unemployment allowance was 2923.80 crore rupees. But even by the end of the financial year, not a single rupee was paid to any worker anywhere in the country. In 2014-2015, the unemployment allowance payable is already 1371.96 crore rupees and again nothing has been paid.

I request you to take urgent action in this regard.

Linkage to Agriculture and Convergence:

The Ministry has noted “in accordance with the priorities of the new Government” certain changes are proposed in the guidelines. Schedule 1, is to be changed to ensure that “at least 60 per cent of the works to be taken up in a district in terms of cost shall be for the creation of productive assets linked to agriculture and allied activities through development of land, water

and trees.” It is puzzling as to why such a change is required. Already between 65 to 70 per cent of works under MGNREGA come under this category. In just the first six months of financial year 2013-2014 till December, over 78 per cent of the works were on water conservation, on individual land development, land development and rural connectivity. In fact experience at the grass root level shows that it is necessary to include more livelihood options into MGNREGA such as collection of fodder and fuel. I request you to look at these options.

The decision to change the level at which to aggregate labour-material ratio from the block to the district level is also questionable. It could lead to accentuation of inequality within districts in durable asset creation.

I also request you to ensure that in the name of convergence of programmes, the total number of workdays, which may otherwise be available should not be reduced. In this connection, there is every possibility that if apart from the 100 days work, work is available through other projects of line departments which are not included in the MGNREGA works, then there would be additional avenues for work for the rural poor. I would also request you to ensure that the rules of minimum wage and other allowances and protections under MGNREGA including prohibition of contractors should be mandatory for any converged works with line departments.

I hope you will give serious consideration to these issues.

With regards,

Yours sincerely

(Brinda Karat)

Shri Nitin Gadkari
Union Minister for Rural Development
Government of India
New Delhi