NEW DELHI: The Economic Survey tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha on Monday stated that the demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is not a real indicator of rural distress.
The report says that there is a marked variation in the performance of the MGNREGS across states. However, a state’s institutional capacity is crucial for effectively tapping MGNREGS funds.
“Multiple research studies have been conducted to find a definite cause for such unevenness in outcomes, but a satisfactory explanation has not been found. Some reports suggest that MGNREGS demand is indicative of rural distress. If this is indeed the case, then data trends should show that states with more poverty and higher unemployment rates use more scheme funds and generate more employment per-day,” it said.
Additionally, there might be a correlation between MGNREGS fund usage and reduced unemployment, it said.
“Additionally, calculations reveal that there is little correlation between MGNREGS fund usage and rural unemployment rates,” it noted. “It is evident from the data that MGNREGS work demand does not directly correlate with increased rural distress at a micro level,” it said.
The Survey said, “States with lower per-capita incomes and higher poverty levels often have weaker institutions, thereby tapping fewer funds per work executed and generating less employment per capita for the rural poor.”
It points out that in FY24, Tamil Nadu, which has less than 1% of the country’s poor population, accounted for nearly 15% of all MGNREGS funds released. Similarly, Kerala, with only 0.1% of the poor population, used almost 4% of the nation’s MGNREGS funds. These two states together generated 51 crore person-days of employment. In contrast, Bihar and UP, with about 45% (20% and 25% respectively) of the poor population, accounted for only 17% (6% and 11% respectively) of MGNREGA funds and generated 53 crore person-days of employment.
However, Nikhil Dey of NREGA Sangharsh Morcha told this paper that the Economic Survey shows that the states that have better administration can also make use of MGNREGS in a better way. “Bihar and Uttar Pradesh accounted for only 17% because they are states with poor administrative deliveries. It doesn’t show that there is no rural distress,” he said.
States need better admin
Nikhil Dey of NREGA Sangharsh Morcha told this paper that the Economic Survey shows that the states that have better admin can also make use of MGNREGS in a better way. “Bihar and Uttar Pradesh accounted for only 17% because they are states with poor delivery mechanism,” he said.