[Answered] NREGA is underperforming because its most basic design principles are not being properly followed. Discuss.

Introduction: Contextual introduction.

Body: Explain why NREGA is underperforming.

Conclusion: Write a way forward.

The government of India has been running the world’s largest employment guarantee program since 2005 under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It guarantees 100 days of work a year to every rural household with an aim to enhance the livelihood security of people.

Why NREGA is underperforming?

  • Regressive spending pattern: where poorer States spend less NREGA funds than better-off ones. As if on cue, a committee to suggest reforms has been constituted instead of listening to the long-standing demands of workers and their collectives.
  • Delays in wage payments: For instance, seven or more functionaries have to sign off before payment due to a worker can be approved (stage one of the wage payment cycle). This does not even include the series of delays from when the payment is approved till payment is made (stage two of the cycle). In contrast, the processing of loans from private banks is done in fewer steps.
  • Top down “reforms”: The majority of reforms have focused on centralisation such as the electronic fund management system, geo-tagging of assets and a national mobile monitoring system (NMMS). E.g. Almost 3,000 women NREGA workers in Bihar are protesting against the NMMS application after the app failed to capture their attendance.
  • Intermittent and unpredictable fund releases by the central government are one of the fundamental reasons why State governments are unable to ensure the full potential of NREGA. As of today, ₹18,191 crore in liabilities is due to 24 States. Poor performing States, on account of inadequate funds, typically discourage and often deny demand for work.
  • Instead of using expenditure and income poverty as the only markers, exclusion must be identified at the household level.

The government should provide greater funds for the proper implementation of the scheme. It currently provides 0.47% of GDP while the World Bank recommends 1.7 % for the optimal functioning of the program.

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