After facing severe criticism at home and abroad for replacing the landmark employment-generation scheme Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G), the Centre issued a statement on behalf of the rural development ministry on Wednesday justifying the new scheme.
In the statement, Union minister of state (independent charge) for science and technology, earth sciences, and minister of state of PMO, personnel, public grievances, pensions, atomic energy and space Jitendra Singh defends VB- G RAM G, claiming it is based on evidence, rather than on apprehensions.
Demand-supply reset
MGNREGA was enacted in 2005, with the UPA government, backed by the Left, in power at the Centre. Regarded as the most important public employment generation schemes in the world by some, it provided any adult in rural India who wanted to work with a job in public works within 15 days, failing which the government would have to pay the individual an unemployment allowance. This was a legal guarantee. MGNREGA generated 2 billion person-days of work in a year for 50 million households.
MGNREGA was pioneering as an instrument of social justice, say the experts. Among the workers, over half were women, and about 40% were from Dalit and tribal communities.
The fulcrum was the principle of a job on demand. But VB-G RAM G changes that, a feature that has received the most criticism. It promises jobs depending on the need felt.
Economist Jean Dreze, the architect of MGNREGA, who has raised his voice to criticise the new scheme, has highlighted this aspect of VB-G RAM G.
“The government, instead of MGNREGA, has brought in a new scheme VB-G RAM G which will weaken the employment guarantee to those who want work,” Dreze had said recently at a workers’ protest to repeal MGNREGA in Muzaffarpur, Bihar.
Minister speak
Minister Singh tried to address some of the areas of concern. One of the core strengths of G-RAM-G lies in its convergent approach, bringing together various public works that were earlier implemented in silos, the release with his statements said. It aims to “prevent duplication of works, misuse of funds and short-lived assets, while prioritising long-term needs such as water security, rural infrastructure, and availability of farm labour”, the statement said. The minister added that guaranteed wage employment days have been increased from 100 to 125 days and the entire system has been digitised to ensure transparency.
“On financial discipline, the minister stated that G RAM G moves away from an open-ended, demand-driven allocation to a normative, state-wise allocation model based on objective parameters. Funding will follow a 60:40 Centre-State sharing pattern, with special provisions for North-Eastern states, Himalayan states, and Union Territories, as applicable,” the statement says. This is the problematic area, as pointed out by G RAM G’s critics.
Nobel laureate protests
VB-G RAM G also allows the Centre to control of the scheme, while making the states take on a far greater burden of finances, the critics feel. They include economist and Nobel laureate Joseph E. Stiglitz, who is a signatory to a letter written by the worlds’s leading economists, academics and activists asking for the reinstitution of MGNREGA.
The letter was issued by Levy Economics Institute of Bard College, New York.
“We urge a recommitment to this landmark legislation, which stands as the world’s most significant policy operationalizing a demand-driven, legal right to employment,” the letter says. “The early years of the Act coincided with unprecedented rural wage growth, and studies confirmed the program’s positive effects on economic output and efficiency, dispelling myths of unproductivity,” it continues.
Global experts doubt VB-G RAM G
MGNREGA had its share of problems: lack of funds, delay in payment and corruption. The global experts’ letter mentions this, but states: “The current shift to devolve the scheme to states and without commensurate fiscal support, now threatens its existence. States lack the central government’s financial capacity.”
It adds: “The new funding pattern creates a catastrophic Catch-22: states bear legal liability for providing employment, while central financing is withdrawn. Previously contributing only 25% of material costs, states now face burdens of 40% to 100% of total costs, ensuring poorer states will curb project approvals, directly stifling work demand.”
The letter talks about the changed “guarantee”: “This structural sabotage is compounded by discretionary “switch-off” powers, which allow the scheme to be suspended arbitrarily and render the guarantee meaningless.”
It mentions West Bengal: “The unexplained defunding of West Bengal in the last three years exemplifies this political misuse. The new framework institutionalizes this risk, imposing unfunded mandates on states without consultation.”