In a stunning revelation, Amarjeet Sinha, secretary, ministry for rural development (MoRD) has revealed that the government has cancelled nearly 10 million fake ‘job cards’ under the Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA]. Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million.
Under MGNREGA – a flagship welfare scheme launched by the erstwhile UPA dispensation in 2005 – ‘guaranteed’ employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid @ Rs 100 per day. For this purpose, one job card is given to each family. A card holder is expected to work on projects such as irrigation, road construction, building houses, digging tube wells, constructing toilets etc. The scheme is one of the world’s biggest job guarantee programs.
In the initial years, an audit of the scheme had revealed large-scale irregularities in several states viz., money not reaching the intended beneficiaries, fictitious payments/issuing job cards in non-existent names and the same person holding multiple cards etc. Immediately on taking charge, Modi – government directed MoRD to conduct a rigorous scrutiny of the scheme.
The ministry initiated an exercise to clean up the system and ensure transparency and accountability in its implementation.
It conducted a house-to-house survey to check the authenticity of the workers by focusing on factors such as Aadhaar numbers, photos of beneficiaries, details of payments, migration and death of job seekers etc. The identification and cancellation of fake cards is an outcome of this process.
The revelations vindicate the charge made by Modi while replying to debate on President’s address in 2014 when he described scheme as an epitome of corruption. The number of bogus beneficiaries 31 million is about 15% of active household engaged in the scheme. During 2016-17, the total expenditure under MGNREGA was over about Rs 58,000 crores. @15% fictitious payments or in plain words, the funds siphoned off would be about Rs 9000 crores.
During the last 12 years of operation of the scheme, an aggregate of about Rs 400,000 crores has been spent till 2016. Even taking a most conservative estimate of leakage @15%, the money misappropriated by corrupt politicians and bureaucrats would add up to Rs 60,000 crores. On the other hand, if one were to go by what former PM Rajiv Gandhi used to say “only 15% of money under welfare schemes reaches intended beneficiaries”, the quantum of loot would be a mindboggling Rs 340,000 crores.
Apart from leakage/misappropriation, even where the money was paid to genuine persons, the scheme was not leading to creation of productive assets. In fact, its very architecture militated against productive deployment of funds. Thus, even if the government has no project at hand, a person holding job card still has to be paid [embedded in the Act, this is a constitutional obligation]. This creates an inherent incentive for card holder not to work. When, he is assured of payment without working, why would he crave for work?
Even political establishment of the day which put premium on nepotism and corruption had no interest in undertaking projects. The bias against asset creation is also reinforced by the fact under UPA – dispensation, the wage to materials ratio was kept at 60:40. This meant that out of Rs 100 allocation, the administration could spend Rs 60 on wages and Rs 40 on materials. However, in actual implementation, wage component was even higher at 75% in several states.
The subsisting dispensation was also causing a collateral damage. Assured payments under MGNREGA [work or no work] created scarcity of labor in occupations such as agriculture and other allied operations viz. for sowing, crop cutting, animal breeding etc. In this scenario, agriculturalists were forced to shell out higher wages for hired labor. The wage induced escalation in cost of cultivation can be linked in no small measure, to the scheme.
The present government resurrected the scheme but vowed to rid it off the above maladies. To prevent misuse, it has shifted to an electronic muster roll of beneficiaries [as against manual records under previous dispensation] and latched on to an aadhaar-based payment system to ensure that money is transferred to genuine beneficiaries only and in full. It has also alluded to updating the master-roll by conducting surveys regularly. The idea is to keep the scheme free from bogus elements for all time.
Second, in sync with Modi’s philosophy and approach towards development, the government has amended the architecture of the scheme to make it an instrument of ‘not just providing a source of income but to inter-twine this with creation of permanent assets in rural areas and agriculture’. This thrust was reflected in the very first budget for 2014-15 which laid down targets such as number of ponds to be dug or toilets to be built etc under it. The process was carried forward in subsequent budgets.
To achieve the desired results, it altered the wage to material ratio to 51:49. In other words, out of Rs 100 allocation, Rs 51 are to be spent on wages and Rs 49 on materials. This helps in providing more funds for investment in agriculture machinery and farm implements.
Third, the government is focused on undertaking work in less developed states/backward areas with low per capita income. This is to promote balanced regional development, a theme that resonated in umpteen number of Modi’s election speeches. Citing poor development record of east and north-east states, he had lamented that ‘India cannot emerge economically strong as long as its one arm remains weak’.
In short, Modi has pressed all the right buttons to ensure that the scheme becomes an instrument of promoting its inclusive development agenda. However, he must continue to harp on states to come up with concrete projects on ground for gainful employment of rural poor and avoid turning in to a pit of wasteful expenditure.