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Link Between NREGA Spend & Employment?

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Not all states in India are equal consumers of funds released by the Government under the guaranteed job scheme – the Mahatma National Rural Guarantee Act (MNREGA). An analysis by Delhi-based think-tank Accountability Initiative shows that some states are surprisingly indifferent – if that’s the word – to Government dole. Or perhaps, the pickup of funds is inversely proportional to gainful employment, existing or potential.

 

The analysis for 2009-10 shows that states like Mizoram, Orissa and Andhra Pradesh spent over 90% of the total funds available to them. On the flip side, Maharashtra spent only 52% in that year. Madhya Pradesh was 67%, while Rajasthan was at 79%.

 

Moreover, within the states too, there are variations. In Orissa, which spent 94% of its funds, district expenditures vary from 57% to 140%. The variations in Andhra Pradesh are lower, where there was a difference of 40 percentage points between the highest and lowest spending districts.

 

Most of the funds go into specific activities. In 2009-10, water conservation and harvesting took up most of the budget at 24%. Irrigation works on land owned by scheduled castes and scheduled tribes (SC/ST) accounted for 17%. On the other hand, only 49% of sanctioned works were completed.

 

Allocation of Rs 40,000 cr Per Year

 

The MNREGA was launched in 2006 by the UPA Government. Average annual allocation for MNREGA is Rs 40,000 crore and accounts for 46% of the rural development budget. Importantly, MNREGA mandates a 60:40 ratio between wages and material costs.

 

In 2009-10, wages made up 70% of total expenditure while materials accounted for 27%. Interestingly, administrative costs were at 3%. Average wage paid per person per day of employment has risen from Rs 64 in 2006-07 to Rs 91 in 2009-10. Of the total funds spent on MNREGA, the Central Government contributes around 90% while the states contribute the rest. Almost 50% of the work done is executed by the Gram Panchayats.

 

While the statistics do not provide a direct answer to the question posed at the start, they do provide substantial input on assessing the efficacy of rural spends through such schemes.

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