Centre’s off-the-record instructions through WhatsApp and a squeeze on funds brought the rural work programme to collapse after a roaring first half of the year.
Read the first part: Govt curtailed work under MGNREGA through WhatsApp chats
The WhatsApp messages from the Union rural development ministry to states had a chilling effect on the work given under the Mahatma Gandhi National Rural Employment Guarantee Act after the roaring demand growth in the first few months. The states took the instructions and signals sent in August seriously and reduced work for future, as arrears piled up.
The Union government prepares a labour budget -- the persondays of labour work it estimates to be generated through the financial year -- at the beginning of the year. It is done in consultation with the states, but the Union government has the final say.
The labour budget helps estimate the budgetary support required for the scheme in a particular year. But, legally, this is supposed to be only an estimate and the Centre is required to provide additional funds, if demand for work exceeds projections -- as is always likely to happen in a drought year. This year, the government approved a labour budget of 2.17 billion persondays -- 980 million persondays less than what the states had asked for. It told states not to exceed the limit set without prior approval.
But, aware that the country was facing a drought and after being criticised by the Supreme Court for not providing funds, in the early part of the year, the Centre encouraged states to register demand from the poor and assured them of funding support. When it became evident that the drought was widespread, it also announced an extra 50 days of work in drought-hit districts, above the legally guaranteed provision of 100 days of work.
As states took up the registration of demand in right earnest, the work provided to the rural poor surged, exceeding the central government projections and approved labour budget for April-July by a whopping 277.94 million persondays. By July, the rural development ministry had consumed 76 per cent of its original budgetary allocation of Rs 38,500 crore.
Out of this, Rs 12,580 crore had gone towards paying the previous year’s arrears the Centre owed to the states. It sought an additional Rs 15,000 crore from the finance ministry but got only a third of it in August. But, the rural development ministry’s changed tone in August, conveyed through the off-the-record WhatsApp group, had an immediate impact. In July, states had generated 30.5 million persondays of work above what had been planned. In August, the work given was 7.47 million days more than what was planned. But, by September, the trend reversed dramatically. The work provided was 54.8 million days less than what had been planned to be given to the people in rural India.
The rural development ministry explains this dip as part of the usual trend when the monsoon is normal in the country. It said, “A total of Rs 35,793.40 crore, against the total revised allocation of Rs 43,499 crore under MGNREGA, has been provided so far. This comes to 82.29 per cent of the revised Budget Estimate for MGNREGA in the current financial year. This level of release is unprecedented and has been resorted to, given the high demand for work in the drought-distressed months of April, May and June. On account of a good monsoon in most parts of the country, the demand for work has come down in subsequent months. There is a complete commitment of the ministry to honour the demand for work.”
This is partly true. The demand does ebb in a normal monsoon period, data show. But, the ministry had planned ahead of time for this dip. Its approved labour budgets for work to be given in each month after May were less than the previous month’s.
In July, it planned to give 67.40 million less persondays than in June. For August, the work to be given had been pared back by yet another 27.03 million days, compared to July; and in September, by 2.5 million more days below the work given in August. Yet, the actual work given was much less, compared to even this lowered projection.
In no other previous year for which the data is available in the public domain has work demand crashed so rapidly in August or September, compared to the previous months.
The ministry said: “From the total allocation made to the ministry, we still have resources available to release to states on demand. A demand for an additional Rs 10,000 crore has been projected at the second supplementary stage by the ministry of rural development.”
So far, the government has spent Rs 35,793 crore, but it owes the states yet another Rs 5,600 crore for work already done so far. The sudden dip in work could now help the government keep a budgetary leash on the programme.
But, the ministry states, “There is no dearth of funds at present. Depending on the demand for work, appropriate demand for funds would be made as and when required. This is in line with the demand-driven work provision under MGNREGA.”
Business Standard spoke to several state MGNREGA commissioners, who were on the WhatsApp group. All of them preferred to speak off-the-record.
“The problem is not with running a WhatsApp group. It is what is transmitted through it,” one said. “The group is a good idea to share experiences faster. It could have been easily made part of the official communication and put on record. What was happening on the group was disturbing. If this group chat was on official records, you wouldn’t have seen such conversations.”
He said, “They should have known what funds they would actually get from the finance ministry. They did not imagine how much demand for work would be generated, following their initial exhortation to everyone not to worry about funds,” he added.
“It is not as if this is happening for the first time. There is an inherent contradiction and conflict between what the law requires and how the budgetary provisioning system works. The law requires a bottoms-up approach and budgetary support is driven by other fiscal considerations as well,” said another state MGNREGA commissioner.
Data also show that in all previous years, of which data is available publicly, the actual work provided has always been less than what was approved by the Union government as labour budget at the beginning of the year.
Recently, the rural development ministry amended its master circular and decided that the first tranche of funds to be given to states in April will now also be dependent on the provisions of the vote on account.
Image: Labourers work at the construction site of a flyover at Noida in Uttar Pradesh. Photograph: Parivartan Sharma/Reuters.