Two articles, one by Prof Abhijit Banerjee titled “Mr Modi, we need to talk” in HT and
"Rural Guarantee Scheme chokes as funds dry up” in ToI are the latest in this series. I must forewarn that I will play the role of a devil’s advocate and will criticize all that’s going wrong presently in the scheme.
Abhijit then points out issues in MGNREGA in its present form such as panchayat specificity, inter-state differences which depend on state’s access & ability to utilize and not exactly proportionate to state’s backwardness, frauds (which he points out have come down in recent past), panchayat’s requirements versus State’s inability to match funds such as in Bihar, delay in realizing payments which may vary from few weeks to months and gaps in proper micro level targeting.
He has, as an alternative, proposed a universal cash transfer in the form of a minimum guaranteed income, based on a hypothetical program proposed by Rinku Murgai, Martin Ravallion and Dominique Van de Walle from the World Bank. This according to him would be better option than scaling down MGNREGA since it removes selection & location bias, will be universal and will be easy to implement.
Abhijit points out to a 20% gap in MGNREGA reporting and how it’s an improvement over 50% in 2007-08. By its own admission, one-fifth of the total enrolments continue to be bogus and this is in the 8th or 9th year of the scheme! Converted into funding, this means an outgo of at least Rs 5000 Cr – Rs 15000 crores as leakages! Do we need a scheme in its present form which implies such a colossal waste on its own account? This leakage would be at least double if one is to consider the payment made to those who get it without doing any work (bogus works with proper enrolment), mismanagement and administrative leakages. Who are we working for?