Few takers for rural job scheme, says govt, SBI data differs

SBI data shows the per-capita payouts for scheme have shot up this year. 

There is something peculiar happening in the government's employment support programme for rural India.

Despite three back-to-back droughts, there are less people lining up for the entire 100 days of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) jobs in states hit by wayward rainfall.

This is contradicted by data from State Bank of India (SBI), which show the per-capita payouts for the programme has shot up this year.

According to the SBI data, in Madhya Pradesh, the average wage for those on government-run MGNREGA has risen by as much as 1,150 per cent.

In other rain-deficit states, the payouts have grown sharply. In Chhattisgarh, it is a jump of 47 per cent; for Uttar Pradesh, it is 32 per cent; while the figure is 12 per cent for Odisha. 

Put simply, those who are enrolling for MGNREGA are earning more in these states because they are working for a longer stretch of days, say the bank data.

Government data for the same period show despite the attraction, there are less people who have signed up for the full 100 days.

How does one reconcile the contradiction? In, Madhya Pradesh, monsoon rains have been short by 25 per cent this year.

The opportunities for work on the farms and elsewhere have shrunk. MGNREGA is a boon in these circumstances since it is demand-driven.

Therefore, if a worker is out of work elsewhere, he will sign up for more number of days under the scheme.

Of the payments made from MGNREGA accounts, there is a sharp rise in the average payouts for these workers.

This shows they are employed for a longer time with MGNREGA projects.

Between June and October this year, the per-head payout for MGNREGA from SBI counters has increased a whopping 1,150 per cent. 

However, the central government portal on MGNREGA shows only 18,650 people in the state have signed up for availing the 100-day job opportunity (as of November 2015), compared with 129,381 in the year-ago period. It is the same picture in nearby Chhattisgarh.

The rains have fallen short, and the average payouts as measured by SBI data have risen by 47 per cent, but the number of people who need such support has fallen by a third from 46,189 to 16,486 (April to November).

Odisha is also demonstrating a similar story. Despite its 20 per cent rain deficit, Maharashtra has hardly seen any rise in demand for government-supported work from last year.

One major state where the distress has brought out more people to work under MGNREGA is Uttar Pradesh.

With rains short by 45 per cent in the state, the expected per-head rise in MNREGA wages has been 32 per cent.

The number of people who have lined up for 100 days of work has doubled to 47,600 from 22,500 last year.

The difference in the perceived demand from the jump in payouts and the apparent reluctance of the poor to tap the opportunity indicates the affected states are underplaying the extent of rural distress. 

The overall trend of lower enrolment for high-cost MGNREGA workers in the worst-affected states also mean the Centre is unlikely to exceed the Budget it has inked in for the programme in this financial year.

The number is Rs 33,700 crore for FY16, (almost unchanged from FY15) and despite the alarming trend set forth in the SBI data, the final count will not be alarming for the finance minister.

Pronab Sen, chairman of National Statistical Commission, said he would have expected a higher aggregate number for the rural employment programme expenditure this year.

"It is a safety net against climatic shocks, the sort we have had this year. In a normal year, one would have spent about Rs 33,000 crore towards it, but in a bad year that sum can and should rise to Rs 40,000-50,000 crore."

One of the causes for the low expenditure under MNREGA is because the states themselves have set a slow pace this year.

Letters sent out to each state capital by the Department of Rural Development in New Delhi this week have rapped them on this score.

In Madhya Pradesh, against a targeted job creation of 104 million labour days, only 41 per cent has been generated till the end of November.

In Maharashtra, the rate of job creation is only 54 per cent till now.

However, SBI chief economist Soumya Kanti Ghosh feels meeting the fiscal numbers will still be tricky.

"With this trend, meeting the gross fiscal deficit target of 3.9 per cent of the GDP in FY16 could turn out to be a little more challenging than at present," he said.

In a policy note sent out this week, his team has noted "if the government were to hold on to its revised fiscal consolidation path to maintain credibility, it will have to increase its revenue by close to Rs 17,500 crore".