Strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN.
What is the PM-KISAN scheme?
The government recently announced a cash transfer scheme called Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
According to the scheme, vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
The Ministry of Agriculture has written to State governments to prepare a database of all eligible beneficiaries along with their Aadhaar numbers, and update land records “expeditiously”.
The letter further states that changes in land records after February 1, 2019 shall not be considered for this scheme.
Thus, the success of the PM-KISAN depends on reliable digital land records and reliable rural banking infrastructure.
However, comparing with the MGNREGA scheme, the PM-KISAN scheme is less likely to address farmer distress in the country.
What does the comparison show?
Wage rate - A month of MGNREGA earnings for a household is more than a year’s income support through PM-KISAN anywhere in the country.
For example, if two members of a household in Jharkhand work under MGNREGA (picture) for 30 days, they would earn Rs. 10,080 and a household of two in Haryana would earn Rs. 16,860 in 30 days.
These are lower than what the direct income support under PM-KISAN scheme could offer. (Rs.6000 per year)
Coverage - PM-KISAN is a targeted cash transfer programme and MGNREGA is a universal programme.
Any rural household willing to do manual work is eligible under the Act.
According to the 2011 Socio-Economic and Caste Census, around 40% of rural households are landless and depend on manual labour.
The landless can earn through the MGNREGA but are not eligible for the PM-KISAN scheme.
Further, it is unclear how tenant farmers, those without titles, and women farmers would be within the ambit of the scheme.
Targeting issues - There is also substantial evidence to demonstrate that universal schemes are less prone to corruption than targeted schemes.
In targeted programmes, it is very common to have errors of exclusion, i.e., genuine beneficiaries get left out.
Such errors go unrecorded and people continue to be left out.
Payment delay - Funds will be electronically transferred to the beneficiary’s bank account by the centre through State Notional Account on a pattern similar to MGNREGS, under PM-KISAN scheme.
However, lessons from the MGNREGA implementation shows that the Centre has frequently tinkered with the wage payments system in the MGNREGA.
Though timely generation of pay-orders have improved, less than a third of the payments were made on time.
Implementation - Repeated changes in processes result in a hurried bureaucratic reorientation on the ground, and much chaos among workers and field functionaries.
For example, during Aadhaar – MGNREGA linkage, several MGNREGA payments have been rejected, diverted, or frozen due to technical errors such as incorrect account numbers or faulty Aadhaar mapping.
There have been no clear national guidelines to rectify these.
In a recently concluded survey on common service centres in Jharkhand for Aadhaar-based payments, it was found that 42% of the biometric authentications failed in the first attempt, compelling them to come later.
What should be done?
On the other hand, the MGNREGA is neither an income support programme nor just an asset creation programme.
It is a labour programme meant to strengthen participatory democracy through community works.
It is a legislative mechanism to strengthen the constitutional principle of the right to life.
Also, the MGNREGA works have demonstrably strong multiplier effects are yet another reason to improve its implementation.
Along with that, work demand has been 33% more than the employment provided this year, which underscores the desperation to work among the people.
Despite all this, the MGNREGA wage rates in 18 States have been kept lower than the States’ minimum agricultural wage rates, which acts as a deterrent for the landless.
Thus, strengthening an existing universal programme such as the MGNREGA would have been a prudent move instead of introducing targeted cash transfer programme.
