Archive for October 19th, 2010

October 19, 2010

Myths about the MGNREGA

Myth 1: An increase in the minimum wage of MGNREGA will result in agricultural labourers leaving the farms they are currently employed in. The farmers will face higher costs of production because of a fall in the supply of labour. This will reflect in an eventual increase in food prices.

  • It is unconscionable that daily wage labourers are paid less because of structural problems in the agricultural sector, which has been long neglected by the government. The solution to these problems is to sort out the flaws in the government’s agriculture policy and not to pay daily wage labourers less than minimum wage.
  • The minimum wage has not shown to have any proven direct effect on food price inflation. In the past the country experienced high inflation in food prices even when the minimum wage was Rs 73 or Rs 100.
  • The intention of increasing the wages paid under the MGNREGA is to improve the bargaining power of both – the workers employed under the MGNREGA as well as the workers employed in non MGNREGA work places like farms, informal segments of the economy. An increase in the wages paid under the MGNREGA will serve as the needed push for employers to increase the wages paid to those employed under them.
  • An increase in the wages paid to MGNREGA workers will increase their purchasing power. They will then spend a higher proportion of their income on consumption. This will further stimulate the market economy.
  • Important to understand that MGNREGA workers are not only landless labourers. Small and marginal farmers who find themselves unemployed during the lean season, also seek employment under the MGNREGA.
  • Respectable minimum wage under the MGNREGA will reign in distress migration to urban and semi-urban areas. This will prevent an excess supply of labour in urban areas and will prevent any sudden fall in their incomes.


Myth 2: The Government does not have enough resources to pay a higher minimum wage under the MGNREGA

In one year the Rajasthan State Government has paid Rs 2600 crores to Government employees in the form of a bonus. The government employees in the state constitute only 1% of the total population. If a minimum wage of Rs 135 was instead paid to around the 70 lakh households under the MGNREGA, the total cost would be Rs 1500 crores. This shows that the lack of resources in not the causal problem. It is the biased preferences of the government. We argue that both, the govt employees and the workers under the MGNREGA contribute towards nation building. And both of them face the same food prices whilst reeling under inflation and, if anything, the workers are hit harder by the high food prices since their incomes are lower. The satyagraha questions why the government wished to only focus on their employees and seek ways to protect them from the effects of market fluctuations. This satyagrtaha in no way attacks government employees by viewing them as an isolated section of the workforce. It only uses their case as an example to demonstrate the govt’s lack of response to only the plight of the poorest sections of the population.


Myth 3: MGNREGA is primarily the Central Government’s responsibility. The State Government does not have too much authority in this matter, so there is no point in pressurizing it.

Panchayats have been identified as the key implementing agencies under the MGNREGA. Implementation and monitoring efforts are directly under the ambit of the State Government. More importantly, the Supreme Court orders clearly dictate the State Governments to enforce the payment of the minimum wage (whose formulation is in power of the State Government). Any payment under the minimum wage to workers is considered as forced labour, as held by the Supreme Court decision in Sanjit Roy v. State of Rajasthan (1983).


Myth 4: MGNREGA is an option seen as the last resort for the rural poor. The government administration still speaks of the MGNREGA as a welfare scheme.

  • The right to employment is a constitutional entitlement. Even the SC recognizes the importance of the right to employment to ensure the people’s right to food.
  • All previous schemes of the State like SGSY, JRY, and Famine Relief have been converged and brought under the ambit of the MGNREGA.
  • The MGNREGA should not be seen as a dole or a pure cash transfer. Unlike the case with Britain’s social security system where the state’s revenue is going into paying huge sums of money as unemployment benefits, in the case of the MGNREGA people are being compensated for their contribution to nation building through the work sites they are employed in. In a dole or cash transfer the beneficiary is a passive recipient of government charity, which is not the case under the MGNREGA. The MGNREGA empowers citizens politically, requires them to be actively involved deciding which works are to be undertaking under the scheme (in gram sabhas), be vigilant about the implementation of the scheme (through social audits) and promotes a culture of transparency (by mandating proactive disclosure of records). The MGNREGA is not a dole and goes far beyond being a mere cash transfer. It is in fact a working example of a critique of passive cash transfers, which only encourage the beneficiaries to look at the government as a saviour or mai-baap. The MGNREGA encourage citizens to participate in governance and puts them on a far more equal footing viz-a-viz the government, thereby further enabling democracy.
October 19, 2010

Press Note – 18th October 2010

18th October 2010

Hindi Press Note

Letter to The Secretary, Ministry of Rural Development, Government of India from the Principal Secretary, Rural Development & Panchayati Raj Department, Government of Rajasthan

October 19, 2010

Press Note – 19th October 2010

19th October 2010

Hindi Press Note

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