Before his tragic demise, the Union minister for rural development, Gopinath Munde, gave a clear indication of the new governments priorities on MGNREGA. Both these priorities are vital: using the programme for the creation of productive assets to combat drought and poverty and ensuring timely payment of wages. More than two decades of liberalisation and high economic growth have left India with enclaves of prosperity surrounded by vast hinterlands of deprivation which show poor human development indicators. So a thrust on social inclusion is much needed. And MGNREGA is a scheme to be justifiably proud of, despite all its shortcomings. With a total expenditure of Rs 2,53,560 crore since its inception, MGNREGA has created 1,698 crore person-days of employment half of this has gone to women and half to Scheduled Castes and Tribes. More than 10 crore bank accounts have been opened for wage disbursal, an unprecedented scale of financial inclusion. The difficulty, however, is that so long as people dont get paid on time, a huge question mark remains over the scheme, making it unattractive to wage-seekers and ineffective in stopping distress migration.
The ministers perspective allayed apprehensions of a fundamental re-engineering of MGNREGA to morph it into an unconditional cash transfer scheme. Cash transfers can put money in the hands of the poor but cannot create the assets that they need, which are ultimately the foundation of an inclusive growth process. While such transfers make sense for pensions and scholarships, they are no substitute for social sector provisioning. This is what the chief ministers of states such as Chhattisgarh and Madhya Pradesh have realised. These states are among the best examples of MGNREGA being used in convergent mode to generate sustainable rural livelihoods.
To put the growth versus inclusion debate to rest, let us look at some important facts. The Rural Labour Enquiry of the National Sample Survey confirms that a very high proportion (50 to 70 per cent, or even more if we focus on tribal areas) of agricultural labour households actually own land. If constraints on their productive capacities are eased by well-designed investments, such as the creation of water harvesting structures, land levelling and works to conserve soil and moisture, which maximise employment in the construction phase and create durable assets, they will contribute to growth. This should help us view the poor not as mere passive recipients of dole, but as potentially active participants in