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MGNREGA as Challenging Power Structures

At the heart of the People’s Action of Employment Guarantee, which advocated for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was the question of the agency of citizens. It proposed a radical change in the way the State would interact with its poorest citizens – by providing them employment and being held accountable for its lapses. This articulation came not from one place or one organisation but was a popular demand from the unorganized workers unhappy with the inadequacy of existing employment schemes. The existing schemes for rural works were languishing to the point of irrelevance, being neither universal nor transparent in their functioning. With the MGNREGA, three things were secured in one go. The first was the guarantee of the dignity of citizens, their agency as workers employed by the State. The second was the architecture to ensure adequate budgetary resources for the programme; in as much as the law was designed to have resources allocated according to citizen’s demand for public works. The third was the rewiring of the administrative practices to incorporate transparency in the wake of the RTI, which preceded it in the structure of mandatory disclosures and public verification. These “social audits”, a process wherein citizens periodically examine official records with beneficiaries themselves has been a seminal contribution to ensuring accountable governance.

With the vantage of hindsight of over ten years of the MGNREGA, one can say with reasonable certainty that it has been enormously empowering for millions of families, particularly women. Citizens now have an avenue to demand work and pull resources into their locality and for their livelihood. Social audits and public hearings empower them to ask questions on implementation and hold officials responsible for misappropriations.

Popular Opposition to Cash Transfers

The idea of substituting social welfare entitlements to cash transfers into bank accounts has been in the discourse and in policy for a decade. In India, the Right to Food Campaign has consistently opposed the substitution of food grains with cash. Its critique is built on the basis of reduced citizens agency, which a right to food provides, specifically through subsidized food grains. The opposition arises from a desire to protect citizens vulnerable to hunger from the vagaries of the market economy. The enormous value of subsidized food grains through the Public Distribution System has been apparent through a series of appalling starvation deaths in Jharkhand alone, over the past eight months. When excluded from their legal entitlements with difficulty in bio-metric verification through Aadhaar, children and the elderly, particularly widows have died due to hunger, in the absence of monthly food security. This makes it apparent that millions of people depend on the National Food Security Act (NFSA) for their survival. Using it as a testing ground for ill designed and executed technological fixes is leading literally to the death of some of our most marginalized and vulnerable citizens.

Over the last few years, several states have piloted the substitution of food grains with cash as per the Cash Transfer of Food Subsidy Rules, 2015, to varying degrees of success, and more likely failure. The most recent is the popular opposition to the Direct Benefit Transfer in Nagri Block of Jharkhand. People opposed their food grains being replaced with money deposited into bank accounts and have demanded a return to the earlier system. The preference for the earlier system has also been established through an independent social audit corroborating their resistance. Finally, this month, orders have been passed to conclusively roll back the pilot. This is a big victory for the use of democratic means of protest by ordinary citizens against the powerful machinery of the State. It also points towards the crying need for pre-legislative consultative policies involving citizens before such wide-ranging decisions are made.

What’s the best-case scenario?

This non-participatory policy fix is not unique to India, it currently exists in some form in over 130 countries. These are a combination of unconditional and conditional transfers, which as the name suggested are used to provide cash incentives to mold behavior in a certain way. Looking at the best-case scenarios in the international arena has some valuable lessons for us in India.

Prospera in Mexico, Bolsa Familia in Brazil and Pantawid Pamilya in the Philippines are the largest and most successful cash transfers in the world. While their achievements, in increasing performance on maternal and child indicators, reducing poverty and improving education outcomes are not insubstantial, three aspects become strikingly clear in comparison with the Indian context. The first is that even the largest cash transfer program of the world does not compare to the universal entitlements under the MGNREGA and the NFSA, which taken together reach approximately two third of the population, i.e. 800 million citizens. Being legal entitlements they also have a minimum commitment of funding ensuring their sustainability unlike that of cash transfers. The third aspect is the absence of impact on governance as a factor in the implementation and evaluation of these programs.

If conditional cash transfers are attempting social engineering by incentivizing women to get pre-natal checkups done, and send their children to school, then the MGNREGA and NFSA are ambitious in their framework of rewiring governance structures. There is a lot of focus on setting up and institutionalizing social audits, to be conducted by citizens themselves facilitated by independent Social Audit Units. There is a heavy investment in grievance redress rules and architecture to make local administration accountable for the delivery of entitlements. Using the legal framework, there are ongoing attempts from Civil Society Organisations to enforce accountability at the macro level as well. The Supreme Court of India recently concluded hearing a Public Interest Litigation on the budgets for these welfare programs, and the weak enforcement of its inbuilt accountability structures.

Does Direct Benefit Transfer Reduce Corruption?

Given the strong ground we are on vis a vis the legal entitlements for the right to food and work, would the introduction of Direct Benefit Transfer (DBT) build on this architecture or erode some of its gains? A closer look at the data would perhaps point to some answers. As per the information provided by the Government of India, approximately Rs. 60,000 crores have been “saved” after using the DBT platform, since 2015. However as has been pointed out, these “savings” are deeply contested, and endorsed by the office of the Comptroller and Auditor General in the case of the LPG subsidy. The methodology of arriving at savings claimed, is not in the public domain. In the absence of which no action can be taken against officials who perpetuated corruption and duplicity. Also new citizen beneficiaries are not being added in place of the allegedly fake ones weeded out. It is inevitable that the narration of alleged benefits of DBT is viewed with a certain amount of skepticism. What is clear however is that the substitution of entitlements for cash, reduces citizen’s agency and is regressive, setting back gains made in participatory democratic rights, with the right to transparency and accountability.

There is a huge difference between the two approaches in addressing the fundamental question about power sharing between the two approaches. Whereas entitlements make an investment in human capabilities and provide citizens a right to participate in governance, cash transfers reduce their engagement with the state to that of a transaction. By individualizing the benefit, it eats into the most effective tool vulnerable citizens have, that of collectively raising a voice. By leaving persons to fend for themselves, individually, this has a bearing on the already extremely skewed nature of power between citizens and field functionaries including bank officials.

While the MGNREGA shares power and economic resources, through participation in decision making and demanding open governance; cash transfers undermine the process to a great extent. The discourse on cash transfers is also silent on the indexation of these transfers. We need only look at the pathetic state of existing cash transfers, such as social security pensions which have remained Rs. 200 per month from the Central Government, over the past ten years, thus reducing 50% in real terms.

It is clear that what India needs is the strengthening of the legal frameworks of the MGNREGA and NFSA, both in its macro issues of funding and expansion of entitlements. It also needs to pay attention to the malfunctioning of its local governance systems, to bring in greater accountability. It indicates the need to strengthen and index existing cash transfers such as social security pensions. A substitution of an entitlement for cash is reversing the small concession of power sharing existing in MGNREGA - extracted through people’s mobilization and political action - back to the State.

 

Aruna Roy is a social activist with Mazdoor Kisan Shakti Sangathan. She would like to thank Elisa Tontino for the research assistance on cash transfers at the Central European University where she was Professor of Practice, 2017. The opinions expressed are her own.

Inayat Anaita Sabhikhi is a social accountability fellow with the Centre for Budget and Governance Accountability. The opinions expressed are her own.

The views expressed in this piece are those of the author, and don’t necessarily reflect the position of CBGA. To reach them, you can write to inayat.sabhikhi@gmail.com.