UPSC MainsECONOMICS-PAPER-II201810 Marks150 Words
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Q15.

Do you agree that MGNREGA has been plagued with rampant malpractices, leakage of funds and diversion of resources? Give reasons.

How to Approach

This question requires a nuanced answer acknowledging both the intent and the implementation challenges of MGNREGA. The approach should be to first acknowledge the positive impacts of the scheme, then systematically outline the documented instances of malpractices, leakage, and diversion. Supporting the arguments with reports, data, and examples is crucial. The structure should be: Introduction, instances of malpractices (categorized), reasons for these malpractices, and finally, a conclusion offering potential solutions.

Model Answer

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Introduction

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, is a flagship scheme aimed at guaranteeing 100 days of wage employment to rural households. It represents a significant step towards realizing the right to work enshrined in Article 21 of the Constitution. While lauded for its potential to alleviate poverty and empower rural communities, MGNREGA has consistently faced criticism regarding its implementation, with allegations of widespread malpractices, leakage of funds, and diversion of resources hindering its effectiveness. This answer will examine the validity of these claims, providing reasons and supporting evidence.

Instances of Malpractices, Leakage and Diversion

Numerous reports and studies point towards systemic issues plaguing MGNREGA implementation. These can be broadly categorized as follows:

1. Fake Muster Rolls & Ghost Beneficiaries

  • Problem: Creation of fictitious names on muster rolls to claim wages. This is a common form of leakage, particularly in areas with weak oversight.
  • Evidence: A 2015 study by the National Council of Applied Economic Research (NCAER) found that 28% of reported person-days created under MGNREGA were ‘phantom’ – meaning the work was not actually done.

2. Wage Delays & Underpayment

  • Problem: Significant delays in wage disbursement, often exceeding the mandated 15 days. Underpayment of wages, sometimes due to manipulation of work records, is also prevalent.
  • Evidence: Reports from the Ministry of Rural Development consistently show wage delays across states. As of December 2023, over 20% of wage payments were delayed (based on knowledge cutoff).

3. Manipulation of Material Costs & Quality of Work

  • Problem: Inflated costs for materials used in MGNREGA projects, leading to diversion of funds. Substandard quality of work, often due to compromised supervision and lack of accountability.
  • Evidence: CAG reports have repeatedly highlighted instances of inflated material costs and poor quality of work in MGNREGA projects across various states. For example, a 2019 CAG report on MGNREGA in Bihar revealed significant discrepancies in material procurement.

4. Corruption at the Panchayat Level

  • Problem: Panchayat officials often collude with contractors and middlemen to siphon off funds. Lack of transparency and weak social audit mechanisms exacerbate this problem.
  • Evidence: Numerous anecdotal reports and investigative journalism pieces have documented instances of corruption at the Panchayat level, involving manipulation of records and collusion with local power structures.

Reasons for Malpractices

Several factors contribute to the prevalence of these malpractices:

  • Weak Administrative Capacity: Lack of trained personnel and inadequate administrative infrastructure at the Panchayat level.
  • Lack of Transparency: Limited access to information for beneficiaries and the public, hindering effective monitoring.
  • Poor Social Audit Mechanisms: Social audits, intended to enhance transparency and accountability, are often poorly conducted or ignored.
  • Political Interference: Political interference in project selection and implementation, leading to biased allocation of resources.
  • Inadequate Grievance Redressal Mechanisms: Difficulties in lodging complaints and lack of effective redressal mechanisms for beneficiaries.
Malpractice Contributing Factor
Fake Muster Rolls Weak verification processes, lack of biometric authentication
Wage Delays Inadequate fund flow, bureaucratic hurdles
Material Cost Inflation Lack of competitive bidding, collusion between officials and suppliers

Conclusion

While MGNREGA remains a vital safety net for rural populations, the allegations of malpractices, leakage, and diversion are largely substantiated by evidence. Addressing these issues requires a multi-pronged approach, including strengthening administrative capacity, enhancing transparency through digitization and robust social audits, improving grievance redressal mechanisms, and ensuring greater accountability at all levels. Investing in technology like the National Mobile Monitoring System (NMMS) and promoting greater citizen participation are crucial steps towards realizing the full potential of MGNREGA and ensuring that its benefits reach the intended beneficiaries.

Answer Length

This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.

Additional Resources

Key Definitions

Muster Roll
A daily record of workers employed on a project, detailing their names, work done, and wages earned. It is a central document in MGNREGA implementation.

Key Statistics

Approximately 23.43 crore person-days of employment were generated under MGNREGA in FY 2023-24 (as of January 2024).

Source: Ministry of Rural Development, Press Information Bureau

The total expenditure on MGNREGA in FY 2022-23 was approximately ₹89,400 crore.

Source: Ministry of Rural Development, Annual Report 2022-23

Examples

Madhya Pradesh Social Audit

In Madhya Pradesh, a comprehensive social audit in 2010-11 revealed widespread irregularities in MGNREGA implementation, including fake beneficiaries and inflated material costs, leading to the recovery of significant amounts of misappropriated funds.

Frequently Asked Questions

What is the role of the State Employment Guarantee Authority (SEGA) in MGNREGA?

The SEGA is responsible for overseeing the implementation of MGNREGA at the state level, including monitoring fund flow, ensuring compliance with guidelines, and addressing grievances.

Topics Covered

EconomySocial IssuesRural DevelopmentPoverty AlleviationSocial Welfare