Only ₹90,000 released as ‘unemployment allowance’ in FY 24 under MGNREGS
The clause to pay unemployment allowance if work is not provided within 15 days of demand raised by a beneficiary was to hold the States accountable in providing work. But it is a clause that has been chronically underused because of a variety of reasons
The low disbursal of unemployment allowance is a chronic problem in the Mahatma Gandhi National Rural Employment Guarantee Act’s implementation. File
| Photo Credit: DEBASISH BHADURI
Going against one of the key objectives of the Mahatma Gandhi National Rural Employment Guarantee Act, only ₹90,000 was released by various States in 2023-24 as “unemployment allowance”, which is provided to workers in case of unmet work demand. The corresponding figure was ₹7.8 lakh in 2022-23.
The ‘Economic Survey 2024’ tabled in the Parliament on July 22 pointed out that these figures are clearly deficient and do not reflect the correct picture in regard to unmet work demand. The survey noted that work was often unavailable for beneficiaries and that block-level functionaries may not register demand for work in real time. “Consequently, formal data showing MGNREGA work demand may not reflect the true demand and current rural economic distress,” it said.
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It also pointed out the flaw in the reporting system of MNGREGA underlining that work demanded is only reported on the portal when employment is actually provided. “Presumably to save on the State government’s liability towards unemployment allowance,” the survey said.
According to Section 7(1) of MGNREGA, 2005, “If a person applying for employment under the scheme is not employed within 15 days, he shall be entitled to a daily unemployment allowance.” The law states that this allowance shall be one-fourth of the wage rate for the first 30 days of the financial year and half of the wage rate for the remainder.
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Low disbursal of unemployment allowance is one of the chronic problems in implementation of the Act. In 2022-23 and 2023-24, only six States paid the allowance. In the two financial years before that – 2021-22 and 2020-21 – only three and four States, respectively, disbursed the allowance. In 2019-20, not a single State paid the money.
Nikhil Dey of Mazdoor Kisan Shakti Sangathan (MKSS), one of the authors of the Act, said “unemployment allowance” was introduced in the law to fix accountability for the States and is key tool to ensure that States provide work under the law that rests on the assured employment principle. It also remains one of most underutilised clauses because of several administrative deficiencies.
“The short answer to the question, ‘who is responsible for such low figures of unemployment allowance’, is of course the States, but the long answer is more complicated. One of the key reasons MNGREGA job cardholders are unable to receive the allowance is that they rarely are handed out the receipt registering their demand. This could be blamed on antipathy or inefficiency of the block-level administration. But often we find that the State governments are squeezed between the beneficiaries and chronic under-budgeting for the scheme by the Centre,” he said.
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In a report of the Parliamentary Standing Committee on Rural Development tabled in February this year, other than providing an State-wise account of the allowance disbursal, the only response available from the Ministry of Rural Development on this issue was that they will “look into it.” The Standing Committee recommended that the Centre should take up the matter at the “highest level” with the concerned States and Union Territories “so that the State governments do not fail in their statutory duties to provide the unemployment allowance to the MGNREGA beneficiaries”.
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