In a letter signed by over a hundred citizens, the signatories that included Aruna Roy, Nikhil Dey, Jean Dreze, Harsh Mander, Prabhat Patnaik and Abhijit Sen sought the Prime Minister’s “immediate assurance” that such “retrograde, anti-poor and anti-labour measures” would be withdrawn.
The Mahatma Gandhi National Rural Employment Guarantee Act guarantees up to 100 days of unskilled work for every rural household in a year. Gadkari plans to change the scheme’s labour-material ratio from 60:40 to 51:49.
A 60:40 labour-material ratio means cost of material for a project cannot exceed 40 per cent of the total cost, while expenses on labour can go up to 60 per cent. In other words, making the ratio 51:49 would dilute the scheme’s labour-intensive nature.
The proposal had triggered concerns among ministry officials. In a note they said it was legally and technically possible to change the ratio, but added that it “runs contrary to the spirit of the act”.
But documents accessed under the information act by the NGO Peoples’ Actions for Employment Guarantee (PAEG) showed that Gadkari overruled the objections.
Gadkari had indicated the proposed changes while replying in the Lok Sabha on July 30 to a discussion on irregularities in the employment act. Sources said the change had been proposed following the alleged inability of implementing agencies to create “durable and productive” assets because of constraints the ratio imposed on expenditure on the material component.
The material component in MGNREGA projects now accounts for about 27 per cent of the project cost. If this component is raised to 49 per cent, funds available for wages would come down sharply. This could result in total employment coming down to 136 crore persondays per year, compared with the 220 crore persondays in 2013-14.
This fall in persondays of work, the ministry officials had estimated, would adversely affect some five crore rural families.
But Gadkari seems determined to push through the change. A note dated August 8 and signed by him said the ratio of 51:49 should be brought about “immediately through an amendment in Scheduled-I of the Act”.
“The concerns expressed by the (ministry) joint secretary that this will lead to shortage of funds for (the) wage component is not justified as the government of India is legally bound to provide additional funds if such demands arise,” the note said.
Today, some of those who signed the letter to Modi, addressed a media conference criticising the proposed change. Activist Roy, who is associated with PAEG, described as “hoax” the minister’s assertion that changing the ratio would not lead to shortage of funds for wages.
“An additional Rs 20,000 crore would be required under the MGNREGA apart from Rs 33,000 crore allocated to ensure that the change in labour-material ratio does not lead to shortage of funds for wages. There is no sign of that additional funds coming. What the minister saying is false.”
Patnaik said non-creation of assets cannot be a reason to dilute the act. Former solicitor general Indira Jaising said the government cannot amend the schedule by an executive order.