Mains Paper 3: Economy
Prelims level: PM-KISAN
Mains level: Issues Related to Poverty, Inclusion, employment and Sustainable Development
• According to news reports, unemployment is the highest in 45 years.
• To allay some misgivings of the distress, one of the announcements in the Budget speech was that “vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of ₹ 6,000 per year”.
• This cash transfer scheme has been called Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
• The Ministry of Agriculture has written to State governments to prepare a database of all eligible beneficiaries along with their Aadhaar numbers, and update land records “expeditiously”. The letter further states that changes in land records after February 1, 2019 shall not be considered for this scheme.
• The farmers’ distress needs urgent attention but let’s see if the PM-KISAN is a reasonable solution.
• Jharkhand has the lowest daily MGNREGA wage rate, and Haryana the highest.
• Put simply, a month of MGNREGA earnings for a household is more than a year’s income support through PM-KISAN anywhere in the country.
• PM-KISAN is a targeted cash transfer programme and MGNREGA is a universal programme. Any rural household willing to do manual work is eligible under the Act.
• According to the 2011 Socio-Economic and Caste Census, around 40% of rural households are landless and depend on manual labour.
• The landless can earn through the MGNREGA but are not eligible for the PM-KISAN scheme.
• Notwithstanding the meagre amount, the PM-KISAN might be pitting the landless against a small farmer.
• There is also substantial evidence to demonstrate that universal schemes are less prone to corruption than targeted schemes.
• In targeted programmes, it is very common to have errors of exclusion, i.e., genuine beneficiaries get left out. Such errors go unrecorded and people continue to be left out.
• It is in some of these contexts that strengthening an existing universal programme such as the MGNREGA would have been a prudent move instead of introducing a hasty targeted cash transfer programme.
• Field functionaries are pushed to meet stiff targets.
• Being short-staffed and inadequately trained, this results in many technical and unforeseen errors.
• A case in point is the rushed manner in which Aadhaar has been implemented for the MGNREGA.
• Several MGNREGA payments have been rejected, diverted, or frozen as a consequence. In the last four years alone, more than ₹1,300 crore of the MGNREGS wage payments have been rejected due to technical errors such as incorrect account numbers or faulty Aadhaar mapping.
• There have been no clear national guidelines to rectify these.
• There are numerous cases of MGNREGS payments getting diverted to Airtel wallets and ICICI bank accounts. In Jharkhand for Aadhaar-based payments, it was found that 42% of the biometric authentications failed in the first attempt, compelling them to come later.
• This continued harassment faced by people would have been a more humane question to address rather than brushing them aside as “teething problems” and build a new scheme on similar shaky platforms.
PM-KISAN scheme success
• The success of the PM-KISAN is contingent on there being reliable digital land records and reliable rural banking infrastructure — both are questionable at best.
• While ₹75,000 crore has been earmarked for this scheme, the MGNREGA continues to be pushed to a severe crisis.
• The MGNREGA allocation for 2019-20 is ₹60,000 crore, lower than the revised budget of ₹61,084 crore in 2018-19. In the last four years, on an average, around 20% of the Budget allocation has been unpaid pending payments from previous years.
• Thus, subtracting the pending liabilities, in real terms, the Budget allocation has been lower than 2010-11.
• Despite a letter to the Prime Minister by citizens and MPs in January 2019, (as of February 8) all MGNREGA funds have been exhausted.
• While the country stares at an impending drought, workers languish in unemployment. The MGNREGA is neither an income support programme nor just an asset creation programme.
• It is a labour programme meant to strengthen participatory democracy through community works.
• It is a legislative mechanism to strengthen the constitutional principle of the right to life.
• That the MGNREGA works have demonstrably strong multiplier effects are yet another reason to improve its implementation.
• Despite all this, the MGNREGA wage rates in 18 States have been kept lower than the States’ minimum agricultural wage rates. This acts as a deterrent for the landless.
• Yet, work demand has been 33% more than the employment provided this year underscoring the desperation to work.
• In an employment programme, adequacy of fund allocation and respectable wages are crucial, so meaningless claims of “highest ever allocation” and other dubious claims through a management information system are unhealthy for democracy.
• At a time of such acute distress, does it not behave the Central government to improve the existing universal infrastructure of the MGNREGA before plunging into a programme pretending to augment farmers’ income?
Q.1) The New Development Bank is associated with which of the following international organisation/ grouping?
(a) Shanghai Cooperation Group
(b) World Trade Organisation
Q.1) Strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN. Give your arguments in this regard of this statement.