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Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) aims to provide secure livelihood opportunities to the rural population of the country by generating 100 days of employment to each household in every financial year. However, the scheme, of late, has been critisised for not being able to generate adequate number of days of employment and make payments regularly due to financial crunch. The present piece assesses the financial performance of MGNREGS in Balasore district, Odisha.

We looked at MIS data from the MGNREGS official website (https://nrega.nic.in/netnrega/home.aspx) for the period 2015-16 to 2018-19. For estimating financial progress, we used data on total expenditure, component and block wise expenditure, and opening /closing balance of the scheme for the district Balasore. We have compared the district's performance with other districts of the state of Odisha in order to assess its relative performance.

Findings:

• • a) Total Expenditure on MGNREGS: Expenditure on MGNREGS had increased from Rs. 37 crore in 2014-15 to Rs. 45 crore in 2018-19 for the district and the extent of increase in expenditure was 24 per cent approximately
    (Figure 1).

Figure 1 Expenditure on MGNREGS in Balasore, 2014-15 to 2018-19, (in Rs. Crore)

Source: Compiled by CBGA from MIS, MGNREGS, Ministry of Rural Development, GoI.

• • b) Component wise expenditure on MGNREGS: The extent of expenditure on wage component was found to have increased by 26 per cent during study period. The respective figures for material and administrative expenses were around 17 and 3 per cent respectively. Share of the fund on wage component was more than 60 per cent as prescribed in the guidelines (Figure 2).

 

Figure 2 Share of Expenditure across Components, in Balasore, 2014-15 to 2018-19, (in Rs. Crore)

Source: Compiled by CBGA from MIS, MGNREGS, Ministry of Rural Development, GoI.

• c) Expenditure on MGNREGS across blocks: Expenditure on MGNREGS has increased for all the blocks in the district, except Baliapal, Nilgiri and Soro. Extent of increase in expenditure was highest in Bahanaga, followed by Remuna, Bhagrai and Basta respectively (Table 1).

Table 1 Block Wise Increase in Expenditure on MGNREGS

Block	2015-16	2018-19	Rate of change (%)	Block	2015-16	2018-19	Rate of change (%)
Bahanaga	88	194	121	Khaira	310	415	34
Baleshwar	196	345	76	Nilgiri	486	383	-21
Baliapal	466	457	-2	Oupada	233	262	12
Basta	251	463	84	Remuna	151	288	91
Bhograi	348	644	85	Simulia	304	334	10
Jaleswar	474	475	0	Soro	382	286	-25

Source: Compiled by CBGA from MIS, MGNREGS, Ministry of Rural Development, GoI.

• d) Expenditure under MGNREGS across districts in Odisha: Balasore was found to increase expenditure on MGNREGS by 23 per cent. The extent of the increasein expenditure in Balasore is close to two times higher than the state average. However, the district lags behind many other districts of the state (Table 2).

 

Table 2 Extent of Increase in Expenditure of MGNREGS fund across Districts in Odisha, 2015-16 to 2018-19

Districts	Expenditure (in Rs. Crore) (2015-16)	Expenditure (in Rs. Crore) (2018-19)	Rate of change (%)	Ranks
Angul	34	42	24	14
Baleshwar	37	46	23	15
Bargarh	30	48	61	5
Bhadrak	21	31	46	8
Bolangir	94	106	13	18
Boudh	29	40	37	10
Cuttack	31	39	27	13
Deogarh	19	32	67	4
Dhenkanal	27	62	129	1
Gajapati	60	58	-4	26
Ganjam	197	226	15	17
Jagatsinghapur	16	25	52	6
Jajpur	30	62	108	2
Jharsuguda	13	17	30	12
Kalahandi	78	83	7	23
Kandhamal	101	100	-1	25
Kendrapara	23	34	51	7
Kendujhar	145	163	12	19
Khordha	19	25	30	11
Koraput	148	164	11	21
Malkangiri	36	32	-11	29
Mayurbhanj	343	307	-11	28
Nabarangapur	87	91	5	24
Nayagarh	34	66	94	3
Nuapada	47	38	-19	30
Puri	30	41	38	9
Rayagada	92	100	8	22
Sambalpur	49	55	11	20
Sonepur	27	33	19	16
Sundargarh	150	140	-7	27
Total	2049	2307	13

Source: Compiled by CBGA from MIS, MGNREGS, Ministry of Rural Development, GoI.

• e) Negative Balance in MGNREGS Account in Balasore: Although expenditure on MGNREGS has been increasing since last few years in Balasore and the district has been able to provide work to more than 90 per cent of the beneficiaries, there exists need for more funds as all the blocks in the district, except for Remuna and Baliapal, show negative balance in MGNREGS account (Table 3). These figures clearly point towards poor planning processes, lack of effort to decentralize administrative power to local bodies and fund crunch. The districts are not allowed to prepare programme implementation plan under MGNREGS, although they are in a betterposition to estimate local demands and they can deal with local issues associated with the economy in a better way. However, a top down planning process has been institutionalized for planning and budgeting for MGNREGS where union ministry and state department jointly prepare the plan and budget for the programme, leaving districts (and units below district) at the receiving ends. Quite obviously, the planning and budgeting based on some asymmetric information, turns out to be inefficient and inadequate as it results in underpayment, delay in wage payment, low level of employment generation, and, in turn, poor implementation.

Table 3 Negative Balance under MGNRGEGS accounts across Blocks in Balasore, 2018-19 (In lakhs)

Blocks	Balance (2018-19)	Blocks	Balance (2018-19)
Bahanaga	-1.01	Khaira	-100.23
Baleshwar	-3.95	Nilgiri	-13.87
Baliapal	14.55	Oupada	-0.53
Basta	-2.67	Remuna	41.98
Bhograi	-0.88	Simulia	-5.12
Jaleswar	-33.74	Soro	-3.01

Source: Compiled by CBGA from MIS, MGNREGS, Ministry of Rural Development, GoI.

Conclusion:

Although the district has increased fund absorption under MGNREGS, there remains scope to increase the same further as the programme has not been able to provide employment to all households which demanded employment. The district administration needs to demand more funds from the centre since all blocks in Balasore district are running negative balance under MGNREGS account. Bottom-up planning approach is required to understand actual demand in the district. The district should be given autonomy in preparing annual plans considering the possible convergence in producing outputs / services with other schemes and programmes from the ground instead of following targets set for the district from the top. Union and state governments should ensure districts’ representation in planning and budgetary process of MGNREGS for effective implementation of the scheme.

Community participation is very important to make the programme successful. Communities have full information about demand for employment in their localities (which the centre or states do not know) and union/states/districts have full information about the budget and processes the scheme involves (which the beneficiaries do not know). Increase in community participation can erase this information asymmetry problem and can ensure better planning at the levels of district and below.

 

The views expressed in this piece are those of the authors, and don’t necessarily reflect the position of CBGA. You can reach Mampi Bose at mampi@cbgaindia.org and Naresh Kumar Nayak at naresh@cbgaindia.org.