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29th September 2023 (10 Topics)

Shrinking the safety net


The cuts in the MNREGA budget and the refusal to acknowledge problems with the Aadhaar-based payment system may cause rural workers to fall into extreme poverty.

Government's Budget Cut

  • Budget Reduction: The government has slashed the MNREGA budget from Rs.98, 000 crore in FY 2022 to Rs.60, 000 crore in 2023, raising concerns.
  • Demand-Driven Scheme: MNREGA is demand-driven, indicating reduced budget allocation might imply a lack of recognition for its necessity.
  • Rural Poverty Alleviation: MNREGA plays a vital role in alleviating rural poverty by providing employment opportunities in a struggling job market.

Decline in Real Wages

  • Real Wage Stagnation: Real wages in the construction sector, a major source of rural non-farm employment, have stagnated, affecting workers' economic well-being.
  • Shift to Casual Wage Employment: A transition from agricultural to non-agricultural wage labor has occurred, contributing to declining agricultural wages.
  • Institutional Barriers: Reduced workdays, poor job distribution, and delayed wage payments create barriers for rural workers, pushing them towards extreme vulnerability.

State Funding and Economic Blockade

  • Union-State Synergy: MNREGA relies on cooperation between the Union and states, but non-BJP states like West Bengal face fund blockades.
  • Denial of Wages: The Union government withholding funds has led to reduced employment and victimization of workers in states like West Bengal.
  • Multiple Schemes Affected: The withholding of funds has also affected other schemes like PM Awas Yojana (Grameen), impacting beneficiaries.
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