MGNREGA Repealed: How VB-GRAMG Ends India’s Right to Work

On December 18, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was repealed and replaced by the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, or the VB-GRAMG Bill, the Narendra Modi government’s most successful surgical strike on the working poor so far. It has destroyed the right to work and removed a rights-based legislation that has enrolled 26 crore registered workers for the scheme. Prime Minister Modi‘s unequivocal statement of intent in Parliament in 2015 was that the MGNREGA would be kept alive only to remind us of the “monumental failure” of the law and of the then United Progressive Alliance government’s efforts. But the fact remains that even in its neglected and deliberately undermined form, the MGNREGA served as a lifeline to the rural poor.

What the Modi government actually intended was to remove the right to work that allowed the democratic, social, and economic empowerment of the country’s most marginalised. The right was a thorn in the design of privatisation and corporatisation envisaged for the economy—the growth models of the current government. When India’s working people were unceremoniously turned out of jobs and urban centres during the dire times of the COVID pandemic, even the Modi government had to turn to the MGNREGA’s unique protective and practical architecture to enable such people to survive. But its inherent dislike of that law, and what it stood for, never ended—and finally it was unceremoniously repealed.

When something is planned as an assault, surprise and shock are clearly part of the playbook. The shock came in two instances: 1) when the Cabinet made the announcement that the name of the Act was being changed—to drop the reference to Mahatma Gandhi and replace it with an awkward acronym that brazenly evokes the religion and symbolism of the majority population in an attempt to seek legitimacy and divert criticism—and 2) when it made the claim that the number of workdays was being increased from 100 to 125 days per household. What remained deliberately undisclosed was that the universal right to work had been repealed, and all participatory rights in the MGNREGA—including the workers’ right to demand work and claim benefits—were replaced with a design where all rights to decide the where, what, how, and how much of the work would be vested with the Central government, with the onus of carrying out its fiat mandated to the States.

Stakeholders not consulted

Despite marking such a major shift in the development framework, the VB-GRAMG was kept away from consultation within and outside government and out of public disclosure. So much so that when the Bill was placed in Parliament, even ruling party members were unaware of its formulation, and the State governments were completely ignored. The Bill was passed with unseemly speed and aggression, ignoring the demands of the opposition for discussion and the setting up of deliberative parliamentary committees that could consider the repeal of the MGNREGA and examine the contents of its replacement. There are, in fact, two separate frameworks that have been stitched together, whereas the claim is that one law replaces the other.

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The repeal of the MGNREGA has destroyed 20 years of an era of rights-based rural development policy and workers’ empowerment in India. These positive, proactive rights had a positive impact by not just enabling the dispersal of money to service a limited right to work law but by improving the bargaining power of rural Dalits, tribal people, women, small and marginal farmers, and landless labourers. VB-GRAMG introduces a centralised, extractive, top-down development framework in one of the world’s largest and most complex economies.

VB-GRAMG has little to do with generating employment, and this can best be understood by comparing it with the MGNREGA. A cursory reading of the new law and its schedule could be misleading as the changes appear to be marginal. However, at least six precise and important changes have been made that fundamentally dismantle the MGNREGA’s provision for the right to demand work and fair wages and undermine the participation of the worker and the panchayats in the planning and implementation of work.

All powers vested with the Centre

First, the universal right to demand work has been replaced by a provision that notionally and selectively operationalises the guarantee of 125 days of work. This confusion has been deliberately created and propagated, necessitating reading the entire section with careful analysis.

Section 5(1) of the new Act states: “Save as otherwise provided, the State Government shall, in such rural area in the State as may be notified by the Central Government, provide to every household whose adult members volunteer to do unskilled manual work, not less than one hundred and twenty-five days of guaranteed employment in a financial year in accordance with the Scheme made under this Act.” (emphasis added)

A cursory reading of this paragraph would indeed make all critics seem as alarmists who have not seen the promise of the enhanced work-hour guarantee. The Centre, including Union Minister Shivraj Singh Chouhan, has deliberately quoted this section selectively in order to propagate the claim of the enhanced employment guarantee of 125 days. However, the phrase we have italicised shows that through this provision, the Centre has actually given itself the power to make the Act operational only “in such rural area in the State as may be notified by the Central government”. This provision alone completely destroys the universal demand-based guarantee.

Secondly, the demand-based nature of the earlier Act has been converted to an allocation-based programme. Section 4(5) empowers the Central government to exercise its patronage and make different allocations for different States based on a “normative” framework decided by itself. This section reads: “The Central Government shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the Central Government.”

State forced to pitch in

Thirdly, a new 60:40 ratio has been introduced. In Section 22, the Centre overrides its constitutional obligation under Article 258 of having to obtain prior agreement and consent before imposing any programme that requires the State government to allocate resources towards fulfilling a Central legislative obligation.

In Section 22(2) of the VB-GRAMG, the Centre mandates by law that in most States (barring the north-eastern and Himalayan States) the State governments shall pay 40 per cent of the costs of the scheme. Under the MGNREGA, the Central government paid 100 per cent of the wage component and could insist that the State governments provide work on demand. But mandating by law that the State pay 40 per cent of the money for a centrally sponsored scheme has implications not just for this Act but well beyond it.

The new Act, even in its limited form, may prove to be a non-starter: If State governments are unable to come up with their share of 40 per cent as mandated by the law, the Central government might refuse to give its 60 per cent share—and the scheme would just become fodder for a political blame game, with nothing happening on the ground.

If it works as per design, this could mean that the Central government could in future easily mandate by law that a certain percentage of costs of every scheme or programme be shared by the States even if these are Central schemes. The already stretched ecosystem of fiscal federalism could be torn apart by this precedent.

Power being centralised

Fourthly, the plan to centralise the scheme is clearly visible also through the architecture of the scheme as it is flows from Delhi. Works chosen earlier by panchayats will now be replaced on the basis of the priorities conceived for “Viksit Bharat”, spearheaded by the large infrastructure-driven PM Gati Shakti Mission. This is an unwelcome inversion of the model where gram sabhas (basically, the people) and panchayats were empowered by law to choose and prioritise development works under the MGNREGA, with employment generation budgets being the fulcrum of planning.

Fifthly, when proposals come from the Centre but accountability is fixed on the States, the entire burden for implementing even this notional work “guarantee” falls on the States. In the MGNREGA, the labour budget was provided by the Central government, making the States liable only to pay unemployment allowance if they failed to provide work on demand. However, the States and panchayats now have to both find the resources and be liable for non-performance. The accountability mechanisms towards workers are further weakened by an escape clause whereby the States have to formulate the rules for unemployment allowance and compensation for delay in payment of wages, and the unemployment allowance has been made payable “subject to the economic capacity of the State government”.

It is highly unlikely that any unemployment allowance or compensation for delay will be paid. However, there is no similar escape clause for States that cannot pay the mandatory 40 per cent contribution to the scheme. Section 4(6) also mandates that the States will have to bear 100 per cent of any expenditure that is above the “normative allocation” through procedures “prescribed by the central government”.

Right to minimum wages eroded

Lastly, since its inception, the MGNREGA has been incorrectly accused of leading to a shortage of farm labour. The fact remains that big landlords want slavish agricultural labour. It is clear from all studies thus far that all that the MGNREGA managed to do was to provide a safety net for workers to opt out of working at exploitative rates. Landless labourers and small and marginal farmers who looked for work beyond farming did not actually go for MGNREGA jobs during farming seasons. It was used as a fallback minimum wage (a kind of minimum support wage for labour) below which the labourer could refuse to come for agricultural or other work. The MGNREGA dramatically changed the slave-like conditions of agriculture labour that had existed for centuries, and for the first time in the history of workers made minimum wages a kind of reality, giving poor labourers a bargaining chip.

The VB-GRAMG has, however, unashamedly pitched in its lot with employers and big landlords. The ban on guaranteed work for a 60-day period when farming operations are at a peak will again provide employers with cheap labour. In fact, it is quite likely that the already stagnant rural wages will drop even further in the absence of work available to the 26.6 crore registered workers who could seek work at MGNREGA work sites every year. Think about it: would not traders and middlemen love to place a moratorium on minimum support prices for the 60 days when farmers have to sell their produce?

Exploitation encoded

Thus, the larger picture of removing fallback work and wage support and thereby promoting cheap labour for the new class of rural crony capitalists is clear. Governments had already stopped paying statutory minimum wages in most States even under the MGNREGA despite the Supreme Court’s observation that non-payment of minimum wages was forced labour. It is also worrying that the provision for indexing wages to inflation has been dropped and the Centre has empowered itself to fix the wage rate for workers under this programme anywhere in the country. It does not take much speculation to guess what kind of wages will be fixed by the Central government for rural workers in VB-GRAMG.

Also Read | MGNREGA, VB–G RAM G, and the unmaking of a right

This rearrangement of the right to work is also in tune with the motivation of the four Labour Codes that were recently adopted, and together they comprehensively seek to make rural and urban India far more business-friendly, removing regulatory or market interventions that might empower workers. A rights-based law such as the MGNREGA has no place in such an ecosystem, nor does the slogan: “Har haath ko kaam do, kaam ka poora daam do [jobs for every hand, full wages for every job].”

The MGNREGA was the outcome of a nationwide worker-led campaign that was defined by the popular imagination whereby people would be empowered through employment and wages. The slogan above not only resulted in a law but sustained millions of people in their struggle to have that law implemented. Conceptually and practically, it empowered people enough to be able to fight bigger battles. This is clearly why the country’s ruling elite had to roll back the MGNREGA and replace it with the anti-worker VB-GRAMG that empowers only employers and market forces, and the government itself, under the guise of a new law.

As workers begin to understand the ramifications of the new law, voices have started rising in protest. How brazenly the government will support the new law and what repressive measures it may take remain to be seen. Opposition parties, workers, unions, and social movements have already declared their determination to “save MGNREGA”. The 26.6 crore registered MGNREGA workers stretch across the length and breadth of India, and their potential and real impoverishment and disempowerment will have a political impact.

As the movement for the right to work faces a much more insensitive ruling establishment, can it overcome the challenge and not just re-establish the right to work but ensure an even more meaningful employment guarantee? That question is beyond partisan politics. As the workers press for their demands, it is not just the BJP but the ruling elite of an increasingly unequal India that will be watched.

Nikhil Dey and Aruna Roy are social activists and founder members of the Mazdoor Kisan Shakti Sangathan and have been involved with the movement for the enactment and implementation of MGNREGA.