Central Idea

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme has faced persistent criticism, with allegations of high corruption rates.
A critical component meant to address this issue is the social audit units tasked with detecting malpractice within the program.
However, the recovery of embezzled funds has been notably ineffective.

What is MGNREGS?

Enacted Under	Mahatma Gandhi National Rural Employment Guarantee Act of 2005
Objective	To guarantee the ‘Right to Work’ by providing employment opportunities for unskilled workers in rural areas.
Origin	Proposed in 1991 by V. Narasimha Rao and later enacted in 2005.
Duration of Employment	At least 100 days of employment is guaranteed to willing unskilled workers.
Enforceable Commitment	The scheme ensures an enforceable commitment on the implementing machinery, which is the State Governments, providing bargaining power to the laborers.
Unemployment Allowance	If employment is not provided within 15 days of receiving a job application from a prospective household, an unemployment allowance is paid to the job seekers.
Eligibility Criteria	Any Indian citizen above the age of 18 years residing in rural India can apply for the MGNREGS scheme. Applicants should be willing to engage in unskilled work.
Geographical Proximity	Employment is to be provided within 5 km of an applicant’s residence.
Minimum Wages	Minimum wages are to be paid for the work done under MGNREGS.
Legal Entitlement	Employment under MGNREGS is considered a legal entitlement.

Current Recovery Rates: Statistics from the Union Rural Development Ministry for the ongoing financial year indicate that less than 14% of the amount flagged by auditors has been successfully recovered.
Past Years’ Performance: The recovery figures for previous financial years paint a similarly bleak picture, with poor outcomes:

1. 2022-23: ₹86.2 crore was identified as recoverable, but only ₹18 crore (20.8%) was retrieved.
2. 2021-22: ₹171 crore misappropriation was flagged, but only ₹26 crore (15%) was recovered.

Social Audit Unit Independence: Section 17 of the MGNREGA Act mandates gram sabhas to monitor work execution, with independent social audit units in each state responsible for uncovering malpractice. However, their scope is limited to flagging issues, leaving recovery actions to state governments.

Seminar Insights: A recent Ministry seminar revealed a concerning scenario of underfunded social audit units lacking adequate training and personnel. These units play a crucial role in identifying cases of malpractice.
Funding Delay Issues: While the Union government funds these audit units to maintain their independence from state authorities, units in some states, such as Karnataka and Bihar, have faced funding delays for nearly two years.

Consistent State Trends: Over the past three years, certain states consistently report “zero number of cases” and “zero recoveries,” casting doubt on the effectiveness of monitoring efforts.
Examples of Poor Recovery: States like Telangana have active social audit units flagging numerous cases, yet the recovery rates remain dismal. For instance, in the ongoing financial year, auditors identified ₹6.6 crore for recovery, but only ₹2,087 has been recuperated so far.
Vigilance and Pressure: While the Centre’s vigilance and pressure on states to recover misappropriated funds are appreciated, there are concerns regarding states that identify multiple cases but struggle with recovery. Furthermore, states reporting no cases indicate a lack of effective monitoring.

Challenging Recovery Landscape: The MGNREGA scheme’s social audit units serve as a crucial mechanism to combat corruption, but the inadequate recovery of embezzled funds threatens their credibility.
Need for Adequate Resources: To make the audit process effective, it is imperative to ensure that social audit units are adequately funded, trained, and staffed.
Balancing Act: Balancing scrutiny with recovery actions is vital to enhance the transparency and integrity of the MGNREGA scheme, which plays a pivotal role in rural employment and development.