Date : 22/07/2023

Relevance: GS Paper 2: Government Policies & Interventions

Keywords: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Financial Burden, Indira Gandhi Shahri Rozgar Guarantee Yojana

Context-

The Rajasthan Minimum Guaranteed Income Bill 2023, proposed by the Ashok Gehlot-led government, takes a rights-based approach toward establishing an extensive social security net.

Three Components of bill are:

Guaranteed Minimum Income:

Under this provision, every adult citizen in the state will receive a minimum income of 125 days each year. This entitlement will be fulfilled through two programs:

• Indira Gandhi Shahri Rozgar Guarantee Yojana for urban areas.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for rural areas.

The government has increased the employment guarantee from 100 days to 125 days for the urban employment scheme. Additionally, the state will offer 25 additional work days to supplement MGNREGA's 100 days in rural regions.

Guaranteed Employment:

• The Bill emphasizes timely payment of minimum wages on a weekly basis or within a fortnight after completion of work in urban or rural employment schemes. The responsibility of implementing the Act lies with a designated program officer, who must hold the position of a Block Development Officer in rural areas and an Executive Officer of the local body in urban areas.
• One crucial aspect is that the work site should be within a 5 Km radius of the job card registration location in both rural and urban areas.
• If the Program Officer fails to provide employment within 15 days of application, the applicant is eligible for a weekly unemployment allowance.

Guaranteed Social Security Pension:

• This category ensures that individuals falling into specific categories, such as the elderly, specially-abled, widows, and single women, are entitled to a minimum pension of Rs 1,000 per month. The pension amount will increase by 15% annually.
• It will be implemented in two installments, with a 5% increase in July and a 10% increase in January each financial year, beginning from 2024-2025.

Distinguishing from Cash Transfer Schemes:

• The Rajasthan Minimum Guaranteed Income Bill stands out from regular cash transfer schemes as it legally guarantees minimum income support, guaranteed employment, and pensions, aligning with Mahatma Gandhi's vision of comprehensive welfare measures.
• Unlike cash transfer schemes with limited coverage, the Bill covers all families in the state, providing employment and pension support to various vulnerable groups.
• The Bill incorporates an annual increment in pensions to keep pace with inflation, a feature not commonly found in cash transfer schemes.
• With a comprehensive approach towards social security, the Bill aims to benefit and uplift vulnerable sections of society.

Significance:

The Bill's significance lies in its commitment to providing a comprehensive social security net and uplifting the vulnerable sections of society. By guaranteeing employment and pensions through legislation, the approach taken by this Bill distinguishes itself from cash transfer schemes in other states. This move reflects the government's moral responsibility to ensure justice for all citizens and offer relief from inflation in preparation for upcoming elections.

Challenges and Fiscal Constraints:

• While the idea of ensuring a minimum income for citizens is commendable, the approach of implementing it through an urban employment guarantee scheme may face challenges. Unlike the seasonal demand for work in rural areas, the demand in urban areas is less predictable, making the design of the scheme complex. Moreover, there are concerns about the types of public works available in urban areas and the capacity limitations of urban local bodies.
• Financial Burden on the state: The scheme will have an additional expenditure of Rs 2,500 crore per year for this scheme, which may increase with time which might create an additional burden on the state.
• Targeted Implementation of the scheme: The implementation of the scheme in a manner that the targeted group gets benefitted is challenging
• Despite the wide popularity of this welfarist agenda, there are fiscal limitations that need consideration. Rajasthan carries one of the highest debt burdens among the states in the country and allocates less funding to more productive areas of expenditure. Reports indicate that the state announced freebies worth 8.6 percent of its own tax revenue in 2022-23. While these policies are well-intentioned, they underscore the economic challenges in creating productive employment opportunities on a scale sufficient to ease social pressures for financially strained states.

Conclusion:

The Rajasthan Minimum Guaranteed Income Bill 2023 and other associated measures reflect the government's commitment to building a comprehensive and inclusive social security net. However, addressing the challenges in implementing such policies and navigating fiscal constraints will be crucial for their successful implementation. Additionally, the focus should be on generating more employment opportunities, ensuring access to healthcare and education, and providing pathways for upward mobility, especially for those with lower skill levels.

Source : The Hindu