NO CAG PERFORMANCE AUDIT OF MGNREGA FOR 10 YEARS POSES SERIOUS QUESTIONS

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THE CONTEXT: The Comptroller and Auditor General (CAG) of India has not conducted a Union level performance audit of the implementation of the Mahatma Gandhi National Rural Employment Generation Act (MGNREGA) since 2013.

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• According to CAG reports available on its website, a performance audit of the implementation of the scheme, which guarantees 100 days of work to rural households every year, was last conducted in 2013.
• The scheme was taken up for audit by CAG at the national level in 2016, but not as a performance audit but only to examine the Social Audit Units.
• 2013 report was comprehensive and covered the MGNREGA’s implementation across the country.
  • There was a plan after that to cover the social impact of the scheme, which was done in the 2016 report. However, after that, there has been no elaborate report on MGNREGA.

MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE ACT (MGNREGA)

• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), also known as Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is a legislation enacted on August 25, 2005.
• MGNREGA guarantees hundred days of wage employment in a financial year, to a rural household whose adult members volunteer to do unskilled manual work.
• MGNREGA focuses on the economic and social empowerment of women.
• Social Audit of MGNREGA works is mandatory, which lends to accountability and transparency.
• The scheme now covers 648 Districts, 6,849 Blocks and 2,50,441 Gram Panchayats in the financial year 2015-16.

MGNREGA’s shrinking budget:

• It initially came into force in 200 districts from February 2, 2006, and was expanded to cover all rural areas by April 1, 2008.
• The scheme is implemented by the Department of Rural Development under the Ministry of Rural Development.
• According to an analysis by PRS Legislative Research, in 2023-24, MGNREGS (38%) gets the highest budgetary allocation in the department’s accounting.
  • The rural development department also implements other major social sector schemes such as Pradhan Mantri Gram Sadak Yojana (PMGSY) and Pradhan Mantri Awas Yojana-Gramin (PMAY-G).
• In the 2023 budget, the MGNREGS was allocated Rs 60,000 crore. Concerns have been raised that the allocation to the MGNREGS has declined by 33% as compared to the revised estimates of 2022-23.

Union-level CAG reports on MGNREGA:

• CAG’s 2013 report covered the period from April 2007 to March 2012.
• The first performance audit of the scheme was undertaken in 2007-08 and covered the period from February 2006 to March 2007.
• The 2013 report noted that there had been a “significant decline” in per rural household employment generation in the previous two years and a “substantial decline” in the proportion of work completed.
• The 2016 report examined the functioning of Social Audit Units under MGNREGA.
  • This report noted several irregularities including that SAU had not been set up in seven states, while in eight states they were set up but not functional.
• Social audit is mandated under the Mahatma Gandhi National Rural Employment Guarantee Audit of Schemes Rules, 2011.
  • The rules were framed by the Ministry of Rural Development in consultation with CAG.
  • The rules provide for the state government to facilitate identification and creation of independent organisations i.e., Social Audit Units (SAU), process of conducting these audits and obligations of persons related to the audits.

WHY CAG AUDIT REPORTS ARE IMPORTANT?

• As a constitutional authority, CAG is the sole authority that the constitution entrusts the responsibility of auditing the accounts of the Union and state governments.
• CAG’s performance audits examine the extent to which an activity, programme or organisation operates economically, efficiently, and effectively.
• CAG presented twelve reports that revealed corruption and irregularities in the functioning of several Union government ministries and departments.

ISSUES

Lack of accountability: There needs to be   accountability at the moment for the person who is supposed to be the chief accountability officer.

• The CAG is an external auditor and can only give his opinion.
• The government has internal auditors in the form of the CAG (Controller General of Accounts who is responsible for exchequer control and internal audits of the Union government).

Non-release of MGNREGA funds: Several oppositions-ruled states like West Bengal have accused the Union government of non-release of MGNREGA funds.

• In August, the rural development ministry informed parliament that the Union government has pending payments under the wage component for 18 States and Union Territories.
• Of this, it owes the highest amounts to opposition ruled states: Rs 2,770 crore is owed to West Bengal, followed by Rajasthan (Rs 979 crore) and Bihar (Rs 669 crore).

Other centrally sponsored schemes: Other centrally sponsored schemes that have not been audited since 2018 reportedly include the Pradhan Mantri Awas Yojana (PMAY), the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the PM Jal Jeevan Mission (PMJJM).

WAY FORWARD

Social auditing mechanism robust: According to the Kerala’s Rural Development Minister, they have taken a host of measures to make their social auditing mechanism robust.

• Including holding periodic panchayat-level public hearings where all stakeholders participate.
• Kerala has a healthy culture of people’s participation in governance.

Assessment of audit risks: Taking up a Performance Audit for a CAG  report depends on the assessment of audit risks because the audit department has limited resources while the audit mandate is vast. So, audit resource deployment depends on risk assessment.

Tackle diversion of funds: Management Information System (MIS) done by the Rural Development Ministry to digitise the scheme, as well as bringing in direct benefit transfer (DBT) to beneficiaries to tackle diversion of funds have helped to substantially mitigate audit risks.

Methodology of risk analysis:  The CAG  should present his methodology of risk analysis through which he deploys his resources to various audit concerns.

CONCLUSION:

Performance audits can promote transparency and accountability in the implementation of MGNREGA. This can build public trust in the program and ensure that it is being implemented in a fair and equitable manner.

PREVIOUS YEAR QUESTION:

Q) Exercise of CAG’s powers in relation to the accounts of the Union and the States is derived from Article 149 of the Indian Constitution. Discuss whether audit of the Government’s Policy implementation could amount to overstepping its own (CAG) jurisdiction. (2016)

MAINS PRACTICE QUESTION:

Q) Examine the role of CAG in conducting the performance audit of developmental schemes.

SOURCE: No CAG Performance Audit of MGNREGA for 10 Years Poses Serious Questions (thewire.in)