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Employment guarantee — MPs lead the way

Mihir Shah

The parliamentary standing committee favours a universal, self-targeting employment guarantee.

ON DECEMBER 23, 2004, the National Rural Employment Guarantee Bill (NREGB) was referred to the Standing Committee on Rural Development, whose final report has now been placed before Parliament. The report represents a triumph of sorts for Indian democracy. The process that began with the Lok Sabha verdict of 2004 appears to be moving forward, albeit with many twists and turns. The forgotten people of India, living in remote hinterlands, have begun to be heard. While the committee deliberated the bill, the voice of these people echoed during the Rozgar Adhikar Yatra that criss-crossed ten States in May-June 2005. Cutting across party lines, 31 MPs comprising the committee have shown great sensitivity in listening to India's deprived and unemployed, who are yet to find a place in the "new economy."

The most important suggestion the committee makes is that employment guarantee must not be restricted to those below the official poverty line (BPL). It favours a universal, self-targeting guarantee, ensured by the nature of the work to be done and the wage to be provided for it. As the committee observes, the "BPL concept is defective. As per the directions of the Planning Commission an arbitrary cut-off limit has been imposed, according to which the number of BPL persons identified should not exceed those as per the 1999-2000 survey." The MPs do not like the idea of the Planning Commission pre-deciding the number of poor people in the country. And then using that number to decide who will be eligible for employment guarantee. They also add that the guarantee should be not to a household but to each worker. In one stroke this reduces possible gender discrimination, lowers administrative costs, and the scope for corruption.

In its present form, a key weakness of the NREGB is that the guarantee it provides can be "switched off" at will by the Government. The committee says that once enacted in an area, the legislation should not be withdrawn at the discretion of the Central or State Government without prior approval by Parliament. The NREGB at present contains no specified time-schedule for its extension to all rural areas of the country. The Standing Committee has prescribed a time-limit of four years to coincide with the term of the 14th Lok Sabha.

Weakest part

In view of the well-known objections of the Finance Ministry to the financial burden of the NREGB, it is unfortunate that the section on "Financial Implication" remains the weakest part of the committee's report. In their calculations, the MPs retain the BPL condition. No estimate is attempted of the financial implications of a universal, worker-based guarantee.

The legislation is likely to now go through Parliament. A beginning will be made, most probably in the 150 most backward districts identified by the Planning Commission. But the issue will finally boil down to the speed with which the guarantee can be extended to the entire country. That is where pressure can be expected from the Finance Ministry for a slowdown. Given the way the tax-GDP ratio has moved in recent years, fiscal concerns are likely to mount.

Moving slowly forward, in the initial teething years, may not be such a bad idea. Given the dismal experience of employment programmes in India so far, it may be advisable to make the programme really work in the initial bunch of districts before extending it further.

For two main reasons. One, great care has to be taken to ensure that the money spent under the programme is well-directed. We need to increase the labour-supporting capacity of India's small farms through massive rainwater harvesting, soil conservation, and treatment of their catchment areas. Such public investment will also fuel successive rounds of private investment, creating secondary employment opportunities. Not just relief in times of distress, but a real movement towards long-term drought- and flood-proofing of Indian agriculture. This would make the employment guarantee truly sustainable in both environmental and fiscal terms. It will fuel growth and actually help lower the fiscal deficit. For as incomes rise, so would government revenues.

Two, we have to ensure that institutional mechanisms are in place to check rampant corruption that has plagued employment programmes in India. Hundreds of thousands of crores over the last several decades have gone down the drain or lined various pockets. We need strong social audit mechanisms and penalties to check these malpractices. The Standing Committee has done its part in strengthening many of these provisions in the NREGB. The MPs emphasise the role of the gram sabha in social audit. Even with these provisions in place, however, a great deal of work remains to be done at the grassroots to ensure effective implementation of the Act.

The gram sabha is a deeply divided body in most (even tribal) parts of the country and has not shown any spontaneous inclination to even meet, let alone transact the difficult business of ensuring transparency, accountability or equity. Several years of social mobilisation by grassroots organisations in favour of women, Dalits, Adivasis, and the poor is required for them to become effective assemblies of the public will. Rather than supporting such initiatives the state has tended to view them with hostility.

State facilitation needs to be embodied in an institutional structure that enables participatory planning of works under the employment guarantee programme as also their regular monitoring. This remains a big gaping hole in the programme. It needs urgent filling.

(The writer represents a grassroots network implementing employment programmes for water and food security across half a million acres in tribal, central India.)

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