NEW DELHI: Nearly two months after India launched ‘the world’s biggest social security scheme’, doubts are creeping up on the workability of a programme to provide work for 25 million unemployed rural people. Several questions are cropping up. Has the National Rural Employment Guarantee (NREG) programme been able to halt migration from villages to cities? Is the money enough? Is the work going to the genuinely needy? How much corruption has crept in?
“Our feedback is that people are still migrating from the village where the programme was launched,” says Prof. Mahendra Dev of the Centre for Economic and Social Studies in Hyderabad city, capital of southern Andhra Pradesh state.
“We have also been told that many people still do not know about the scheme and that it needs more popularising,” Dev, who was involved in planning for the NREG, told IPS.
The programme was kicked off, on Feb 2, by Prime Minister Manmohan Singh — who leads the communist-backed, United Progress Alliance government — at a village called Bandameeda Palli in the impoverished Anantapur district of Andhra Pradesh. Simultaneously, it was launched in 200 of the most economically backward districts in the country — comprising roughly one-third of the geographical area of India (divided into nearly 600 districts).
The NREG aims at providing guaranteed employment for 100 days a year to one able-bodied member of each rural household that opts to do unskilled manual labour at a base wage of Rs60 a day, although this varies from state to state. In Andhra Pradesh, the minimum daily wage has been hiked to Rs80 (1.7 dollars).
At least one-fourth of more than a billion people living in India earn less than one US dollar (or roughly Rs45) a day, the internationally defined poverty line, largely for lack of job opportunities. This proportion could be as high as 30 per cent, according to the World Bank.
Says Ashwani Kumar, India’s junior minister for industry: “This is the single most revolutionary social welfare scheme anywhere in the world. The programme constitutes the largest initiative on job creation in modern history.” He adds that employment as a legally enforceable right has not yet been granted to citizens of any country. But the sheer scope of the programme makes implementation daunting.
“The population of the unemployed in India equals the population of the whole of Europe,” Kumar told IPS. Government spokespersons claims that the NREG could change the face of rural India if properly implemented. Provincial governments, ‘panchayati raj institutions’ or local bodies with elected representatives and non-government organisations (NGOs) are involved in the implementation.
In the annual Union Budget for 2005-2006, finance minister P. Chidambaram raised the allocation for implementing the NREG to Rs240 billion (5.3 billion dollars) although the amount could cost twice that figure annually once the scheme is implemented all over the country.
“The allocation may not be high but Chidambaram has said it will be demand-driven, which means that wherever funds are needed, money will be released,” says Dev. Provincial governments, that are already strapped for funds, would have to shell out 10 per cent of the programme’s total requirement of funds, while some of the resources would come from existing rural development schemes. For example, out of the 200 districts covered by the new programme, an existing food-for-work programme is already under implementation in 150 districts.
The NREG is to be extended to all the 600 districts in five years. The Act also provides for payment of an unemployment allowance if the government is unable to provide jobs. According to the 2001 census, 720 million people lived in rural areas and that the unemployment rate was 7.8 per cent. Absence of employment opportunities is the principal reason why many people migrate from rural to urban aresas.
One of the youngest countries in the world, close to two-thirds of the Indian population is under the age of 35. The country needs to create an estimated 60 million jobs over the next five years to prevent the current unemployment rate from worsening.
There has been considerable scepticism about the efficacy of the NREG. Says economist Omkar Goswami: “In principle, there is nothing wrong with this Keynesian kind of programme that seeks to create jobs while building the rural infrastructure, but there are at least three sets of problems. First, since the national exchequer is bone dry, any largesse would increase the country’s fiscal deficit with all its attendant problems.”
“The second set of constraints relates to the fact that most of the money for the programme would have to move from New Delhi to state capitals and thereon to district headquarters, by which time there would have been a hell of a lot of leakage,” Goswami told IPS.
He adds that the third problem related to India’s “woeful track record” in targeting subsidies to ensure that government funds reach those who need these the most.
“I don’t buy the line that numerous righteous NGOs using the Right to Information Act would be able to ensure that the funds meant for the rural employment guarantee scheme are properly utilised,” adds Goswami, former chief economist, Confederation of Indian Industry and currently chairman, CERG Advisory, a consulting firm. Sumir Lal, spokesperson of the World Bank in New Delhi, says the scheme has great potential but quickly adds that the “devil may lie in the detail”. He told IPS that four issues needed to be addressed:
“The wage rate should be such as to ensure that it is employment of the last resort so that there is self-selection by the poorest labourers and there is no withdrawal of skilled workers from existing jobs.”—Dawn/IPS News Service
