What is your take on NREGA?

polity :What-is-your-take-on-NREGA-1

Answer by Makarand Sahasrabuddhe:

Alert – Long answer in 4 parts

  1. What is NREGA and how did it come about?
  2. What are the positives?
  3. What are the lacunae – structural and implementation related?
  4. What is my overall opinion about the NREGA?

The National Rural Employment Guarantee Act (NREGA) came into being on the 7th of September 2005. It was intended to address a chronic problem in India; the endemic issue of unemployment and underemployment in rural India. This un/under employment causes forced migration, some temporary and / or seasonal and the rest permanent, from rural areas to the urban centres. With forced migration comes debt, economic bondage and a poverty trap.

Through the NREGA, Government guarantees at least one hundred days of wage employment in every financial year to every household whose adult members volunteer to do semi/un-skilled manual work. The Act is loosely (there are important differences) modeled on the landmark  Employment Guarantee Scheme in Maharashtra.   This is probably one of the most widely studied safety net program in the world.
 
What does the Act entail?
 
The explicitly stated objective of the Act is the ‘Creation of durable assets and strengthening the livelihood resource base of the rural poor’. The Act directs all state governments to develop appropriate scheme for its implementation, establish systems and take adequate administrative safeguards to prevent misuse.
 

  • The Act guarantees 100 days of work for every household. It specifies minimum wages that will be paid. In the Maharashtra EGS the wages would be pegged to just below market rates to ensure self-targeting.
  • NREGA lays  special emphasis on the poorest of poor and women who, the Act specifies, must form at least 1/3rd of the beneficiaries.
  • The Act specifies that at least 14 continuous days of work must be created.
  • It also lists out in detail the facilities like crèches, drinking water, medical facilities, insurance cover for labourers etc.
  • An interesting provision is an unemployment allowance for those who cannot be provided work in spite of a proper demand being made. The unemployment allowance has been pegged at 1/4th the wage rate for the first 30 days and then ½ the wage rate for the remaining period.

What are the positives?

  • The advantages of the Act are evident. There have been myriad schemes in implementation for the providing employment to the poor. However, these have been more like handouts. The NREGA is not dole. It is an indication of the government accepting it’s duty to provide employment to the poor. It is saying that the poor have a right to be employed and that the State guarantees and reaffirms this right.
  • For the millions of poor who have to migrate in search of work, this Act will be a relief. At least 100 days of employment can be obtained per family in non-agriculture season. A situation has been created where a family can hope to get employment for 8 months a year; 4 in the agricultural season and 4 through the NREGA.
  • The Act further specifies that the work generated will focus on creation of durable assets and strengthening the livelihood base in rural areas. Apart from water conservation, drought proofing, afforestation, tree plantation and other works on public spaces, there is provision for developing irrigation facility on land owned by households belonging to SC/ST or those beneficiaries under the Indira Awas Yojana. That means that even marginal and small farmers (most SC / ST land holders fall into this category) can hope to develop irrigation facilities on their lands.

So far sounds good. Does it not?


What are the lacunae?

  • The opening line in the Act says at least 100 days giving rise to a feeling that more work is possible. The finer print of the text (Schedule II clause 5) however dispels all hope and mentions clearly that a household can expect a maximum of 100 days of work in a financial year.
  • 100 days of work is assured for a household  defined as the members of a family related to each other by blood, marriage or adoption and normally residing together and sharing meals or holding a common ration card.   The Maharashtra EGS has no such limitation and is focused on individuals.
  • The Act says that ‘As far as practicable, a task funded under the Scheme shall be performed by using manual labour and not machines’. Now this is a statement that leaves itself wide open to (mis)interpretation. Who is to determine what is practicable? What are the mechanisms of determining that? How does one prevent corruption and overuse of machines under the guise of practicability. In Maharashtra I have seen see rich JCB owners getting paid while poor labourers stay idle. 
  • The central and state government is to make budgetary provisions for the implementation of the Act. Now given the history of consistency of support to development programmes, this is scary. What happens if economic or political compulsions change priorities? Should we then allow this Act to meet the same fate as thousands of other schemes which are announced but never budgeted for? This is roughly what is happening now with a change in governmental priorities. The Maharashtra EGS is financed through professional taxes and other allied revenue streams. Every year more funds are raised than spent. The Act is so tightly worded that no one has been able to break it and use the funds in some other way.
  • One of the biggest lacuna is that work is to be demanded by developing projects at the village level. The Act clearly states that the Gram Panchayat shall be responsible for identification of the of the Gram projects in the Gram Panchayat area to be taken up under a Scheme as per the Panchayats’ recommendations of the Gram Sabha and the Ward Sabhas and for executing and supervising such works. The intent was clear – to create long term assets. However, the implementation has clearly not been though through.   Given the state of the capacities of the Panchayat and the poor in these, it was unrealistic to expect that the Panchayat would plan? This led to, as I saw myself in Madhya Pradesh and Chattisgarh,  middlemen coming into the picture and a backyard industry coming up for ‘developing gram projects’. 

These were structural issues. 

  • On the implementation side was the issue of corruption.    In several cases we have seen ghost workers, unseen work and money just being siphoned off with those involved splitting up the proceeds.
  • There has been criticism that NREGA has ensured that farmers, especially in Kerala and Tamil Nadu,  can no longer access farm labour – this is bullshit, to put it mildly. the truth is that farmers can no longer access farm labour at exploitative wage rates.

All the criticism of NREGA is very valid. 

In spite of all of it – I would still continue with NREGA in the immediate future.  It is offering relief to the millions of suffering poor in the country. It must be seen in that light and put to use. It is meant to be a safety net and that consideration MUST be primary. We need to remember though that this is a temporary solution for most of the poor.  After all why should the poor be expected to live on some sharecropping, some private labour and labour under the NREGA which will fetch them INR. 10-15000/- per year per family? Why should they not be looking at sustainable livelihood mechanisms that will enable them to stay clear from the dole?
 
At the end of the day, there is something undignified about being beneficiaries of a government scheme. Ask a woman who is a beneficiary of the Sanjay Gandhi Niradhar Yojana whether she is happy and the answer will always be NO. She would rather have a source of livelihood or a family support mechanism that allows her to live with dignity. Let us not forget that life with dignity for all should be our ultimate goal.

What is your take on NREGA?

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