Poor empowered by Professionalisation of NREGA schemes

MUMBAI
Posted on 2008-12-29
Notwithstanding many shortcomings as pointed out by the parliamentary committee the National Rural Employment Guarantee Act (NREGA) deserves our interest and support for various reasons, not the least for its potential to transform rural governance and empower the poor through new standards of transparency and accountability. These standards stand to benefit rural development programmes and services generally, if they can be implemented.
An immediate benefit of NREGA is the social security it provides in a country in which income distribution has been growing steadily worse and there is no unemployment insurance. It has reduced hunger and distress migration, and raised agricultural wages through the alternative it provides to farm labour. Because work norms under NREGA are structured to encourage the engagement of women and the elderly, 44 per cent of the employment provided in 2007-08 has gone to women. These are very real benefits.
The fiscal costs of NREGA have been estimated by Mihir Shah and his colleagues (EPW, February 23, 2008) at about Rs 50,000 crore, assuming that 80 per cent of all rural labour households demand work for the full 100 days permissible at present. This assumption may be an overestimate for the states, and some regions even in relatively poor states, such as western UP and coastal Andhra, where the demand for work under NREGA has been low. On the other hand there are other regions where a high proportion of participating households have hit the ceiling of 100 days (such as drought prone southern Rajasthan) and are clamoring for more work. Thus if the ceiling is removed in a couple of years, and the programme eschews targets as it is supposed to, being an open-ended demand-driven programme that is allowed to find its own level, the estimate of Rs 50,000 crore may not be far off. Leaving aside the consideration that since many workers are unemployed during the slack season when the bulk of NREGA work is done, and therefore the wage component of expenditure on the programme is not a real “resource” cost (since the opportunity cost of their wages in terms of work forgone elsewhere is zero, unlike expenditure on the materials component) but is more in the nature of a transfer payment, how is this cost to be met?
The answer is indirectly, through the enhanced rural productivity engendered by the programme itself. NREGA seeks not only to provide guaranteed employment, but to do so through works that will enhance the productive base of agriculture and of the rural economy generally through water harvesting and soil conservation, improved rural connectivity, forestry and pasture development, drainage and flood control works, and so on. It is essential, therefore, that the works be productive. Surveys show that by and large villagers perceive NREGA works to be useful. This is not surprising since they are chosen mostly by the gram sabhas themselves. In the undulating arid and semi-arid parts of the country where a large part of the poor population is concentrated there would appear to be almost limitless scope for watershed development through check dams, contour bonding, contour trenches, and levelling, fodder and fuel tree plantation and other useful works.
However, in the intensively cultivated, irrigated, and mostly plains areas of the country where there is little scope for watershed development and forestry, and where a great deal of rural infrastructure such as roads, irrigation canals and drains have already been constructed, there are increasing reports from the field that the scope for further works is getting “exhausted”. After all, rural works programmes have been running for a couple of decades by no. This, coupled with the pressure imposed by the requirement that work must be provided within 14 days and within 5 km, leads often to the taking up of works in inappropriate locations (tanks on high ground which cannot fill up in the monsoons) or of a repetitive nature (throwing earth on the same road again and again).
The panchayats, which have to implement 50 per cent of NREGA works, also suffer from serious shortages of staff and staff capacity. NREGA places a huge additional organisational burden on them in terms of registering households, identifying works, monitoring their implementation, organising timely wage payments and so on. Most programmes allow up to 10 per cent to be spent on administrative and management costs. It is a false economy not to do so in the case of NREGA, and it could affect the whole cost-benefit calculus of the programme. INAV