EGA: Needed, a govt guarantee Act

The single most important promise made by the Congress manifesto and the Common Minimum Programme was an EGA that would guarantee at least 100 days of casual manual work at minimum wages for anyone who applies for work within a specified time frame. If the work is not provided within 15 days, the Government is liable to pay an unemployment allowance till work is given. The tabling of the NREGA 2004 in Parliament on December 21, 2004, was a positive signal that the UPA Government was responsive to the popular mandate.

However, in its present form, the Bill is highly inadequate and less then the minimum expected. The main shortcoming is that it is not universal in terms of people, gender and districts. It is in effect a targeted scheme, which can move from district to district at the discretion of the Government.

The restrictive nature of the Act is evident from the exclusion of urban areas, targeting of below poverty line households, open-ended and broad definition of the household, and no safeguards for women’s entitlements. Invariably, guarantees fixed at the household rather than individual level tend to exclude women and push them further into lowly paid arduous work. There is no time-bound commitment to extend coverage to the entire country. The current Act enables the Government to notify it in such areas and for such periods as it considers appropriate. Even within the rural ambit of these districts, not all households are covered; only those identified as officially poor can avail of the job guarantee as opposed to self-selection, that is, to say anybody who is able and willing to work.

The foremost area of concern relates to minimum wages. The Act states that notwithstanding anything in the Minimum Wages Act, the Government can fix its own wage for this programme and until such time as a wage rate is fixed by the Central Government, the minimum wage fixed by the state government shall be considered as the wage rate applicable to that area. However, in the absence of minimum wages it may turn out to be less effective than even the centrally sponsored poverty alleviation schemes where at least minimum wages are protected, in principle if not in fact.

The restrictive nature of this Act flows directly from the worry that there is not enough money to finance the scheme plus the Government must adhere to a ceiling on fiscal deficit. Most estimates of the likely costs of such a guarantee, including the Government’s own estimate, place these at less than 1.5 per cent of GDP. But the Central Government has already given away nearly three times that amount in tax breaks over the past decade.

The social benefits of a universal time-bound employment guarantee greatly outweigh the potential difficulties. If the Government has understood the lessons of the last election, it must bring in a much larger employment programme which can set in train processes that would work ultimately to the advantage of the rural poor and the regeneration of the rural economy. If properly implemented it will be one of the most significant pieces of legislation since Independence, which can go a long way in bridging the gap between political and economic equality and the problems of legitimacy of political authority that this creates.

The dilution of the employment guarantee scheme has raised two key issues about our democratic political system: one, the process of economic policy making, and second, the principles of democratic accountability. The economic policy processes seem to bear no relationship with political processes and electoral mandates that represent the aspirations of the people with regard to their basic needs. This is in part due to the insulation of economic policy making from the political process and popular pressures since economic liberalisation, and in part due to the high degree of centralisation of decision-making on economic policy. This is evident from the fact that the National Advisory Council draft had emerged from a broad-based consultation process and therefore represented a more democratic exercise, whereas the Government has diluted its key features.

The second crucial question is democratic accountability. This is especially important in a context where the popular rhetoric of decentralisation and transparency creates the impression of greater democratisation and accountability. Politicians and ruling alliances are accountable for their performance in the next election and yet it is puzzling that an elected government does not give adequate priority to livelihood issues of the most vulnerable citizens who turn out to vote in much larger numbers than the upper and middle classes. But in a political democracy the policies of the Government after the elections must have some resonance with the political assurances given to the people during the elections. The opposition to the EGA from within the key institutions of the Central Government raises a legitimate question as to why the common people in a democracy should accept a ruling alliance that does not fulfill its basic commitments. Unless the UPA Government breaks away from the economic policies followed by the previous government, we are likely to be stuck with a two-track democracy, one that offers economic and political benefits to the elite, and the other striving for development for the common people, which seems to acquire salience only during elections.

The EGA presents a historic opportunity for the UPA to fulfill its political mandate and justify the promises made in the CMP.

The writer is professor, Centre for Political Studies, at Jawaharlal Nehru University