No guarantees

The National Rural Employment Guarantee Scheme was conceived as the UPA government8217;s showpiece initiative to connect meaningfully with the aam aadmi. But, as detailed in this newspaper, the draft audit report on the performance of NREGS shows instances of corruption and inefficiency in its implementation. As one of the UPA8217;s biggest social sector programmes, the scheme now covers 330 districts and has a budgeted expenditure of Rs 12,000 crore. However, the audit report shows that barely 3.2 per cent of the registered households could avail themselves of 100 days of employment in one year, between February 2006 and March 2007. The average employment provided under the scheme was just 18 days. As against the government8217;s intention to provide an average income of about Rs 8000 per annum, rural households, on an average, received less than Rs 1500 a year. Also, 14 states did not have proper records. In 11 states workers were paid wages lower than the minimum wage rate while in some of the poorest states funds were diverted to other uses.

The main cause of failure of the NREGS was poor governance. According to the audit, the key reasons behind the mismanagement: deficient financial management and tracking system, inadequate and delayed planning of the works. The CAG8217;s final report may carry some correctives, but the general failure is clear. This is not surprising since the NREGS was implemented without making any serious attempt to learn lessons from previous schemes. Poor implementation has become a feature of almost all government spending programmes. In this one especially 8212; since the states were spending money coming from the Centre and on which there was no real cap, as the system was demand-based 8212; the only incentives for good implementation were local political pressure and the honesty of the bureaucracy.

Will the UPA gain politically from the NREGS? Strange as it may sound, as our report indicates, the Congress-ruled states have fallen behind others in the implementation of the scheme. They failed to formulate rules or set up a state employment guarantee council on time. It is therefore unlikely that the Congress will gain at the state level from the NREGS. Since implementation is done at the state level when non-Congress states implement the NREGS well, voters are unlikely to credit the Congress at the Centre for the scheme. The benefit in terms of an effective anti-poverty scheme has been, as we see in the audit, limited.