Work is worship

According to the World Bank, almost 30 per cent of the Indian population is living on less than 1 a day, and the percentage of rural povert...

According to the World Bank, almost 30 per cent of the Indian population is living on less than 1 a day, and the percentage of rural poverty is likely to be much higher. While there have been many attempts to combat poverty, their limited success implies that we need a new and innovative strategy. The National Rural Employment Guarantee Act may be just what we need. It certainly has the potential to improve the livelihood of millions of rural poor, but the Government must take some steps to ensure that this programme does not become yet another chapter in India8217;s history of unfulfilled promises.

A National Rural Employment Guarantee Act which guarantees 100 days of employment to every household could go a long way in reducing rural underemployment, an important contributing factor in rural poverty. Some critics, such as Surjit Bhalla, point to the official rural unemployment estimates of less than 3 per cent in 1999 to support the claim that rural unemployment is not a serious concern in the context of rural poverty. But such an argument is clearly flawed. First, it overlooks that these statistics are misleading, as there is significant disguised unemployment due to low workforce participation rates and chronic underemployment during slack agricultural seasons. More significantly, as studies of the Maharashtra Employment Guarantee Scheme have documented, participation in such schemes does indeed replace unemployment.

Another issue of concern among critics is whether the programme will be effective in targeting the poor and not be captured by relatively wealthier households. Employment schemes, however, are generally relatively well-targeted, due to low wages and the unpleasant nature of the work. Indeed, evidence from Maharashtra supports this.

The potential benefits for rural welfare as a result of an employment guarantee scheme are huge. The work involved in the programme would build infrastructure, such as roads, irrigation, health facilities etc. This could help reverse the recent neglect of rural infrastructure and be a crucial part of regenerating the rural economy. Providing employment would have a beneficial impact on health, education and other determinants of social welfare by breaking the cycle of rural poverty. There may also be indirect benefits if more women are given the opportunity to work, as higher levels of female labour force participation are associated with lower infant mortality rates and higher primary school enrolment rates, for example. The revival of rural employment opportunities would reduce migration to urban centres, and help ease problems in these areas.

Finally, the introduction of an employment guarantee act which establishes employment as a right would give greater bargaining power to traditionally disadvantaged groups and lead to greater mobilisation of the rural poor.

The main criticism of the National Rural Employment Guarantee Act is that it would cost too much. It is estimated to cost between Rs 30,000 and Rs 50,000 crores annually, which is less than 2 per cent of the GDP. Given that the new government was elected on a platform of doing more for the 8216;aam aadmi8217;, this should clearly be a priority. To argue that the Government lacks the funds is not acceptable. There is gross mismanagement of resources at all levels. For instance, fertiliser subsidies are known to be poorly targeted, as they primarily benefit higher-income farmers.

A limitation to the success of the programme is naturally corruption. In his oft-repeated statement on corruption, Rajiv Gandhi noted that only 15 paise out of every rupee allocated for a programme actually reached the beneficiary.

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Not only must the Government introduce an employment guarantee but also put its support behind a strong Right to Information Act. There are examples from Rajasthan, which passed a Right to Information Act in 2000, of citizens using it to conduct public hearings of panchayat officers accused of corruption.

In addition, the draft of the National Rural Employment Guarantee Act currently under consideration is a diluted version, which limits the guarantee to a few chosen districts without setting a time frame for a nationwide employment guarantee. Only if employment is a nationwide guarantee can we expect to observe many of the benefits. Nor does the Act ensure that a minimum percentage of workers in each block would be women. This last point is particularly worrying when considered alongside the restriction to 100 days of work per household, as it would inevitably result in households sending only the men to work. If this indicates a lack of political will, the programme risks becoming yet another failed rural employment expansion scheme.

The Indian Government is at a crossroads right now. It can either put full political support behind the National Rural Employment Guarantee Act, or it can continue to 8216;dilute8217; the National Advisory Council8217;s draft and make only a half-hearted attempt to deal with the issues at hand. By ignoring basic provisions of the council8217;s draft, the Government is essentially choosing the second option. This must not be allowed to occur.

The writers are students at Harvard University