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Thursday, July 02, 2020

An open-ended, expanded employment guarantee at minimum wages should be its centrepiece

It is a cruel irony that after the sacrifice they have been asked to undertake, they don’t even get the safety of physical distancing. Workers have lost hard-won rights, despite labour being the biggest contributor to the Indian growth story.

Written by Nikhil Dey , Aruna Roy | Updated: May 1, 2020 9:34:12 am
Existing entitlements under MGNREGA need to be taken seriously. (Illustration: C R Sasi Kumar)

There are no labour-day rallies, celebrations or meetings this year as everyone is under lockdown, fighting the coronavirus through physical distancing. Nevertheless, it is a day for totting up what has been lost and what the future holds.

This has been a painful year for workers. The world has been turned upside down due to the global pandemic. Worse, however, for the millions of workers in India, was them being forced to stay in camps or cramped accommodation, foregoing the comfort of family, food, and mental peace. It is a cruel irony that after the sacrifice they have been asked to undertake, they don’t even get the safety of physical distancing. Workers have lost hard-won rights, despite labour being the biggest contributor to the Indian growth story. As they spend May 1 waiting to get home, the Central government that did so much to get Indians abroad back home has only just allowed migrant workers to go home, along with many conditions, leaving it to the states to facilitate their return.

Those who benefited most from this growth see this workforce in utilitarian, rather than human terms. The privileged must understand that if they do not want to be affected by impoverishment and insecurity that has afflicted these workers, a minimal level of livelihood security will have to be guaranteed to labour, farmers and workers in the informal sector. It is myopia of the worst sort to fight the spread of COVID-19 by wishing away a massive humanitarian crisis. The solution lies in assuring all Indians a measure of livelihood and income security.

This mandate can be met with a creative and expanded Employment Guarantee Act as a human response to this epidemic. Most countries have put together significant recovery packages of up to 10 per cent of their GDP and more. India has repackaged some existing entitlements, added a fraction of 1 per cent of GDP and offered that as a support to all its citizens for coping with the effects of a pandemic and a six-week lockdown imposed in an emergency-like scenario. There is no alternative to ensuring a regular cash flow to all those affected and the argument of cash transfers vs an expanded Employment Guarantee Act is that of dole vs work and dignity. Payment of part of the wages in subsidised foodgrain would be ideal for the 94 per cent of our workforce in the informal sector. It would provide work with dignity, and perhaps be the most inexpensive way to rebuild a shattered economy. Let’s look imaginatively at the employment guarantee measures that need to be undertaken.

To begin with, the existing entitlements under MGNREGA need to be taken seriously. Work must be “guaranteed” on demand. The government must put its own counsel to the private sector into practice and use the MGNREGA budget to pay full wages to all active job card holders during the lockdown. Under a legislation that is designed to provide livelihood security, workers were restricted by a lockdown backed by a strong legal mandate to stay indoors, with no exemption from the Ministry of Home Affairs for MGNREGA work. The Act even makes a provision for unemployment allowance, when the state cannot provide work.

MGNREGA has helped build rural infrastructure through approximately 10 crore families. But because of the superimposed resource constraints, many could not access the entitled 100 days of work. Migrant workers coming back home will swell the already desperate demand for work. The government has existing provisions for expanding MGNREGA work by another 50 days in situations of any calamity. The expansion of the Employment Guarantee Act must, therefore, be effective and open-ended. The 100 days per family must expand to allow access to any adult seeking any number of days of work during the period of recovery from the COVID crisis.

In fact, an Urban Employment Guarantee should also be put in place. The shock of the lockdown, and the loss of employment will be countered only with guaranteed tenure and security of income to help persuade workers to return to their former place of work. As industry revamps and struggles to restart, many casual, and even regular workers in various industries, will need fallback employment.

Apart from the regular public works which must continue with sufficient safety measures, home-based activities must be permitted in the expanded employment guarantee programme to enable “work from home” for this class of workers as well. Labour in their own farms and kitchen gardens can be used to expand productivity. Selected services, and production activities, such as making masks, soaps and sanitisers, will help deal with the challenge of COVID-19.

Following Kerala’s success, panchayats and local government units should be empowered and involved in dealing with this epidemic. This would also include providing resources and flexibility via a workforce paid through the expanded employment guarantee programme to address the manifold challenges of COVID-19. The elderly and the vulnerable are under acute threat, and children out of school could face greater malnutrition. The workers, with precautions, could be used judiciously to provide food and care-giving services for the needy.

What would the budget for this look like? Where will the money come from? In 1975, Maharashtra passed an employment guarantee law with no restrictions on the number of days or people. To fund this, the legislature identified four taxes: A professional tax on all salary earners, a tax on petrol, a sales tax surcharge and a tax on the income of three-crop irrigated farms to be put into a dedicated employment guarantee fund. As a consequence, Maharashtra always had enough money to implement the law. As experience has shown, eight hours of work at minimum wages are accessed only when other work opportunities dwindle. As and when the economy recovers, fewer workers will demand work.

The Maharashtra Act served as a model for the NREGA when it was enacted 30 years later. However, its innovative funding pattern was not adopted by the MGNREGA, and consequently, it has always been short-changed. This is despite a unique legal architecture of being demand-driven, and not budget constrained. The recovery package should contain a set of dedicated taxes for adding a special “Disaster Management Employment Guarantee Programme”. Perhaps we could start with a one or two per cent wealth tax so that some of the unequal distribution of the fruits of economic growth that has gone to the top 5 per cent in the country is used for serving the basic needs of those who contributed fundamentally to that growth.

The United States, not a model for its attitude to labour, addressed the financial crisis brought on by the Great Depression, when the then President, Franklin D Roosevelt, offered Americans a “New Deal” to fight the great depression with hope and solidarity and “cooperation” rather than “competition”. The centrepiece was a massive public works programme offering work at minimum wages to anyone who sought work. It not only helped build some of America’s great highways but also paid accomplished but impoverished artists for doing artwork in public places. Both the highways and the paintings remain of value to generations of Americans.

India urgently needs a New Deal of its own. An open-ended, creative, expanded employment guarantee at minimum wages, could be a centrepiece of that new deal.

May 1 is an important day to remember because it marks the “Haymarket” uprising that led to an eight-hour working day and a long and successful struggle for a more just and humane world. Hunger and indignity is a prescription for many uprisings. While these uprisings will bring about some form of change, they will not necessarily result in a solution that is of value to all. It would be wise if India’s rulers understand that. But it is even more important that the rest of us understand it and act with solidarity and cooperation.

The article was first published in the print by the title ‘The new deal India needs’ The writers work with the Mazdoor Kisan Shakti Sangathan (MKSS)

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