THE STATES

Undermining a scheme

LYLA BAVADAM

A petition before the Bombay High Court alleges that the Maharashtra government has been diverting to other areas funds meant for the Employment Guarantee Scheme, which has made the right to work a part of state policy.

LYLA BAVADAM

At a village in Dhule district. Launched in 1972, the Employment Guarantee Scheme is aimed at providing employment to the rural poor and creating durable community assets.

MAHARASHTRA'S Employment Guarantee Scheme (EGS) is applauded as it is seen as proof that the State government has made the right to work a part of state policy. However, a petition filed with the Aurangabad Bench of the Bombay High Court in December 2002 says that the Maharashtra Employment Guarantee Act, 1977, is not being implemented in spirit or in letter.

The petition, filed by H.M. Desarda, a former member of the Planning Commission, says that for the past three years the State has not been contributing its share to the Employment Fund. The petition also says that the State has been diverting funds meant for the EGS. Describing the functioning of the EGS, Desarda says that "there is proof of money spent but little proof of creation of physical and necessary assets or diminishing vulnerability of the poor".

The EGS was created in 1972 after the State's worst famine in recent history. It was set up with the intention of ensuring the well-being of the State's poorest people by providing them employment and an opportunity to earn an income. The main aim is to provide employment and create durable community assets. Thus public funds are used ultimately for the cause of public welfare. In order to raise resources for the scheme, the State established the Employment Guarantee Fund, which would receive the net proceeds of a variety of taxes including professional tax and the additional tax on motor vehicles. The State government makes a contribution that is equivalent to the net collection of the taxes.

Desarda's petition says that in the past 25 years the State government has not spent the full amount that was collected in the EGF. The petition reads: "During the past three years it has spent less than 50 per cent of the professional tax proceeds. That means that the State government has diverted Rs.1,500 crores from the professional tax to the general budgets. If we take into account the State's matching contribution, which should have accrued to the Employment Fund, then the amount diverted becomes Rs.4,500 crores. This is a fraud played by the State which directly affects the rural poor."

During the current financial year the State is scheduled to collect Rs.1,404 crores in the fund. With its obligatory matching contribution the total funds available for EGS works should rise to Rs.2,808 crores. But the bankrupt situation in the treasury makes it unlikely that the State will deposit its share. The State also receives about Rs.800 crores as its share of the allocation under the Centrally designed employment assurance, watershed and drought-prone areas programme. Over and above this, the State is eligible for food aid to run the food-for-work programme. Thus the total amount available to the fund is close to Rs.4,000 crores annually.

In its response to the petition, the government has disputed the use of the word `diversion' claiming that it is "general practice" for surplus funds to be treated as non-interest-bearing loans to the government. The lack of a specially earmarked EGS fund makes it possible to disperse EGS money easily for various other programmes. In fact, one of the reforms suggested in Desarda's petition is that a mechanism be created to ensure that the fund is strictly used for the purpose for which it was constituted.

Arun Bhatia, a retired bureaucrat whose report on malnutrition deaths in tribal districts lambasted the EGS, says: "The diversion of funds cannot be made a significant issue unless it is also shown that there was a demand for work and the government failed to provide work. The government can and will say that there have always been enough funds in the EGS to meet the demand for employment. I have pointed out examples of work not provided in poor areas with chronic malnutrition, where there was a demand for work, as in Thane district, for example. In these areas people used to migrate for work and place themselves at the mercy of labour contractors. The petition should use these examples to show that the demand for work has not been satisfied and the claim of the government is false."

In its first response to the petition the government referred to the charges as "the personal perception of the petitioner" and sought its dismissal. When the Bombay High Court refused to grant that, the government filed another reply in which it said it "intends to make requisite matching contribution to the Employment Guarantee Fund over ten years", thereby expressing its culpability. However, the rest of the petition, which deals with the State's misunderstanding of the EGS ethos, is still rejected by the State.

The major focus of works under the EGS is supposed to be soil and water conservation, but it is unfortunately deployed as a fire-fighting stratagem instead of a long-term plan to counter man-made droughts. Instead of implementing the principles of watershed management and micro-management of the local environment, the State government has diffused the programme into schemes of "dubious merit with the result that it has become a paper programme of siphoning off money without actual physical work of any kind on land".

Ironically, proof of this is seen in the Maharashtra Human Development Report, 2002. In the chapter on planning, there are numerous examples of "the creation of durable community assets not satisfactorily fulfilled", "wasteful capital expenditure" and "unfruitful expenditure". Desarda says that instead of implementing small EGS works using already existing administrative infrastructure, the government is unnecessarily creating multiple agencies. He says, "The notorious example is the creation of the five river valley irrigation corporations. There was no need for them or for the gigantic projects they represent if EGS works were consistently applied every season." Desarda says that the State's "fiscal profligacy" has resulted in the "shrinking of the employment fund and hence curtailment of the employment, which is crucial for arresting the degradation of resources on account of soil erosion, depletion of vegetation cover and excessive run-off which is the root cause of water scarcity." Thus, state neglect has resulted in further degradation of land thereby increasing the chances of further man-made droughts. Erroneous policies are to blame for this.

Maharashtra has 40 per cent of the country's dams yet the canal-irrigated area is just 5 per cent. "Money going to large irrigation projects is zero gain," says Desarda. "The best alternative is watershed development. There are 60,000 micro watersheds in the State. Proper bunding and aforestation will bring results in one season. Conservation is integral to the EGS, especially since 65 per cent of the State's population is still dependent on agriculture and 90 per cent of the farmers have no access to irrigation. The funds are enough to drought-proof Maharashtra."

Says Bhatia: "It cannot be said that assets have not been created. The government can easily give a list of thousands of irrigation and percolation tanks, roads, small dams, areas where trees have been planted, village roads, contour bunds and so on. What can be proved is that all the assets shown on paper have not been actually created because of corruption. But corruption is a word that people do not like to use. To some extent it is understandable because the system is diabolical and people fear it... There are numerous documented examples of bogus works... and of corruption cases in the EGS and related schemes of the government."

Consider these facts. Two-thirds of the State's geographical area, that is, about 10 million hectares of forest and fallow land and another 10 million of cultivated land is exposed to increasing levels of soil erosion. On an annual basis, less than one lakh hectares receive protection against erosion. Independent studies in different areas of Maharashtra have estimated that there is a loss of up to 39 tonnes of soil a hectare. Out of the 356 tehsil blocks in the 35 districts, 352 had rainfall of more than 250 mm last year. Had water been properly impounded, there would have been no shortage of water. The government has so far spent over Rs.25,000 crores on drinking water schemes and Rs.35,000 crores on irrigation projects, but still there is water scarcity. Last year 200 towns and 30,000 villages in the State faced severe water shortage. Eighty per cent of the State's population does not get clean drinking water. Until the early 1970s, there was no dearth of water in the aquifers. As the forest cover depleted, the aquifers were not replenished. Now, borewells go as deep as 1,000 feet (300 metres) and often there is still no water. The annual rainfall is the same. It is the land's water retention power that has diminished. Rivers that used to flow for seven months of the year now flow only if it rains. Tree cover is now less than 8 per cent in the State, whereas it should be at least 33 per cent in every micro watershed. Ten districts have less than 1 per cent forest cover and four have less than 2 per cent.

Mahabaleshwar, a region that receives 3,000 mm of rainfall now receives scanty rainfall as the surrounding forests have been destroyed. Sand mining from the rivers has damaged river morphology and changed the ecology of the entire region. Obviously, all this is compounding the problems of poverty and resource degradation. A review committee has been constituted to modify the Maharashtra Employment Guarantee Act, and though Desarda is a member of it he asserts that "the State is trying to sabotage the EGS. It is a case of chicken-and-egg syndrome. There is no money in EGS and so the government throws up its hands and says it cannot provide employment."

Giving credence to these facts are the concluding remarks in Chapter 3 of the Maharashtra Human Development Report, 2002, which says: "Constant decline in labour attendance over the years points to less demand for employment under the EGS from rural population. A large percentage of works that had started under the scheme remain incomplete owing to non-availability of labourers. These facts indicate a substantial change in the agrarian profile of the State since the inception of the scheme in 1972. The requirement of funds to continue with the scheme also appears to be much less than the annual accumulation in the Employment Guarantee Fund. All these aspects taken together indicate the necessity for a review of the continuance as well as the format of the scheme."

Bhatia says: "It is the administration and the implementing agency that should be in touch with rural conditions and locate the demand for work. This is not done for many reasons. The labourer is expected to approach the administration and fill in a form. This seldom happens in the case of illiterate and vulnerable sections, which are not even aware of their rights under the scheme. This has also been documented in one of my surveys."

He adds: "The location and the duration of the work are important. There are numerous sites where work could be started and labour is available, but the scheme has not been implemented. In all such areas the implementing agency should be held accountable. The Collector coordinates the scheme in the district. But never has an official been punished for not starting the scheme."

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