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ON February 2, Prime Minister Manmohan Singh and United Progressive Alliance (UPA) chairperson Sonia Gandhi travelled to Bandlapalli village in Anantapur district of Andhra Pradesh to launch the National Rural Employment Guarantee Scheme (NREGS). The leaders issued job cards to a group of unemployed persons to mark the inauguration of the scheme and announced that from now on employment of 100 days would be guaranteed in large parts of rural India to all those willing to work.
The National Rural Employment Guarantee Act was passed by Parliament in August 2005 and for the past six months the Ministry of Rural Development had been coordinating with State governments and other development agencies across the country to set up the infrastructure and facilities to carry the scheme forward.
Under the scheme, each beneficiary family is guaranteed a daily minimum wage of Rs.80 for 100 days in a financial year. The Act stipulates that if the government fails to provide employment to the beneficiary families within 15 days of application, it would have to pay 25 per cent of the minimum wages for 30 days to such families as unemployment allowance and 50 per cent of the wages for the rest of the period. In an interview with Frontline, Rural Development Minister Raghuvansh Prasad Singh said that the scheme would reduce poverty to less than 10 per cent of the population in the next seven or eight years. He expressed hope that it will ultimately put an end to unemployment-driven migration of rural people to urban centres.
There is little doubt that the Minister, who hails from rural Bihar, and large sections of his Ministry have worked hard to do the groundwork to implement the scheme. Yet, the apprehensions and doubts about its effectiveness on the ground persist among potential beneficiaries, social activist groups involved in poverty reduction programmes, and even agencies involved in the implementation of the scheme, including sections of the government.
The primary concern is whether the government, in the long run, will be in a position to comply with the financial projections of the scheme. The second is whether the institutional and administrative mechanisms set up to promote a "unique" programme like the NREGS is appropriate to implement the wide-ranging tasks associated with it. The third is about leakage of funds meant for the scheme through misappropriation and corruption.
The funding of the NREGS as envisaged by the government is such that the Central government would bear 75 per cent of the wage and material costs and the State governments 25 per cent. According to the projections of a preliminary study report on the scheme prepared by the New Delhi-based Centre for Budget and Governance Accountability (CBGA), the Central government will have to allot Rs.9,240 crores and Rs.30,000 crores in 2005-06 and 2006-07 respectively to pay the beneficiaries alone. Administrative costs and other expenses have not been included in this estimation. The projection was based on the assumption that, in the 200 districts where the scheme is being implemented, 92.4 crore mandays of employment would be generated in the 42 days remaining in the financial year 2005-06.
The CBGA report points out that the UPA government's Common Minimum Programme (CMP) promises to implement the scheme in all 593 districts of the country by the end of its term in 2009. It says that the government plans to carry out this promise by adding 100 more districts in 2006-07 and 150 new districts each year thereafter. This means that the Central government has to start making an allocation of at least Rs.22,500 crores in the 2006-07 Budget for the scheme to get going.
In his conversation with Frontline, Raghuvansh Prasad Singh refused to make any projection on the expected funds, but only stated that funds would be sufficient. But the CBGA report gives an idea of the minimum allocation required. It is indeed a critical question whether the concept of "enlightened national interest" suggested by Manmohan Singh and Finance Minister P. Chidambaram alone will lead to this kind of allocation.
But this is not the only worry with regard to the financial demands of the scheme. There are doubts about how far the State governments will meet their quota of expenditure. As per the list of target districts prepared for the first phase of the scheme, the top five beneficiary States are Bihar, Uttar Pradesh, Orissa, Jharkhand and Madhya Pradesh: they account for 102 out of the 200 districts where the scheme is to be implemented. Bihar has 23 districts under the scheme, Uttar Pradesh 22 and Jharkhand 20.
In the estimation of senior officials involved in the implementation of the scheme, the record of these States in terms of pre-launch activities such as the setting up of infrastructure, identification and tabulation of beneficiaries is not exactly exemplary. Rajasthan and Gujarat, which have six districts each under the scheme, have reportedly prepared themselves better.
According to a senior official involved in the implementation of the scheme, the most basic and daunting task in a programme of this magnitude is the setting up of institutional arrangements and administrative mechanisms. This, he pointed out, was especially important because diverse agencies and organisations would be involved in processes such as decision-making, planning works, identification of beneficiaries and allocation of employment, grievance redress, disbursement of funds and appointing staff to run the scheme.
The fact that these agencies have to function at six different levels - the Central government, the State governments, the administrative machinery and the elected local bodies working together at the district, block and panchayat levels, and the gram sabha - have the potential to make the setting-up process cumbersome. Over and above the normal bureaucratic set-up, the Ministry has set up Employment Guarantee Councils at the Central and State levels, programme officers at the district and block levels and grievance redress mechanisms at all the six levels.
The official pointed out that though the Ministry of Rural Development was the nodal agency in the scheme, the State governments, officials and local bodies at the district, block, panchayat levels, and the gram sabhas had to coordinate with at least five Ministries.
The structure, on the face of it, is a bureaucratic and administrative nightmare. The involvement of numerous agencies is a cause for concern because many poverty eradication schemes in the past have been rendered ineffective because of such broad-basing of the instruments of implementation as these instruments often represent and promote conflicting interests.
However, Raghuvansh Prasad Singh was confident that the institutional mechanisms for effective coordination among these agencies had been set up. The Minister said: "The role of the Ministry of Rural Development as the nodal agency has been defined clearly and there is an added thrust on people's participation and people-oriented planning through the involvement and deployment of grassroots-level local bodies such as gram sabhas and panchayats. The involvement of people at the ground level should act as a binding force." He added that the whole planning for the NREGS had drawn substantially on Kerala's experience of People's Planning.
But even as the Minister effused confidence, there were doubts in many segments of the implementation agencies, particularly the bureaucracy, whether the panchayats could deliver uniformly in all the States. The growth and prevalence of grassroots democracy in the country are characterised by huge imbalances in terms of reach and the empowerment of weaker sections of society. In such a situation, it would be impossible to expect the same kind of results from all the States.
While West Bengal, with 10 districts under the scheme, has vibrant, functional institutions of local self-government, in Bihar and Rajasthan the local bodies are not that effective. The implementation of the NREGS employing panchayati raj institutions (PRIs) is practically impossible in Jharkhand because elections to the local bodies have not been held there despite repeated directions from the Supreme Court.
According to a recent study by the National Social Watch Coalition, a non-governmental organisation (NGO), PRIs are as a rule bypassed and coerced by State governments, and politicians in positions of power at the district, State and Central levels impeded the transfer of powers and resources to them. The report pointed out that in large parts of the country PRIs are yet to obtain the rights, privileges and functioning freedom even in fundamental areas of local self-government.
Kerala's People's Planning was attempted in a society which traditionally had strong institutions of self-government and a population that had, over the years, acquired enough administrative and technical skills to intervene and carry forward developmental programmes. It would indeed be an overwhelming task to replicate it in other parts of the country. The concerns about leakage and misappropriation of funds and corrupt practices add to these difficulties. In fact, the track record of the scheme that is widely considered to have inspired the NREGS, the Employment Guarantee Scheme (EGS) in Maharashtra, is itself a cause for concern. The scheme has been functional since the drought in the State in the 1970s and its record over the past decade has been one of corruption and misappropriation of funds.
Other schemes modelled on the Maharashtra EGS, such as the National Rural Employment Programme (NREP) launched in the 1980s, the Sampoorna Grameen Rozgar Yojana (SGRY) and the National Food for Work Programme (NFFP), have repeatedly thrown up stories of inefficient implementation and fraud. For instance, in Solapur under the Maharashtra EGS, muster rolls were manipulated and funds siphoned off in the name of people who had moved away from the region and, in some cases, even died. There were also cases of coercing people to part with a portion of the wages after enrolling them in the scheme. The Minister and the officials in the nodal agency averred that such problems had been addressed in the run-up to the scheme and the corrective mechanisms evolved would go a long way in ensuring a relatively smooth passage for the NREGS.
There is little doubt that these assurances and accompanying measures, involving the administration and other agencies, including NGOs, have raised tremendous hopes among large segments of the poor, rural population. The very generation of these hopes is seen as a positive sign by many a social activist. But, the proof of the pudding is in the eating.
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