NREGA faces midlife crisis: there is just not enough work!
The UPA's flagship scheme, the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA, for short), is slowly sinking in the quagmire of bureaucracy.
The scheme, intended to provide 100 mandays of annual guaranteed work per household in rural areas, was initially picked up with great enthusiasm by various states. But its impact is tapering off, thanks to bureaucratic fatigue in providing work.
The stats tell the tale. In 2006-07, when the scheme was launched, it provided an average of 43 mandays of work to households asking for it. The mandays went up to 48 in 2008-09 in the run-up to the general election and then declined to 45 the 46 days in the next two years. This seems to indicate that as election fever recedes, enthusiasm for NREGA too WANES.
This year, incomplete data show that mandays provided are dropping precipitously – with 27 million households doing 702 million mandays of work – for an average of 26 mandays per household. The data might be incomplete and the final figures might well show an improvement, but there is no denying the scheme's midlife crisis less than five years after launch.
Alarmed by the prospect of the scheme's partial failure, Rural Development Minister Jairam Ramesh has announced a reform package called NREGA 2.0 to ensure that all demands for work as guaranteed by the Act are properly registered through an information technology-enabled system and acted upon by state governments.
Among other things, Ramesh wants to create a simple telephonic system to register any rural citizen's demand for work which would then automatically be fed into the scheme's MIS and get reflected in the job data card issued to workers. If no work is provided by the state government, the worker would automatically be shown as due for unemployment allowance.
Neat?
Well, it's a case of misdiagnosis by Dr Ramesh. In fact, the problem with the scheme is not that it does not register work demands — it does that fairly well —but that states cannot always guarantee work where it is demanded.
Says KS Gopal, a former member of the Central Employment Guarantee Council which is the apex administrative body overseeing the implementation of NREGA: "The rural development ministry's diagnosis is wrong. It is not a demand problem but a supply problem. It is not that the NREGA workers' demands for work are not being registered. It is that work is not being provided. Merely issuing fiats from Delhi won't help."
The scheme runs counter to the fundamental logic of all employment: it wants work to be provided where the worker resides (within a 5 km radius) instead of where work is available. Little wonder, gram panchayats and district collectors are less than enthusiastic about it now.
NREGA was drawn up in the ivory towers of Delhi where some jholawalas decided that work must be provided to people who want it. Good idea. But can unskilled work be provided by any economy to people where they want it without meticulous planning? In fact, it is always the other way round: people move to where the work is – whether it is in a city, or large infrastructure projects in rural and other areas.
Another problem is that households in many states are now reluctant to register for work since there are delays in payment. The reasons for the delays vary: from non-availability of funds to lack of processing capability in rural banks and post offices. A Frontline report of 2010, based on field visits to seven states, notes:
There are several steps in the wage payment process. Once work is complete, muster rolls (MRs) have to be submitted to the implementing agency. The next step is the measurement of work, since most states pay wages on the basis of work done, not on attendance alone. After this, payment orders listing the labourers and the wages due to them are prepared. These payments have to be sanctioned by the officials concerned (the block development officer, sarpanch, junior engineer, and so on). Then, the cheques and payment orders are sent to the bank or post office so that wages can be credited into the accounts of individual labourers. Delays creep in at some, or all, of these steps.
In short, NREGA is the victim of the usual bureaucracy associated with any government-operated scheme.
This year, the scheme may be running into an unstated hurdle: with the fiscal deficit soaring, the finance ministry may be happy to let the NREGA money go unspent. Remember, it's not an election year.
To understand why NREGA is running into headwinds, let's see what the scheme is intended to do and the problems emanating from these conditions. Its distinguishing features are the following:
One, the Centre bears the cost of wages, but states have to bear one-fourth of the material costs of work schemes. Most of the money may come from the Centre, but the hard work has to be done by the state. The actual implementation has to be done by the state-level bureaucracy – from district magistrates downwards. They have enough to do anyway.
Two, if there's no work, the cost of paying the unemployment dole becomes that of the state entirely. The states thus have less of an incentive to get workers to register if they think they can't provide them with work.
Three, NREGA schemes have to use manual labour to the extent possible. Machines are to be used at the minimum. This automatically means that the assets created may often be of a sub-standard nature.
Four, every household which registers for work is to get 100 days of work within a five-km radius of where they reside. If it's beyond 5 km, the wages go up by 10%. The 100-day limit has to be shared by a family or done by one individual.
Five, most of the work that can be carried out under NREGA involves agriculture: water conservation, drought-proofing, irrigation canals, land development, flood control and rural connectivity. Most of these areas call for close coordination with the agriculture ministry – but Sharad Pawar and Jairam Ramesh have not exactly been hobnobbing like long lost friends.
Says Gopal, the former Central Employment Guarantee Council member, in an interview to Business Standard: "Although located in the same building, the two ministries have not talked to each other. NREGA works plans are not integrated into district agriculture plans, lowering optimum benefit. Has any work of NREGA been ever vetted by agricultural experts? Krishi Vikas Kendras are in districts but not involved"¦"
The bottomline is simple: NREGA has been conceived in haste, and is not well-thought through. In a short span of time, it has managed to push wages up everywhere, but at the end of it all, it hasn't even achieved its primary goal of giving jobs to all comers.
Jairam Ramesh has to go back to the drawing board to rework the scheme to make it more manageable.
