October 21, 2007

Is a golden opportunity to change the face of rural India, provided the government wishes to take it seriously

Immediately after Rahul Gandhi was appointed as the General Secretary of the AICC, he – along with a dozen other appointees – demanded to the Honourable Prime Minister Dr. Manmohan Singh that the ‘iconic’ National Rural Employment Guarantee Act (NREGA) be extended to the entire nation. This is a quantum jump considering that the scheme encompasses only 330 districts currently. Well, how much of this calibrated action would eventually help the Congress Party in the forthcoming elections is a matter of debate, but the bigger contention is the scheme in itself, which – though brilliant in theory – in practice, has failed to deliver as tangible benefits for the poorer masses of the country in its current form.

The NREGA has been drawing flak for long. And surprisingly, the criticism of this scheme has not just been coming from liberal economists and market analysts alone, for whom the fiscal health of the government is more important than anything else. In fact, the more vociferous protests have been from NGOs and civil society organisations who have been working at the grassroots and have borne testimony to the way this scheme is in a deplorable state. A study conducted by an NGO, called the Society For Participatory Research in Asia, shockingly revealed that in the year 2006-07, a mere 6% of households that were registered for work under the NREGA, actually got work. This study, which was essentially spread over 21 districts in 14 states of India, was by no means a short cut to defame the scheme. Even if this seems to be not so impressive a data, consider this: When the scheme was started in the year 2006, the budgetary allocation was Rs. 11,600 crores for the 200 districts where it was initially launched.

Yet, in the next fiscal year when it was extended to another 130 districts (thereby taking the total tally to 330 districts), the additional allocation was a mere Rs. 400 crores. This meant that the average allocation per district immediately came down from Rs. 58 crores to Rs. 36.36 crores! Now that the scheme is to be extended to 600 districts, would there be a commensurate jump when it comes to the resource allocation, knowing the very fact that the government is also bound by the Fiscal Responsibility and Budget Management Act, (whereby the government has to reduce all kinds of deficits in a time bound manner)? But if the government fails to allocate more resources, it would clearly further reduce the average allocation for some of the poorest states of the country.

In fact, the issue is not about allocation alone. More than that, it is about judicious application of the available resources, which also has been an area of concern. The Centre for Science and Environment revealed that nearly 41% of the districts have been able to spend only 15% of the funds allocated; and that in most cases, the concerned states have failed to come up with the requisite guidelines under the Act. Since under the Centre-State relationship that defines the basic paradigm of the Republic of India, all Central Government schemes – especially those related to the rural sector and agriculture – have to be essentially implemented by the respective state governments and their agencies; and that’s why beyond a certain point, the Centre is rather helpless in taking any well-intentioned policy to its culmination. It has even been observed that many of the states have been attempting to usurp the power that has been given to the Panchayati Raj institutions. All in all, things have not been going in the direction in which they should have.

The most important thing when it comes to rural employment creation is that it is imperative to create long term productive assets, not only for sustainable development but also to bridge the existing rural-urban divide. And yet, currently around 54% of all the work under NREGA is just for water conservation. Of course, water conservation is crucial; but this alone should not be allowed to undermine the efficacy of much needed basic physical infrastructure like good roads, health centres and schools.

It is high time the government realised that the NREGA is a golden opportunity to change the face of rural India. And they should leave no stone unturned to make the scheme a huge success and not let it die like the other preceding similar schemes. Because through this scheme – if the government wishes – can be created an enabling environment (through basic social and physical infrastructure) for private investments to follow; for nothing can be achieved until and unless private investments supplement government initiatives. And once that happens, the current state of rural India would be history in no time!


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