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SECONDREPORT    
SECONDADMINISTRATIVEREFORMSCOMMISSION     
UNLOCKINGHUMANCAPITAL    
JULY2006   
EntitlementsandGovernance–acasestudy   
SecondAdministrativeReformsCommission    
GovernmentofIndia  2ndFloor,VigyanBhawanAnnexe,MaulanaAzadRoad,NewDelhi110011  e-mail:arcommission@nic.inwebsite:http://arc.gov.in   
UNLOCKINGHUMANCAPITALEntitlementsandGovernance-acasestudy
2   
 
GOVERNMENTOFINDIA    
SECONDADMINISTRATIVEREFORMSCOMMISSION    
SECONDREPORT   
UNLOCKINGHUMANCAPITAL   
ENTITLEMENTSANDGOVERNANCE-ACASESTUDY    JULY2006   
 
PREFACE   
TheNationalRuralEmploymentGuaranteeActof2005isapath-breakinglegislation.Itsignalsaparadigm    shifttolegalentitlements,publicaccountabilitycoupledwithcommunityrights,andresponsiveandparticipative  management.Inthepast,wageemploymentprogrammes,thoughwellstretched,sufferedforavarietyof  reasons.Programmecoveragewaslow.Morethanfiftypercentofbeneficiarieswerenotfromthemostneedy   group.Labouremployedwasnotalwaysfromthelocalpopulation.Paymentmadewaslowerthantheprescribed   wage.Therewasdisparitybetweenwagespaidtowomenandmen.Onanaverage,16to29daysofemployment  wereprovidedtoaworkerperannum.Qualityofassetscreatedwasnotalwaysoftherequisitestandard.There  werereportsofforgedmusterroll.Onthewhole,wageemploymentprogrammesdidnoteventuallyachieve  whattheysetouttodo. Theunhappyresultwasthateventhoughanumberofsuchschemesweretakenup,thepoorcontinuedto   remainpoor,caughtinsocialcaptivityandwerenotenabledtoparticipateinthemainstreamprocess.Thiswas  particularlytrueofareasplaguedbyextremism,andfrontalandinaccessibleareaswhereemploymentschemes  weretakenhostagebycontractorsandmiddlemen,lockingpeopleinaseeminglyperpetualcycleofpoverty. Empoweringthepoorisbestdonebybreakingthebarriersofunemployment,illiteracy,backwardness,ill-  healthanddebilitatingsocialinequality.Itissadbuttruethatthesebarrierscontinuetorestraintheparticipatory   possibilitiesoftheruralpoorinthegrowthprocess.Inclusionandparticipationintheprocessofgrowthis  extremelyimportantfortakingthepooroutoftheviciouscycleofpoverty.Weneedtonotethat,whilethe  nationisgrowinginahigh-incometrajectory,thebottomofthepyramidofthesocietyisexcludedfromthe  benefitsofgrowth.Unlesswetargetthepooraggressivelyonthesupplysideandembarkoninitiativeswhich   benefitthemdirectly,growthandequalitycannotbereinforced. TheNationalRuralEmploymentGuaranteeAct(NREGA)isonesuchrevolutionaryinitiativetargeted   atthepoor.Inordertoempowerthepoor,givingvoicetothemintheprocessofimplementationofNREGA    shouldbethemainthrustoftheScheme.Communitypressureonrepresentativesoflocalauthoritiesshould   demolishthetraditionalhierarchyofpowerthathasdisempoweredthepoorforsolong.Suchanaccountability   mechanismcoupledwitheffectivecommunityparticipationshouldgivedemocracybacktothepeople. Wealsoneedtonotethatthedeteriorationinthecountry’sadministrationandpublicdeliverysystemhas  affectedthepoorthemost.Itisbecausetheyarecriticallydependentontheavailabilityofpublicservicesand   essentialinfrastructure.Corruptionisoneoftheprimaryreasonswhythepublicdeliverysystemhasnottouched   thelivesofthepoor.WehavetofightcorruptionaggressivelyifthebenefitsofNREGAaretoreachthepoor. ExtremismandNaxalismhavespreadtopartsofmorethan12Statesandhavetakenaheavytoll.Itisnot  acoincidencethatmostofthesedistrictsrepresentareasofhighconcentrationofpoverty,poorgovernance  systemsandpractices,weakinfrastructureandunequalpowerstructure.ThesearealsoareaswherePanchayats  aresimplynon-existentandinmanyplaces,non-functional.Thespreadofdemocraticspacethroughtheeffective  implementationofNREGAistheonlywaytoliberatethesedistricts. TheCommissionhasundertakenastudyofinstitutional,administrativeandfinancialmanagementsystems  ofNREGA.ThestudyisgreatlybenefitedbythedeliberationsattheNationalWorkshopsorganizedbythe  NationalInstituteofPublicFinanceandPolicy,andtheeGovernmentsFoundation.Itisalsobenefitedbyinputs  fromgovernmentfunctionaries,expertswithdomainknowledge,NGOsandotherimportantstakeholders. Basedontheseinputs,theCommissionhasrecommendedcomprehensivereformssothattheActcanbe  implementedseamlesslytobenefitthepoor.Iamconfidentthat,ifsuccessfullyimplemented,theActwillbethe  harbingeroftransformativechangesandparticipativedemocracyinruralIndia. 
(MVeerappaMoily)  Chairman   
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