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Shah,Mihir 2005 (Saving the Employment Guarantee)

Shah,Mihir 2005 (Saving the Employment Guarantee)

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Economic and Political Weekly February 12, 2005
599
M
IHIR
S
HAH
A
n animated debate is raging aroundthe Employment Guarantee Act(EGA) proposed to be enacted byparliament. While those of us who workedhard in drafting the bill are obviouslydisappointed by the many dilutionsintroduced in the initial blueprint, weshould try to address some of the genuineconcerns of the sceptics, and suggest away forward for reaching a consensuson the act.
Addressing the Water Crisis
I want to begin by stating what needsto be recognised and agreed upon byeveryone concerned with rural India, what-ever be his or her ideological persuasion.We need to understand that we are on theverge of an impossible water crisis. In thedrylands, water tables are falling, thereis a growing scarcity of water. Whetheryou are a votary of big dams or tubewellirrigation or low-cost local solutions andhowever bitterly you may oppose eachother, you cannot deny that we need toundertake a massive programme of catch-ment area treatment and rainwater harvest-ing. This is because if big dams have tolive as long as planned, if they are not tosilt up prematurely, we need to arrest theunbounded flow of water over their de-graded catchments at every possible point.If we want to raise the rapidly falling waterlevels in wells and tubewells, we mustimpound rainwater where it falls, so thatit can recharge groundwater, which is themain source of water in India today. Inother parts of the country, waterloggingand floods are a major concern. Here toowe need location-specific interventions toprovide safe drainage for the excess waterbased on the principles of watershedmanagement. Recent work shows that thereis a definite solution to these seeminglyintractable problems [Vijay Shankar 2004].We must also accept that no private partyworking for profit is going to make themassive investments needed in these ‘pub-lic goods’. These investments have to comefrom the state. I see the EGA as a goodway to embody these investments, whichare both productive and labour-intensive.The aim has to be long-term drought- andflood-proofing, not merely short-term re-lief. If implemented properly, the pro-gramme has the potential to rid India of the scourge of recurrent drought and flood.The major ground for scepticism regard-ing state-led programmes flows from themany years of experience of this moneygoing down the drain. No supporter of theEGA should try to deny that this is a validconcern. Those of us who live and work with the rural poor can tell you that theyshare the scepticism of the critics in thisregard. So what do we do? We certainlycannot take the view that since the attempthas failed in the past, we should not makethe attempt again. What we should try to dois to see whether there can be somethingnew in the way we make the attempt this timearound. I would like to urge that the EGAtake a significant step in this direction.In the past, government employmentprogrammes have been essentially relief works. A welfare state initiates these pro-grammes to lower the pain of people indistress. A top-down dole. The EGA isdifferent. It enshrines work as a right of the people. It also puts the onus on thepeople to demand work. Governmentresponds to their demand. This makes abig difference. The only possible check tocorruption in government works is a vigi-lant people. When work starts in responseto a demand from the people, the chancesare that people will be more involved andvigilant. I am not saying there will be zeroleakage. I am suggesting that this is theonly way leakages can be checked. Theonus of success of the EGA is on thepeople themselves. It will succeed only if they are aware of it to begin with. And thenactive in deciding what works their grampanchayat should take up. And finally inexercising the necessary vigilance to check corruption. This is no passivity-inducingdole of a moodily munificent welfare state.It is a programme of and by the people.If they are not active, if they are not vigi-lant, it will not succeed. This is whyparliament must also simultaneously pass
Saving the EmploymentGuarantee Act
The 2004 Employment Guarantee Bill needs to be modified if its objective is to be realised. The critics and supporters of the programme should be able to reach a compromise on theidentification of beneficiaries, coverage and wage rates.However, if the bill in its present form is passed by parliament,this cure could be worse than the disease.
 
Economic and Political Weekly February 12, 2005
600
an undiluted Right to Information Act (RIA)so that people have the requisite powersto exercise this vigilance. The EGA willbe incomplete without the RIA. Grass rootspeople’s organisations have a critical roleto play here – in mobilising people todeploy the powers inherent in their rightto information. If only because politicalparties, whose cadre should really be doingthis, have completely reneged on theirfundamental responsibility towards thepeople in this regard.
Monitoring Mechanism
To ensure leakages are minimised re-quires that the EGA be reinforced with astrong monitoring mechanism. The supre-macy of the gram sabha in conductingsocial audit must be acknowledged here.But we must also recognise that the gramsabhas of today are often not able to ef-fectively execute the constitutional respon-sibilities devolved upon them. For a certainperiod, that will vary from state to state,there is a need for grass roots people’sorganisations to assist gram sabhas sothat they may truly reflect the will of themost disadvantaged and needy sectionswithin the village. Also to ensure that theworks carried out are of the requisite tech-nical excellence, contributing to the produc-tive assets in the village. And so that thereis complete transparency and accountabi-lity in the works carried out in all respects.A monitoring committee specially con-stituted for this purpose in each block should assist the gram sabha in this work.This committee must work under the ju-risdiction of the gram sabha. An indicativelist of those who could serve on the com-mittee includes teachers of the villagegovernment school and the nearest govern-ment college, members of the village andblock panchayat, representatives of volun-tary organisations operative in the district,local journalists and other professionals,a government assistant engineer (from adepartment other than those involved inthe work for the gram panchayat) and anofficer of a nationalised bank operating inthe block. Orientation programmes couldbe organised for the committee from timeto time by the local administration with theassistance of credible and experiencedvoluntary organisations in the state.The committee would assist the gramsabha in monitoring the employmentprogramme at three stages: programmeformulation, during programme implemen-tation and post-implementation. It is notenough to ensure that works are carried outwell. The first question has to be: how wasit decided which public works are to becarried out in the panchayat? The decisionon which works to carry out must reflectthe needs and possibilities within thepanchayat. Indeed, the decision shouldreflect these needs and possibilitieswithin each ward of the panchayat. Itshould, in other words, be as location-specific as possible. In order to ensurethat this takes place in practice, thesedecisions must involve the largest numberof people. All decisions must be taken ina series of village meetings, some of whichneed to be at the proposed work sites. Inchoice of works and site selection, pref-erence must be given to those that benefitthe economically and socially disadvan-taged sections, such as women, dalits,adivasis, landless, marginal farmers, etc.Labour-intensive works (with a minimumwage to non-wage cost ratio of 60:40) mustbe given preference to maximise employ-ment potential. The entire process shouldbe as public and transparent as possible.Once the plan is made it must be pre-sented every year for approval at a meetingof the gram sabha, specially convened forthis purpose. The aspects of project imple-mentation that the committee should moni-tor include decisions on labourers to beemployed in a way that equity is ensuredin allotting work and also in allotting work of different degrees of strenuousness. Itshould be ensured that no child labour isemployed. Decisions on rates of paymentfor different kinds of work need to beworked out in a participatory manner sothat everyone is aware of the basis forpayment. The attempt has to be to ensurethat everyone gets at least the statutoryminimum wages, and that productivitynorms are adhered to.The committee must see that proper work conditions prevail at the work site as perlaw (including specified hours of work,provisions for drinking water, rest, toiletfacilities, especially for women, medicalfacilities, etc). And that payments of wages are made every week (or at leastonce every fortnight). Payment of wagesmust be made in a public, transparent andaccountable manner either at the work siteor at a public place most convenient to thelargest number of labourers. Presentationof all records including muster rolls, bills,vouchers, measurement books, copies of sanctions, etc, in public meetings shouldbe mandatory. The committee would helpthe gram sabha in preparing completionand utilisation certificates of works underits jurisdiction.The monitoring committee should assistthe gram sabha in each of the above tasksand suggest remedial action if necessary,including ways of improving the system inplace as well as action against erring offi-cials/people’s representatives. They wouldhear complaints from the members of thegram sabha and assess the veracity of thecomplaints. The committee will report onthese to the district collector. Each grampanchayat in each block should be coveredat least once in the five-year tenure of themonitoring committee in at least one of thethree stages of programme formulation,implementation and post-implementation.
Fatal Flaw: BPL Conditionality
The draft of the EGA prepared by theNAC had the great merit of self-targeting.After all, only those really poor or reallyin need will come forward to do the kindof arduous manual labour to be performedunder the programme. A potential sourceof leakage is automatically plugged. Lim-iting the benefit to those on the officialbelow-the-poverty-line or BPL list (asproposed in the bill currently before par-liament) destroys this self-selection mecha-nism. Indeed, this may be regarded as thefatal flaw making the programme a veri-table non-starter. At the Samaj PragatiSahayog, a grass roots initiative for drought-proofing and water security in centralIndia’, we have over the last one decadeimplemented rural employment pro-grammes across half a million acres of landin 50 of the most backward districts of Madhya Pradesh, Chhattisgarh, Jharkhandand Bihar. The experience gained throughour work indicates that in many grampanchayats in India, given the provisionsof the bill currently before parliament, itmay become difficult to find the minimumnumber of people needed to complete agiven work at any given time.This is because (a) the entitlementis restricted to BPL households only,(b) “household” is defined as “members of a family related to each other by blood,marriage or adoption and ordinarily resid-ing together and sharing meals or holdinga common ration card” (Clause 3 (f)), and(c) the guarantee is “subject to a maxi-mum of one hundred days per householdin a given financial year” (Schedule II,Condition 5).So the restriction is even more severethan being limited to BPL cardholders.
 
Economic and Political Weekly February 12, 2005
601
Thus, if there are three BPL cardholdersliving under one roof, sharing meals in onefamily, the total days of employment theywill together be entitled to in a year willbe 100 and not 300 days. In any case, BPLsurveys in India lack all credibility. Manyreally deserving families get left out sim-ply because they are migrant or homeless.This point needs to be particularly stressedbecause official estimates of poverty haverecently been questioned from many otherpoints of view as well [Sen and Himanshu2004; Ray and Lancaster 2005 andSubramanian 2005]. Although making verydifferent critiques of the official povertyestimates, each of these writers bring outthe severe underestimation of poverty bythe government. Thus, it is clear that tar-geting the employment guarantee to the‘official’ poor will leave out millions of really poor people in rural India.On the other hand, it is also very well– known that there is widespread corrup-tion in the way households get includedin the BPL list. Local vested interests areable to muscle their own people into thelist quite irrespective of whether they arereally poor or not. Such people are highlyunlikely to offer themselves to do thearduous manual labour involved in theprogramme. We may then be left with asituation in many panchayats where be-cause of the restriction of the entitlementto those on the official BPL list, we maynot be able to find the minimum numberof people required to complete a work atany given time. We must remember thatunlike many other BPL-based schemes,this is not an individual beneficiary centredprogramme. We are speaking here about‘public works’ to be carried out by hun-dreds of labourers together in each grampanchayat at one time. Problems would befurther compounded especially if alloca-tions to panchayats for the employmentprogramme are made on the basis of numberof BPL cardholders (as in the public dis-tribution system).Let us visualise a typical scenario thatis likely to emerge. Officially, the averagenumber of poor households in a grampanchayat in India is around 150.
1
Thenumber of those entitled to 100 days’ work would get reduced further depending onhow many of the poor share one roof.Suppose on an average 1.5 BPL cardholderslive together. This would mean only 100people in a gram panchayat would eachbe entitled to 100 days work in a year.
2
And not all of these people would like tolabour, given that many of them are notreally poor or unemployed. The kind of works to be taken up under the programmewould typically require at least 100-200people working together at one go. So noreally productive work may get done at allin many panchayats. Only in panchayatswith large populations or high numbers of ‘official’ poor would any work take place.
3
Particularly difficult situations are likelyto emerge in the sparsely populated adivasiareas. As has been well-established [Shahet al 1998, Ch 5], adivasi poverty in Indiais characterised by high land-man ratios,relatively low landlessness but very poorland productivity, forcing marginal andeven small farmers to depend on agricul-tural labour for their livelihood. Most of the ‘landed’ agricultural labourers widelyreported in NSS surveys are adivasis. Inmany of these adivasi dominated grampanchayats there may be problems in find-ing enough ‘officially entitled’ people tobegin public works.Meanwhile, several really poor peoplewho could not make it to the official BPLlist would be deprived of the employmentthey need and deserve. Apart from thosewho should have been on the BPL list inthe first place, there are millions of fami-lies in India whose existence hangs pre-cariously in balance around the officialpoverty line. In years of distress these house-holds regularly slip below subsistencelevels. Restricting the entitlement to BPLfamilies would deprive these deservinghouseholds when they most need statesupport. In any case, it is difficult to visualisein practical terms how authorities wouldturn away non-BPL people in search of work. People who may be even migratingout of the area for employment as thou-sands do every year from villages in Orissa,Jharkhand, Bihar and Chhattisgarh. Not allof those who migrate belong to the BPLlist especially not in years of drought. Theincredible thing is that under the currentemployment programmes all these peopleare eligible for work. We have an extra-ordinary situation that the present employ-ment guarantee bill could actually
reduce
employment opportunities for such people.
4
It is not that the government has noexperience of the problems the BPL listthrows up. Reliance on this list was a criticalreason for the disastrous performance of one of the biggest anti-poverty program-mes in India, the Integrated Rural Deve-lopment Programme (IRDP). Thousandsof crores went down the drain forcing thegovernment to finally abandon theprogramme. It is not clear why we wanta repeat of the IRDP. It is better not to havean EGA than to base it on the BPL list.
Minimum Wages
Another issue that worries the scepticsneeds to be addressed. This is the concernthat paying minimum wages will drawlabour away from agriculture and/or makeit unviable, since market wages are gen-erally much lower than the statutory mini-mum. My own response would be to ask:do we want, therefore, to condemn thepoorest in India to eternal poverty? Andwhy do we use different standards forurban and rural, organised and unorganisedworkers? There can be no compromisewith the payment of statutory minimumwages as per the Minimum Wages Act,1948. This would, in any case, be contraryto rulings of the Supreme Court as in the1982 Asiad case. But in a spirit of con-ciliation and making the EGA work, couldwe consider the suggestion that the em-ployment guarantee be switched off dur-ing the peak agriculture season in eacharea, when demand for labour in agri-culture (and potential conflict with thepeasantry) is at its highest?
Fiscal Burden
Finally to the issue of fiscal burden.Again, my own view is that national pri-orities must be biased in favour of endingthe suffering of the poor during droughtsand floods. Spending around 1 per cent of GDP for drought- and flood-proofingIndian agriculture must be regarded as areasonable investment especially when inrecent years we have had millions of tonnesof foodgrain rotting in the godowns of theFood Corporation of India 25-36 per centof which has found its way into the openmarket or exported out of the country inthe last three years (see the table).Why can’t we use this grain instead tosupport the EGA? Investments under theEGA will also help continuously replenish
Table: Exports and Open Market Sales as Percentageof Rice and Wheat Offtake, 1996-2004
1996-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-040 3 20 16 33 36 25
Source: 
 
Bulletin of Food Statistics 
, Ministry of Food, Government of India, various issues.

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