The Hindu Business Line : An onerous job

THE RECENT CHANGES notwithstanding, the law guaranteeing employment to the rural masses must still be viewed as falling short of expectations. For now, the prospect of a government- guaranteed rural job is going to be restricted to only those areas that may be notified for the purpose, with a nation-wide coverage another five years away. This is just as well. The financial consequences of a comprehensive scheme would have overwhelmed any government given the limited room for fiscal manoeuvre available. It is no surprise, therefore, that the present Government has bought time from its allies, notably the Left, and opted for a phased implementation, over five years.

While it is a moot point if even five years down the road there will be sufficient funds available to meet the cost of running such an ambitious programme, the Government faces a challenge on the fiscal front even to sustaining it this year. As for the States putting up their share of the costs, that seems quite unlikely. The programme was initially estimated to cost approximately Rs 40,000 crore on the assumption that it would cover only those living below the official poverty line. But this has since been modified to bring in its scope all those who volunteer under the scheme. The more liberal framework would mean that costs could be in the region of Rs 1 lakh crore. Since the rural jobs scheme under implementation covers 10-20 per cent of the target population, even a modest enhancement in coverage could strain the Centre's resources. The vague official assurances so far that funds would be found by diverting resources from other projects (with adverse consequences to the economy) or that the programme would not suffer from a shortage of resources do not inspire confidence. Considerations of sound fiscal management would demand something more than pious intentions or cross-sector fund swaps.

For all the radical intent that a massive intervention at poverty alleviation such as this signals, there is little of creative strategy. The list of jobs to be executed presents the same stereotypes such as laying roads that would perhaps not stand more than a sharp shower, putting up bus shelters in villages that have no public transport system, desilting lakes that have been encroached upon and so on. It is facile to assume that creation of such questionable assets would somehow catalyse economic activity in a region and lead to poverty reduction. But as the Maharashtra experiment has shown, despite three decades of implementing an employment guarantee scheme there has been no appreciable reduction in rural poverty in that State. Corruption, no doubt, has been a problem. But static thinking in development administration has been no less a culprit. Perhaps, the time has come for a radical rethink on the approach to poverty alleviation. The focus must now be on capacity building on the social aspects of the rural population and in funding newer options that deliver quick incomes, such as commercial farming (jatropha cultivation) or social forestry on dry, marginal public land.

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