The Hindu Business Line : REGS: Grossly miscalculated?

IN THE article, "An onerous job," (Business Line, August 25) the cost of implementing the National Rural Employment Guarantee Scheme (NREGS) is estimated at Rs 1,00,000 crore.

Maharashtra has had an employment guarantee scheme for almost 30 years.

Administrators implementing the scheme had empirical data of the performance, duly vetted by the Comptroller and Auditor General of India and scrutinised by successive State Legislature Public Accounts Committees/EGS Committees.

In the background of such information, the Rs 1,00,000 crore estimate seems grossly excessive.

Figures released by the Maharashtra Government indicate that it spent Rs 1,050.71 crore for 18.53 crore man-days of work in 2003-04 — a drought year in the State.

The NREGS estimates that it will provide 100 man-days of work per person in around 14.5 crore rural households. The Maharashtra experience shows clearly that a household does not use even 100 man-days per year.

The Maharashtra Employment Guarantee Scheme was an open-ended scheme with no upper limit on man-days of employment.

Yet, only 18.53 crore man-days were utilised in a year by around 1.2 crore rural households in the State, that is just around 15-16 days per household per year, that in a drought year of unprecedented proportions.

If one extrapolates the Maharashtra figures to an all -India, it works out to 235 crore man-days of work.

That implies an annual expenditure of Rs 13,323 crore, a figure which is less than Rs 1,00,000 crore by almost 87 per cent!

The NREGS expects to pay Rs 60 a day as wages (versus an average daily wage of Rs 45-51 in Maharashtra). In addition, there is the cost of materials and administration, which works out to Rs 12 a day in Maharashtra. So, the total cost should be around Rs 72 a day for the NREGS.

For 235 crore man-days, the cost would be around Rs 16,920 crore — still a far cry from Rs 1 lakh crore.

And this assumes the open-ended nature of the Maharashtra scheme, as well as an unprecedented drought year.

With the benefits of information technology and the transparency that it brings to the administrative system, the Rs 17,000 crore figure can be brought down further.

(The author is a former Additional Chief Secretary — Finance, Planning and Home Departments — Government of Maharashtra, and a former member, Maharashtra Electricity Regulatory Commission.)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Taking the strategic partnership forward

REGS: Grossly miscalculated?

Late and little

Outcome Budget: Exercise in futility?

Giving back to Mumbai — Corporates are game, but where is the gameplan?

How many Chinese garments equals an Airbus?

Disastrous management

After Katrina's fury, the agony and shame

Public health

Fuel prices

Outcome Budget