The National Employment Guarantee Bill may not work because the scheme itself is modelled on earlier schemes that failed and the government, having learnt little from experience, still plays the central role. Unless there are amendments to the Bill relating to the definition of the term `family', penal provisions against those who misuse the scheme for profit and the wage rate, the Bill will only deal another blow to an enfeebled village economy.

Sharad Joshi

THE National Employment Guarantee (NEG) Bill 2005 was presented in the Lok Sabha on August 18 the last working day before the members went on a long weekend. The Bill has been hailed as a testimony to the United Progressive Alliance Government's commitment to the aam aadmi and its determination to help the poorest of the poor.

To emphasise the historic character of the Bill, the UPA Chairperson, Ms Sonia Gandhi, spoke for the first time in the Lok Sabha. She said that the drafting of the Bill had taken some time but that every minute had been productively used. She complimented, in particular, the Prime Minister, Dr Manmohan Singh, for his unstinting support to the exercise.

From the Opposition, Mr Kalyan Singh, Chairman of the Standing Committee that scrutinised the Bill, offered a critique sans any rhetoric. Among the points he made were:

Individuals should have been treated as separate units rather than families. There are large and small families. The scheme would work to the disadvantage of joint families. This could also lead to family quarrels and divisions.

The Employment Guarantee Scheme has been preyed upon by unscrupulous elements in the bureaucracy. There is need to make stringent penal provisions that would be effective.

The entire financial responsibility should be taken on by the Central government. State governments are in no position to bear even 10 per cent of the burden and that could prove to be one of the weak links of the scheme.

The Bill has noble intentions and any critique thereof may be construed as ill-will towards the aam aadmi and as opposition to offering employment to the millions of jobless in the rural areas.

The object of providing at least 100 days of employment to the unemployed is a noble objective. However, many a noble scheme has produced disastrous results. It would be a pity if the second Garibi Hatao campaign proves anti-poor. The noble idea has undergone substantial erosion.

There is no doubt whatsoever that the Prime Minister has tried his best to offer as much solace to the poor and the hungry as possible under the existing budgetary and administrative constraints.

It is a pity that all this good work should be rushing down an inevitable precipice of failure and disaster.

However, it should not be forgotten that anti-poverty programmes since Independence have brought little relief to the poor. Rajiv Gandhi's quantification of the leakages in transit of financial assistance to the poor is well known, and Ms Sonia Gandhi must remember it.

The eradication of poverty has been big business for several decades now. Starting from the UNDP and the specialised institutions of the UN system to the national governments, the babus and the NGOs, there is a whole chain involved in making money in the guise of helping the poor.

The National Employment Guarantee Scheme may not work because, in the scheme of the Bill, the Government plays the central role though it is ill-equipped to handle such a massive national project.

The Scheme is modelled on a plan introduced in Maharashtra decades ago by the late Vasantrao Naik. It turned out a disaster.

It is evident that the architects of the NEG Bill 2005 have failed to draw lessons from the Maharashtra experience as also the predecessor Food for Work Programme 2004.

Over decades of its working, the Employment Guarantee Scheme (EGS) has produced few permanent assets. And the EGS in Maharashtra is synonymous with corruption. Government officials concoct false registers of attendance.

Very often, names of people long dead are found in these registers, complete with the thumbprints or even signatures. Those who are physically present get a pittance of the amount due at the rate of the minimum wages, although amounts are entered in the register as having been fully paid.

In Marathi, Employment Guarantee Scheme is Rozgar Hami. The common saying goes: Ardhe Tumhi; Ardhe Amhi - Rozgar Hami! (sharing spoils is the EGS).

There have been cases where those signing the registers themselves prevail upon the babus to hire earth-moving machinery for doing the manual work and even offer to pay a part of their wages towards that end. Often, work is started on the basis of fake and forged sanctions.

The bureaucracy-political chain pockets much of the EGS funds. The attendees get less than half the daily minimum wages but they do not complain as they are not required to put in any work for it.

If it were only a question of the babus swindling and the unemployed making some unearned income, one could have turned a blind eye to the ills of the EGS in Maharashtra. Unfortunately, it is not so benign.

The rural wage earners definitely prefer to do the EGS work where they get some money for no work at all, rather than go to the fields of farmers to do backbreaking work, even at full daily minimum wage rates.

As a consequence, the labour market for normal agriculture is affected and the villagers get inured to participating in administrative corruption.

Providing 100 days of work in about 300 days of the year is going to pose difficult administrative problems; but they can be taken care of if the proposed Act has enough powers to mete out stringent punishment to anybody who plays truant with the NEGS funds.

The Maharashtra experience has also shown that corruption in the EGS inevitably helps the coffers of the ruling party.

The Bill is a well-intentioned political gimmick that is not going to blow any good wind to anybody and will only spell disaster to the village economy, which is already in dire straits.

The Ministry of Small Scale Industries and Agro and Rural Industries recently brought out a booklet summarising the salient features of the Ministry's development scheme. Most of the industries under the scheme can be started with a seed capital of less than Rs 1 lakh.

The NEGS proposes to give one member in each family Rs 60 per day for 100 days in a year. The annual payment of Rs 6,000 capitalises at the rate of 6 per cent per annum to Rs 1 lakh.

If the money proposed to be sunk in the NEGS is given to each person as venture capital, there could be a transformation of the rural scene without any administrative expense and with no risk of corruption.

The National Employment Guarantee Bill 2005 needs amendments to the effect that:

  • Any person coming to the NEGS work must produce a certificate from the Gram Panchayat or from employment-giving farmers that they are unable to offer them employment on any given day;
  • The term `family' should be defined in such a way that employment can be offered to at least one in five members;
  • Deterrent and corporal punishment should be provided for all those who try to profit by the NEGS; and
  • The wage rate applicable for the NEGS work should not exceed the minimum wage rate applicable according to the State legislation in the area.
  • (The author, Founder of the Shetkari Sanghatana, is a Rajya Sabha member. Feedback may be sent to

    (This article was published in the Business Line print edition dated August 24, 2005)
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