Shah,Mihir 2005 (Saving the Employment Guarantee)

8/7/2019 Shah,Mihir 2005 (Saving the Employment Guarantee)

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Economic and Political Weekly February 12, 2005 599

MIHIR SHAH

An animated debate is raging aroundthe Employment Guarantee Act(EGA) proposed to be enacted by

parliament. While those of us who workedhard in drafting the bill are obviouslydisappointed by the many dilutionsintroduced in the initial blueprint, we

should 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 the

drylands, 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 to

live 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 water

based 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 good

way 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 ofthe 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 reliefworks. 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 ofthe 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 the

only way leakages can be checked. Theonus of success of the EGA is on thepeople themselves. It will succeed only ifthey 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 checkcorruption. 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 ActThe 2004 Employment Guarantee Bill needs to be modifiedif its objective is to be realised. The critics and supporters ofthe programme should be able to reach a compromise on the

identification 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.


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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 rootspeoples 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 doing

this, 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 peoplesorganisations 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 blockshould 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 a

department 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 not

enough 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. It

should, 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 minimum

wage 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 workof different degrees of strenuousness. It

should 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 workconditions prevail at the work site as perlaw (including specified hours of work,provisions for drinking water, rest, toilet

facilities, especially for women, medicalfacilities, etc). And that payments ofwages 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 ofsanctions, etc, in public meetings shouldbe mandatory. The committee would helpthe gram sabha in preparing completion

and 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/peoples representatives. They wouldhear complaints from the members of the

gram 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 ofMadhya 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 ofa 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.


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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 stressed

because 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 theofficial poor will leave out millions ofreally 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 number

of 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 aboutpublic 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 workwould 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 not

really poor or unemployed. The kind ofworks 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 ofofficial poor would any work take place.3

Particularly difficult situations are likely

to 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 ofthe 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 to

begin public works.Meanwhile, several really poor people

who 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 deserving

households when they most need statesupport. In any case, it is difficult to visualisein practical terms how authorities wouldturn away non-BPL people in search ofwork. 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 reduceemployment 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 unorganised

workers? 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 ofGDP 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 the

Food 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 cant 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 2003-04

0 3 20 16 33 36 25

Source:Bulletin of Food Statistics, Ministry of Food, Government of India, various issues.


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these stocks. In fact, these investments areabsolutely essential to sustain agriculturalgrowth in India, which has just had itsworst decade since independence. Afterall, the single most important factor con-tributing to the dismal performance ofIndian agriculture in the 1990s was thedecline in public capital formation. This isparticularly true of the areas left untouched

by the green revolution or those where thisstrategy has proved a failure. In states withplentiful rainfall such as Chhattisgarh,Jharkhand and Orissa, for instance, wehave the cruel paradox of thousands offamilies migrating in search of work everyyear, when an appropriate farming strategybacked by massive rainwater harvestingcould bring about an agricultural revolu-tion there. Work has already started in thisdirection and the EGA could add greatmomentum to this drive.

But again to make the opponents play

ball, could we agree to begin applyingEGA first only to the 150 most backwarddistricts identified by the Planning Com-mission? This could be where the NationalFood for Work Programme is currentlyunder way. This is something thegovernment is already committed to. It

could then be gradually extended to thewhole country within an agreed time frame,knowing that the need for an employmentguarantee will decline over time in eachEGA area. The fiscal burden is, therefore,not for all time to come. And if it is largerin years of crisis, that is how it must be.Extend it gradually across the country overthe next 10 years if you find five too short.

But please do not pass the completelydiluted version of the Act currently beforeparliament. That cure would be worsethan the disease itself.

Notes

1 The latest official estimates of poverty in Indiaare based on the 55th Round NSS data, whichthrow up a figure of 190 million rural poor in1999-2000. At an average family size of five,this gives us 38 million rural poor households.There are 2.35 lakh gram panchayats in India.

2 To understand the absurdity of the provisions

under the current bill, consider a family withfour BPL cardholders living under one roof. Ifall four of them apply for employment, within25 days they will be told that there is no morework available for them in the current financialyear as their quota of 100 days is over.

3 Let us remember that according to Clause 16of the EGA the gram panchayat shall beresponsible for identification of the projects in

the gram panchayat area. Every gram panchayatshall, after considering the recommendationsof the gram sabha and the ward sabhas, preparea development plan and maintain a shelf ofpossible works to be taken up under the Schemeas and when demand for work arises. Clause17 adds: the gram sabha shall monitor theexecution of works within the gram panchayat.Thus, works are to be taken up in each grampanchayat area. There may then be manypanchayats where no work takes place.

4 The existing Sampoorna Grameen RozgarYojana and the National Food for Work Progra-mme are to be merged into the New RuralEmployment Guarantee Programme

References

Ray, R and G Lancaster (2005): On Setting thePoverty Line Based on Estimated NutrientPrices, Economic and Political Weekly,January 1.

Sen, A and Himanshu (2004): Poverty andInequality in India, Economic and PoliticalWeekly, September 18 and 25.

Shah, M, D Banerji, P S Vijay Shankar and PAmbasta (1998): Indias Drylands, OxfordUniversity Press, New Delhi.

Subramanian, S (2005): Unravelling a ConceptualMuddle: Indias Poverty Statistics in the Lightof Basic Demand Theory, Economic andPolitical Weekly, January 1.

Vijay Shankar, P S (2004): Waterlogging Problemin North Bihar: Towards a Solution, Bagli,Samaj Pragati Sahayog (mimeo).

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IGIDR will provide boarding and lodging to the selected participants. In addition, selected outstation

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Documents

Shah,Mihir 2005 (Saving the Employment Guarantee)