Far from failure

Critics of the NREGP fear that it will prove to be an extremely cost-effective way of increasing employment and reviving the rural economy.

THE National Rural Employment Guarantee Programme (NREGP) the only successful flagship programme of the United Progressive Alliance (UPA) government is under attack. In the past month, the media have been full of reports that the scheme has provided jobs to only 3 per cent of those eligible, that it has led to colossal waste and diversion of funds and that it is a corrupt and inefficient exercise of a doddering government.

Criticism of the NREGP is not new; even when the NREG Act was being formulated, there was protest among those who felt that the money would be dissipated in local-level corruption and the scheme would result in a massive wastage of public resources. Hugely inflated projections of the likely cost were presented without any statistical backing, and it was argued that the country simply could not afford such an expensive and wasteful programme.

The most recent media frenzy has centred on a recent draft report of the Comptroller and Auditor General (Performance Audit of Implementation of NREGA, 2005, Office of the Principal Director of Audit, Economic and Service Ministries, New Delhi, December 2006).

The negative findings of this report have been widely publicised and misrepresented in the mainstream media to argue that there are massive leakages and widespread corruption, that the benefits are not reaching the intended beneficiaries and that useful assets are not being created. Some columnists have even argued that the entire programme should simply be wound up to be replaced by a strategy of giving skills to the population.

The CAG report actually says something quite different. In fact, the report is not about corruption the word does not appear even once in the entire document and deals only tangentially with specific instances of diversion or misutilisation of funds. True, it does note that the promise of 100 days of employment per household has not been met, but that is well known even from the official figures which show an all-India average of 33 days of work provided to 25.5 million households.

The main focus of the report is on the lack of the administrative capacity to run this scheme in a decentralised manner as desired and the need to build this capacity quickly and effectively. This is evident from the main conclusion: The main deficiency was the lack of adequate administrative and technical manpower at the Block and GP [Gram Panchayat] levels, especially the Programme Officer, Technical Assistants, and Employment Guarantee Assistants. The lack of manpower adversely affected the preparation of plans, scrutiny, approval, monitoring and measurement of works, and maintenance of the stipulated records at the block and GP level.

Besides affecting the implementation of the scheme and the provision of employment, this also impacted adversely on transparency, and made it difficult to verify the provision of the legal guarantee of 100 days of employment on demand.

In other words, the CAG report has pointed out that the programme so far has not done what it was supposed to do to the full extent, mainly because of the shortage of administrative and technical staff.

What it stresses, therefore, is the urgent need to ensure more administrative assistance for the programme at all levels, which really means both resources and personnel devoted to the actual implementation, monitoring and financial management of the programme. This is a very useful and welcome suggestion, which the Central and State governments need to take very seriously.

The report does not by any means suggest that the programme should be reduced or wound up. Instead, it refers to the need to ensure the administrative and technical capacity for the expansion of the programme to all districts of the country.

It is increasingly recognised that the NREGP has the potential not only to generate more employment directly and indirectly but also to transform rural economic and social relations at many levels. Its huge potential is evident particularly from the enthusiastic response of local people, landless and marginal farmers and women workers, wherever information about the programme has been properly disseminated.

But there is also no doubt that this enormous potential is still incipient and requires to be substantially tapped in many different ways. This is because the way the NREGA has been framed and the desired mode of its implementation amount to no less than a social and political revolution.

The programme reverses the way the Indian state has traditionally dealt with the citizenry and envisages a complete change of the manner in which the state, the local power elites and the working classes in rural India interact.

The NREGP is completely different in conception from earlier government employment schemes since it treats employment as a right and is intended to be demand-driven. Furthermore, the Act and its guidelines anticipate substantial participation of the local people in the planning and monitoring of the specific schemes to a degree that has not been at all common.

The recognition of employment as a right (even if it is limited to 100 days per household in the Act); governments obligation to meet the demand for work within a specified time period and develop public works that can be drawn upon to meet this demand, the participation of panchayats in planning and monitoring the works; and the provision for social audit are all very new concepts.

For these to work, there are two minimum requirements: the ability and willingness of local governments and panchayats to plan works and run the programme effectively; and dissemination of information about the programme and its guidelines to local people who can make use of it to register, demand work and run social audits.

Obviously, all this will take time to permeate down to the local levels. So, an uneven record of implementation as well as the presence of a large number of problems that require correction are only to be expected in the initial stages.

There are bound to be difficulties and time-lags in making local officials and others responsive to this very different approach. And, of course, it necessarily challenges the prevailing power structures, in some cases quite substantially. Therefore, attempts to oppose or subvert the correct and full implementation of the scheme in rural areas are only to be expected.

But the hostility in the national media is intriguing. In the last financial year, the programme cost only around Rs.8,000 crore, or about 1.5 per cent of total Central government spending.

As it happens, the apparent misuse of much larger amounts of public funds is rarely covered by the press in a big way, especially when it pertains to expenditure on works, such as major new highways or new airports, that are likely to benefit the urban elite. But on the relatively small amount of money spent on NREGP, there have been shrill and adverse allegations in the media from the very start.

Almost all the media coverage tends to be adverse. This is even though the experience of the NREGP and the degree to which it has been effective vary dramatically across the country, depending upon the extent of social and political mobilisation, the power and capacity of local panchayats, the degree of motivation and enthusiasm among officials of State and local governments, and other factors.

Even with these variations, the overall story is still positive. Many households have been covered, but an average of 33 days work has been provided, which is clearly a step forward. And this will obviously increase over time.

There are also some clear successes, in certain States and districts. It is evident from field reports that there has been some improvement in consumption by the poor, reduction of distress migration and slight increases in lean season wage rates (especially for women) in areas where the programme is successful.

Obviously, these successes have to be sustained, replicated and expanded. And in other areas the weaknesses identified by the CAG and other observers have to be addressed through local mobilisation and other methods.

But this cannot happen overnight; it is necessarily a long process. The important thing is to create a momentum whereby the programme will actually work as intended across the country.

Maybe this is actually what the critics of the NREGP fear: that, far from being an expensive failure, it will prove to be an extremely cost-effective way of increasing employment directly and indirectly, reviving the rural economy, providing basic consumption stability to poor households and improving the bargaining power of rural workers.

If it does all that, it would point to the potential success of active government intervention to generate output and employment, which is seen as impossible by some of these critics. Maybe that is why so much of the corporate-controlled media seem to be actively engaged in trashing it.