A convention organised by SAHMAT in New Delhi outlines the framework of an Employment Guarantee Act that will assure livelihood for a vast majority of the country's population.
THE 1990s were marked by the dominance of deflationary macroeconomic policies and falling public development expenditure. These led to an unparalleled and comprehensive crisis in rural India, resulting in impoverishment, food shortages and hunger. The per capita availability of foodgrains fell to such low levels as were last seen during the worst famines of the colonial period. An important reason for this state of affairs is the declining agricultural growth rate.
The other contributory factors are the fall in purchasing power owing to the contraction of the public works programmes and employment generation activities of the state. Farm incomes too have fallen thanks to rising input costs, a simultaneous fall in prices and also the withdrawal of the state from areas such as credit, extension services, procurement, price support and infrastructure. Indebtedness and land alienation have grown, particularly amongst small and marginal farmers.
Workforce participation rates in rural areas have declined, more for rural women than for men. There is a growing gender-based division of labour in rural areas, with lowly paid menial and arduous work going to women. This is compounded by the overall decline in women's employment in the post-reform phase, from 1.41 in 1983-1993 to a mere 0.15 per cent in 1994-2000.
The Planning Commission reports a fall in employment growth from 2.04 per cent during 1983-94 to 0.98 per cent during 1994-2000 largely on account of the crisis in agriculture and community social and personal services, which together account for seven-tenths of total employment. Even though this was accompanied by a deceleration in the rate of growth of the labour force from 2.29 per cent in 1987-94 to 1.03 per cent in 1993-2000, unemployment has grown because the growth of the labour force outstrips the growth of employment. The extreme manifestations of this distress are the unabated starvation deaths and suicides by farmers.
The 2004 Lok Sabha elections saw the people overwhelmingly reject neo-liberal policies. Despite its commitment to the liberalisation-globalisation-privatisation mantra, it has become clear to the Congress that an Employment Guarantee Act (EGA) and revival of agriculture are political necessities. The United Progessive Alliance's (UPA) Common Minimum Programme had promised the reversal of some neo-liberal policies. Towards this end, the UPA government at the Centre prepared a draft Employment Guarantee Bill which is expected to be tabled in the winter session of Parliament. However, some sections in the government and outside are opposing the proposed Bill, and are expected to prevent its passage itself, or reduce it to a formality by diluting it substantially. Moreover, the draft itself contains a number of problems.
ON October 19, the Safdar Hashmi Memorial Trust (SAHMAT) organised a convention in Delhi to reaffirm the centrality of an EGA, and to outline the framework of an effective Act that will promote the interests of working men and women and ensure that State governments can implement it without any additional financial burden. The meeting, chaired by All India Democratic Women's Association (AIDWA) president Brinda Karat, was attended by political leaders, activists and academics like Jairam Ramesh, Sitaram Yechury, Sehba Farooqi, D. Raja, Prabhat Patnaik, Aruna Roy, Jean Drze, Medha Patkar, Arundhati Roy, Suneet Chopra, Sukhdev Thorat, Dunu Roy and Jayati Ghosh.
The speakers agreed that the EGA, apart from protecting the rural population from hunger and destitution, would contribute to many other social objectives, including the creation of durable assets, protection of the environment, empowerment of women, and slowdown of rural-urban migration. In addition, there would be strong multiplier effects of such employment, which would therefore have a positive effect upon rural livelihoods.
S.K. Thorat of the Jawaharlal Nehru University argued that the Act was neither charity nor financially unviable, and in a demand-constrained system like India's, an increase in purchasing power will generate growth with equity.
The EGA has immense political significance in the current regime of neo-liberal economic policies. The introduction of such an Act is therefore an important avenue for mass mobilisation and resistance against neo-liberal policies. As social activist and Magsaysay award winner Aruna Roy put it, the Act is a recognition that the state cannot retreat from pro-poor development and has to ensure livelihood security and employment.
Narmada Bachao Andolan leader Medha Patkar too emphasised the stark conflict between different policies in the context of the EGA . In particular, she spoke of the possibility of people fighting to regain control over common property and natural resources through decentralised planning, and land and water management through the EGA.
One of the biggest lacunae in the Ministry of Rural Development's draft Bill relates to the sharing of expenditure between the States and the Centre. The finances of State governments are under severe strain largely on account of policies beyond their control, such as interest rate policy and access to borrowings. At the same time, most social and economic development activities and the provision of infrastructure are the responsibility of the States. Also, it is constitutionally not possible for the Central government to impose financial burdens on the States without conformity Acts being passed in each State Assembly, a procedure that is likely to cause long delays.
In the interest of fiscal federalism, therefore, the convention proposed the following: "The Act should not impose any additional financial burden on the State governments. The employment guarantee programme should be fully financed by the Centre... The wage contribution of the Centre must extend at least to a national norm initially fixed at no less than Rs.66 per day, and indexed to the All India CPI-AL for future revision. Additionally, the Centre should finance material costs in the ratio of 70:30 labour:material.
When there is a delay in the devolution of funds to the State government from the Central fund, the Central government must reimburse the State government for the associated unemployment allowance payments. To meet the administrative costs of the programme, the funds devolved by the Centre to each State should include an additional component amounting to 5 per cent of the total spending on wages and materials."
The Ministry's draft guarantees 100 days of manual unskilled labour per rural household that registers. A failure to do so within 15 days of application would make the applicant eligible for an unemployment allowance of at least a third to half of the wage rate.
Brinda Karat pointed out that the entitlement itself was a problem as it was restricted to 100 days a family instead of being made available to all rural adults. She also did not agree with the definition of work and household. `Manual' work, she argued, often meant that women would be excluded from it, which was dangerous in the context of the abysmally low levels of employment of women and of wages in the rural areas surveyed by AIDWA. Moreover, she said, there should be individual entitlements; otherwise women would be excluded. In any case, she argued, the definition of a household was fraught with difficulties since the absence of homesteads meant that a number of families shared the same roof and kitchen.
Sehba Farooqi of the National Federation of Indian Women said that care should be taken to ensure that female-headed households are given primacy and women are not excluded from the scheme. Towards this, the Convention proposed that the Act "should safeguard the interests of women and give full attention to their concerns with regard to availability, location, type and organisation of work.
In the unfortunate event where the employment guarantee is restricted to a specified number of days per household (as proposed in the Common Minimum Programme), it should be ensured that at least 40 per cent of workers employed in a particular Block are women, so that women are not pushed disproportionately on to the unemployment allowance or out of the scheme."
MOST speakers contested Congress Member of Parliament Jairam Ramesh's view that there was no contradiction between the policies of liberalisation, privatisation and globalisation on the one hand and employment guarantee on the other. The economist-politician, who is a member of the National Advisory Council of the Central government, argued that the real conflict was between the interests of the unorganised rural workers and those of the small section of organised government employees. He said that the Sixth Pay Commission would erode the very possibility of an EGA since the government had a financial constraint. Thus, according to him, the choice was between government employment and universal employment guarantee.
The EGA is a matter of political will rather than finances, said Communist Party of India (Marxist) Polit Bureau member Sitaram Yechury. He argued that the EGA was non-negotiable and the so-called conflict between organised versus unorganised labour was a red herring. He said taxing the rich was the best way to pursue a pro-poor and growth-oriented development policy. A failure to do this would erode the legitimacy of the UPA government to remain in power. He gave a call to extend the universal guarantee simultaneously to urban areas.
D. Raja, National Secretary of the Communist Party of India wanted the UPA government to recognise the gravity of the situation on the ground, based on which the Left Parties had originally asked for employment guarantee of at least 180 days to be included in the CMP. He said the issue was not one of finances or requirement but of political will to take the EGA forward, so that it did not remain a mere formality but was an effective livelihood guarantee. The "schizophrenic commitment" to both deflationary fiscal policies and an EGA is not sustainable, he said.
Economist Jayati Ghosh of JNU refuted the theory that the Act was unaffordable. The mainstream media and those sections that directly benefited from the policies of neo-liberalism are playing upon the insecurities of the middle class by stating that a universal rural employment guarantee will impose a tax burden on the middle classes, already burdened by high inflation, she said.
She also pointed out how the Finance Minister "gifted" Rs.5,000 crores to a handful of traders at the stock exchange by diluting the turnover tax, which was a simple measure for raising revenue. The removal of the capital gains tax was justified on the basis of the higher turnover tax, but even after retracting on the turnover tax front, the capital gains tax has not been reintroduced. So the issue of finding resources is really a political one.
She argued that if the tax-GDP ratio was restored to the 1991 level, there would be enough money not only for a universal urban and rural employment guarantee but also for mid-day meal schemes. If it were increased slightly, it would also pay for free universal primary education, and other projects. She said that the Fiscal Responsibility and Budget Management Bill was dangerous as it tied the hands of the government. She argued that there was no harm in printing money to finance development schemes, since this was not inflationary in the current context, with wage goods and excess foreign exchange reserves available in the system.
Dunu Roy of Sajha Manch, a consortium of NGOs working amongst the urban poor, argued that employment opportunities in urban areas are decreasing, owing to the same forces of liberalisation and globalisation that are ruining rural economies. First, the shift in emphasis from manufacturing to the services sector means that jobs in the formal sector are not increasing. Secondly, workers are pushed into the informal sector through factory closures, privatisation, voluntary retirement schemes, and retrenchment. And thirdly, the informal sector is becoming illegalised through the efforts to "clean" the "global" city.
THE Draft Bill is mired in all kinds of myths and misunderstandings, and is even called a `crackpot' Act, by some of its adversaries, said Jean Drze, a member of the National Advisory Council on Education. He said the EGA was a very practical piece of legislation with potentially far-reaching economic, social and political implications. He stressed the need for an Act, and not just a scheme, as a legally enforceable right to work would give bargaining power to the workers and make the state accountable. He warned against attempts to dilute or sabotage the draft Bill and argued for the immediate enactment of a full-fledged employment guarantee.
Writer Arundhati Roy put the struggle for an EGA in the larger context of resistance against global imperialism. She pointed out that there was strong opposition to the Bill from the corporate media and other privileged interests, because it threatened their game plan for the Indian economy.
Prof. Prabhat Patnaik of JNU warned against the forces that militated in different ways against the provision of an effective EGA. He said that finance capital stood in direct conflict with any policy that was non-deflationary in nature and had the potential to revive the rural economy and increase public expenditure. These forces, he said, could act in three different ways: by openly thwarting the EGA in the name of inadequate funds; by resorting to manipulations and machinations that put one group against another and by creating false vested interests like organised versus unorganised workers, tax payers versus the rural poor; through the Bretton Woods institutions like the World Bank, which could appropriate the scheme by offering to fund it against all kinds of conditionalities.
He argued that these attempts should be resisted. This is a timely warning since it is already evident that the government is trying to kill the spirit of the Act by enacting a targeted scheme restricted to 150 poor districts in the country without any commitment to expand its scope.
Smita Gupta is a Fellow of the Institute of Human Development, New Delhi.
