Articles

National Rural Employment Guarantee Scheme (NREGS) - Costly and Corrupting Welfarism

After liberalization (begun in the early 1990s) the entrepreneurial talents of Indians have been having full play. The educated, the enterprising are engaging in various businesses and establishment of companies They are becoming prosperous. IT, telecom, biotechnology, financial, insurance and banking services and real estate (particularity housing) are providing numerous opportunities within and outside the country for the talented not only to get jobs but to found companies and build up fortunes. A huge middle class variously estimated at about 200 mln, centered in the cities and towns is becoming prosperous. eg. In Andhra Pradesh for the recent parliamentary elections, the richest person belonging to the Congress party had declared his wealth as Rs. 170 cr. . Hundreds of candidates declared their wealth as tens of crores of rupees. Stunningly, in the Aug 2009 by-elections to the State Assembly in Karnataka, a person declared his wealth as 770 crores! He is in his early 30s. The disparity between the rich and the enterprising and the rest post-liberalisation is very glaring. It is not that the non-middle class have not prospered. But their prosperity is rising very slowly. There is therefore a great difference in the per capita income (PCI) of the educated & enterprising and the urban elite on the one hand and the rural masses on the other. 72% of our population is still, in the villages. Over -all, literacy in the country is about 65% but in the state of Andhra Pradesh it is less than the national average and in the BIMARU ( Bihar, Madhya Pradesh, Rajasthan, Utter Pradesh). States it is between 45% and 55 % only. The Per Capita Income (PCI) in the Urban areas is about Rs. 60,000 whereas in the rural areas, it is about Rs. 8000. Such is the disparity. It is generally found as an universal phenomena that without development, poverty cannot be reduced. But development produces increasing inequality. In India ( much more so in China) this is very much in evidence.

One great development in our country is that with successive elections, (15 General Elections to the Lok Sabha by now) the value of the vote is increasingly realised by even the illiterate. Elections have educated the mases as to the power of the vote. That is why much unlike in developed countries, the percentage of people voting in our country is quite high. Social disequilibrium will be the product of increasing inequality that is happening rapidly in the country and at the same time, the poor are realizing the power of their vote. Political parties are indulging in populist talk in order to get votes. And since there are several parties (44 are represented in the Lok Sabha) all are singing the song of the poor. The competition to look after the poor is very intense. With every successive election, the amount of promises and their variety have been increasing because man is never satisfied, even if he is satiated. So during election after election, contestants have to promise more and more in the name of welfare. That is why we have competitive promises of free - electricity, free-education, free-housing, near-interest-free loans, write off of loans , old age pensions, nutritious food for children and the pregnant, free health care (Arogyasree in Andhra Pradesh). Rs. 25 railway season tickets for the unemployed, free colour TV sets, bicycles, a month's groceries for families at Rs.100/-, doles for the unemployed, money for marriage, sreemantham....... in fact, a stage when government will give all free to the poor minorities, weaker sections, women (and no mentio o children as they don't have a vote.

The most trumpeted welfare measure is the National Rural Employment Guarantee Scheme ( NREGS). This is the flagship pre-poor, program of the Congress- I . This is promising 100 days of work for one person at least in every poor family with minimum wage of Rs. 100 per day. In the year 2008 -2009 an amount of Rs. 36,750 crores were spent. And for the year 2009-10 Rs. 39,400 cr are budgeted . The families entitled are supposed to be rural poor. In Andhra Pradesh, the poor are identified by the issuance of a white ration card which entitles them to get Rs. 2 per Kg rice, subsided kerosene, gas and sugar and also the Arogyasree card. The welfare amounts to be disbursed are huge . A job card is given to one person in the family. To get more than one job card, the family is split . Every person above the age of 18 gets himself recognised as a separate family. It is quite likely that a family which lives together, now gets 2 to 3 job cards, if there are persons above the age of 18 in the family. As told by the Chief Minister of Andhra Pradesh, himself 9 cr of people in Andhra Pradesh are entitled to Arogyasree health card. That 9cr is more than the 8.5 cr of population in Andhra Pradesh! We now can see the amount of total misapplication of the NREG scheme in implementation. In Andhra Pradesh there are 1.8 cr families with white ration cards. At 4.5 per family, the BPL population is 5.1 crores or or 60% of the state's population! These statistics show how grotesquely the welfare scheme is being implemented. There are cases of political leaders who had been reported to have given a few hundred blank ration cards with signature of revenue officers, as a gift to a newly married couple. They have to just fill up bogus names and can then draw rations at subsidised prices and live happily.

Let me illustrate how the NREG is implemented and with what consequences. In village Angaluru, Krishna district, there are a little over 900 households. 800 of them are registered for NREG cards. Can nearly 90% of the households & population be so poor? There is no activity other than agriculture that requires unskilled labour. The villagers own 5000 acres which require at the most 200,000 man days of agriculture -related work from wage labourers. From these 800 NREG families, there could be 240,000 man days of work ( assuming only one person in the family works) for the entire villages agriculture. There is therefore an un-engaged potential of 40,000 man days of labour. The 800 labourers can therefor be productively engaged, each for 50 days and not 100 days as envisaged in the NREG. What work can there be year after year in the village to engage 800 labourers for 50 days each? The length of the roads and streets is less than 5 km; the public tanks are four. Can the roads require repair and relaying; can the tanks require desilting and repair, every year? What public construction work can there be year after year in the village? There can't be. Therefore ordinarily, the NREG work-card holders will be paid on demand for days they have no work!

There is already an evil consequence. Wage rates have nearly doubled; in some cases trebled. "When for no work, we are getting Rs.100/- day; for actual work we should get double or trible". The labourers say. During the days when agricultural work can't be post-poned ( like transplanting, harvesting) wages demanded for men are Rs.300; women Rs.200/250 per day. Can agriculture be afforded at these farm labour rates? No wonder, farmers are planning to switch over to horticulture, fruit-growing or simply leave some land fallow.

If for an year or two, capital works that build infrastructure in and connectivity of the village is to be improved, there is no money for such projects as permanent and wide enough bridges on canals and black-topping or cementing of roads, construction of welfare hostels or school buildings. Therefore NREG's payments are given-aways for idled people. 75% to 80% of the NREG works' expenditure is on wages.

Some of the ways that idle men who are yet paid can be used are:

• Tree planting & their care; greening and keeping up the greenery on both margins of the roads/streets.
• Dig and keep up storm/ rain water drains along all the village's streets
• Tank bunds developed as parks; and rest and recreation places under shade
• Keep roads/streets and drains garbage and silt-free
• If people are not willing to do these works, they should not be entitled to any NREG payments for the days they refuse to work.
• Restrict the NREG application to families with two or less children only.

Let us look at the colossal sums involved and whether there are better values and uses the NREG allocations can be are spent. For the year 2008-09,the amount spent was Rs.36,750 crores and for the year 2009-10 the allocation is Rs. 39,400 crores. There are in the entire country 88.5 mln landless labourer and small and marginal farmer rural house-holds who are eligible for the NREG scheme. (If A P's corrupt enrollment is repeated all over the country these will be 250 mln house-holds). Each house hold would get Rs. 4,450 per ear! The total share of BPL population in India would decline from 136 mln in 2004-'05 to 79 mln. But 24 years ago, the late Rajiv Gandhi observed that only 16 paise out of every rupee meant for the poor, actually reaches them. It can now not be more than 10 paise in Andhra Pradesh . Much money spent is not going into creation of for long useable, socially beneficial infrastructure (MPLAD schemes are other embezzlers of public money) .

The table below gives particulars of implementation of NREG in Andhra Pradesh for the period 2008-'09. The following deserve our attention.

Total No of Districts under EGS = 22 ; Total No of Mandals = 1098
Total No of Grampanchayats = 21856; Total No of Habitations = 68972
Total No of Jobcards Issued = 1,16,12,052; Total No of Adult members enrolled in Jobcards Issued = 2,64,96,769

We can see the great under-performance. This can only be due to insufficient commitment on the part of implementers. The high labour content (75%) shows that works under NREG are not creating durable assets. This is the tragic part of NREG. The total number of job cards (1,16,12,052) in A.P represents 50% of the families. This BPL figure is more than double the figure claimed by the GOAP in several fora and nearly confirmed by the National Sample Survey of House-holds These figures in relation to the whole of India are worse as they include the notoriouslyl inefficient and corrupt states like Bihar and UP.

Who (all -India) availed of the NREG is:

SCs = 23.04% STs= 8.2% Women= 18.49% Others= 68.77%

Since SCs and STs are mostly landless and live on wage labour, should we not expect that they should have together constituted over 65% and not 31.24% of the beneficiaries? In distributing welfare benefits too, there is inequity!

The moral issue in getting fed without work is the most serious.
"Thou shalt live by the sweat of thy labour" is Jesus Christ's message.

"Nija karmopattam vittam tena vinodaya chittam"

"You must delight ( only) in the wealth you earn by your own labour"
says Sankara in Bhaja Govindam
The Kathopanishad has the following instruction .

Anyachreyo anyadutaivah preyaste
ubhe nanaarthe purusham seneetah
tayoh sreya aadadaanasya saadhuh
bhavathi heeyathe arthaadya vu preyo vrineeta

Sreyascha preyascha manushya metastau
Samparithya vivinakti dhirah
Sreyohi dhirobhipreyaso vruneethe
Preyo mando yogakshemaath vruneethe
- (2)-1, 2

The good is thing, the pleasant is another. These two lead man to very different ends He who chooses the good attains happiness. He who prepfers tehpleasant ever loses his oject. The wise aer nto deceived by the attractions of the pleasant. They choose the good . Fools are snared into eh pleasant and perish.

The NREG has a lofty aim: alleviate the poverty of the most poor (BPL) but what in effect it is doing is feeding idled people. It is creating employment without work, to a significant extent. Many children, illiteracy, lack of skills and unemployability of the under-educated literate are he reasons for persistent poverty. Spending Rs.38,000 crores ( ultimately about Rs.70,000 crores) per year is largely a waste. We could restrict it to those who want to help themselves; that is who have only one or two children; to those who are willing to move to where productive, asset-creating work is (as for example canal-digging under Jalayagnam projects). The cost of movement can be part of NREG expenditure; so could the arrangements for their camps and care of children (under age 10), of mothers moved. Think of the Rs.4000 cores/spent on education instead of NREG in our State. It would mean 20,000 school buildings ! Or with half that money, our Primary Health Centers (PHCs) can provide excellent health services in the rural areas, voiding much of the costly Arogya Sri costs. By giving money to people without taking work from them, we are reducing them to beggars; expecting only votes in return for money distributed. We are encouraging dependency on government and so corruption and self-debasement (Aatmaavasaanam) instead of ennoblement (Aatmodharana). We are making agriculture unremunerated and unattractive. We may recall that decades ago Maharashtra launched an Employment Guarantee Scheme (EGS). Any one willing to move to a project site was given work and wages That was before Indira Gandhi's Garibi Hatao slogan. The scheme had no takers after the Garibs became Narayanas to be extolled, solicited and bribed during the frequently and at different times held elections ( Parliament, State Assembly, Zilla Parishad, Mandal, Panchayat - i.e year round elections like our several festivals). China has solved its BPL problem by the three-in-one policy and programmes (I) of one child only per family (ii) 100% literacy and educated upto SSC level and (iii) moving people to where work is (Plan Projects). We are spending money without achieving the intended lasting result.

There is in addition, the ethical question for political leaders, parties and intellectuals. Should their aim be merely getting votes by pleasing people before elections ( by promises like colour TV sets, loan-waivers, free rice, paavala vaddi loans (to be waived before elections), subsidy to go on pilgrimages to Makka and Jerusalem, state-aid for marriage and seemantham, English medium education ( for those who can't write and read even Telugu, their mother tongue), free electricity ( for a few hours !) ? Is this not ethical depravity? Leaders must lead by educating and inspiring people as Gandhiji did and not by bribing people with goods and services that don't create and enhance talents for employability Jawaharlal Nehru said that much good would come to the country if politicians learn to say No to what populace ignorantly desire and demand and government officials learn to say Yes. Lal Bahadur Sastriji used to say "aaraam haraam" I.e idleness is sinful. Do any of present-day leaders exhort, educate and inspire people and ignite their intelligence ( Dhiyo yo nah prachodayaat)? They and the 400 TV channels are engaged in idiotising Indians through mindless, worthless "serials" (of instant and illicit love, seduction, elopment, love-lorn suicides are the result"

I would end this with the invocation:

Svasti prajabhyaam paripaalayanthaam
nyayeana margena mahim maheesah
gobrahmanebhyah shubamsthu nityam
Kaale varshatu parjanyaah
Prithvi sasyasaalinee, bhavanthu
Deso ayam khhobha rahitah bhavatu
Brahmanaah santu nirbhayaah
Lokah samastha sukhino bhavanthu
Om! Shantih, shantih, shantih

May there be well being to the people;
May the kings rule the earth along the right path;
May the clouds rains in the proper time
May the earth bear abundant crops
May this land be free of crisis
May intellectuals be fearless
May all the peoples in all the worlds live in happiness.
May there be peace everywhere ( In the waters, on the earth and in the skies)

I have used rather strong expressions in the style of Nobel Laureate John Maynard Keynes who said "words have sometimes to be violent as they represent the assault of thought on the unthinking".