Thursday, August 18, 2005

National Rural Employment Guarantee Bill

This is a very significant bill providing guarneteed employment for 100 days to villagers needing jobs. Very ambitious the scheme is.
UPA plays its CMP trump card: job Bill
I am very sceptical on how much impact this will have. There are many govt. schemes providing money for various tasks but none have really effected. This has been due to many reasons. Policies which have defined loopholes, no accountability, corruption and lack of good opposition which raises voice or rather lack of organized public which raises these issues are some of the reasons.

If the current govt can combine several different schemes under te employment guarantee scheme and delegate authority to panchayat (give money to it to carry out these tasks) then this can have great impact. Past experiences havent being good though.

Other point to think about is the economic costs of such a scheme. Economists and "experts" have pointed out that this might increase the fiscal deficit and govt might not have the funds for this. Blah ..blah.. Lets consider this as a part of social security net which the governement provides. By better management of current schemes and correct job allocation this scheme can create lot of resources/wealth for the nation. Just consider using the scheme for road work, infrastructure work, cleaning traditional water structures, creating water harvesting structures, improving/creating physical infrastructure for govt. schools/hospitals/health care centers, ... This will create so much benefit in the long term that this scheme would prove proftable. Need to read more on analysis of this.

Lets face it, even if we grow at 7% per year it will take decades for the benefit to trickle down and above that just GDP growth will create severe disparities as seen but less publicized in the western world. Its a right scheme. But I will reserve judgement on how its structured policy wise and obviously the way its implemented.

Maharastra state has a very similar scheme and some NGO's have organized people and used the scheme for their benefit effectively. Not sure what level of success it has been but its positive. Lets hope that nation wide scheme is also good. I will write further on this once I read up more on this. Feel free to comment and post links to sources.

The draft Bill:

An initial analysis of the bill is here:

Once the bill is passed with all its ammendments, I will try to summarize the various analysis.


At 11:41 PM, Blogger Sunil said...

I'm extremely skeptical about the likely success of the Employment guarantee scheme.....for various reasons.

But meanwhile, here's an excellent article by Dilip, about being skeptical (a situation i'm almost always in....whether it's what the socialists are saying or the free-marketists are saying)

At 9:32 AM, Blogger Rahul said...

Being skeptical is expected looking at the past experiences of various social security schemes (like food for work, food stamp) in India.

But there are several things different about this scheme which gets clear from reading the analysis.
1. This is a binding on the govt. So people can sue the govt. for not providing this.
2. We have Right to Information bill passed. This combined with that can led to better accountability and decresing corruption. Jean Dreze in his studies has found that "food for work" program was manipulated with bogus muster rolls for laborers. Hundreds of people were listed in muster rolls who never worked on "food for work" sites. This was true in UP. But in Rajasthan where Right to information bill was active & movement aroudn it is pretty strong, muster rolls were correct and the scheme worked fine as burerucracy was forced to be accountable. Even in Maharastra with activism & Right to information act (by which you can demand for muster rolls) the scheme is pretty succesful.

When Chennai was here he mentioned how they use to organize argicultural labor so that in off season they use to apply 15 days before for work through the scheme and get it.

There are several flaws in the scheme but I will write about that once the final bill is passed with the changes.

I read dilip's article, it was good.

At 10:10 AM, Blogger Sunil said...

Yes, I hope a lot of positives come out of this any way. I'll be optimistic.

Here's another good post on the EGS (with some good links).

At 2:36 AM, Anonymous Anonymous said...

With corruption at an all time high, how difficult is it for a corrupt official to swindle money from the illetrate and poor? The most untracable form of money is cash and cash is paid in this scheme. Can is get murkier than this?

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