Monday, September 05, 2005

EGS - A scheme to reduce employment(poverty) or a way for the corrupt to make more money?

So now that REGS has been passed it remains to be seen whether this will help reduce poverty or just serve as an scheme for making more moeny for the people in power?.

A quick background: REGS will provide employment for 100 days per year per rural household @ minimum wage (~Rs.60 per day).
The REGS bill presented by governement in Parliament can be found here. Several crituquies of the scheme from right to food campaign can be found here. This article gives you a almost all the information about what the scheme constitutes and money needed and other details.

Some opinions:
Atanu Dey argues that this scheme will only deepen poverty.
"In summary, the NREGS will have the expected effect of deeping poverty and enriching the bureaucratic and political intermediaries."
In this blog entry, posted by Ramdhan Yadhav the argument is for employment gurantee scheme stating the unemployment numbers and how the scheme could be beneficial.

The scheme if implemented even partially as proposed can act as a great source of employment generation, infrastructure building in rural areas, reducing rural-urban migration, increasing purchasing power of rural India, reduce deaths due to food scarcity etc ... the potential for this scheme to do good is enormous.
But ... India after independence has had several "similar" schemes like rural employment schemes, food for work program etc. Even now we have a food-for-work scheme going on in 150 districts in India. So what are the results of the implementation of this scheme?. Dismal.
There have been several corruption cases in this scheme. There has been no formal analysis done by the government on the results of the scheme.
Jean Dreze , one of the authors of EGS scheme, has done extensive studies of food-for-work scheme and similar schemes implemented in India. The conclusions from these are that such schemes are sources of rampant corruption. None of the schemes have benefited the poor but only acted as sources of money for the corrupt. Similary the experiences from the Maharastra EGS are dismal.
But the picture is not all that bad as it seems. Combined with Right to Information, this scheme can be enforced by people. As Jean Dreze mentions in his studies, the experience of food for work program in Rajasthan was very different than other studies. And the difference was RTI in Rajasthan. People could ask for muster lists (registers with info on employment) and check these for any irregulatries. This together with activist people helped reduce the corruption. This can be done on a larger scale.

Summary: The track record of similar schemes in India is very poor. But this scheme has a great potential to improve lives of masses and if enforced by people (mass movements, NGOs) can do wonders. Govt of India should before starting the scheme ensure safeguards so that scheme is not manipulated. Also we need mass movements to force enforcement of this scheme with help of RTI.


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At 9:50 AM, Anonymous Anonymous said...

My take....i'm cynnical, and expect the "Rajiv Gandhi percentage" (15% of funds allocated) to reach the ground....

At 9:51 AM, Anonymous Anonymous said...

My take....i'm cynnical, and expect the "Rajiv Gandhi percentage" (15% of funds allocated) to reach the ground....


At 7:01 PM, Blogger Rahul said...

If the "Rajiv Gandhi percentage" is what we get out of the scheme then this scheme might cause far more damage than good. The amount of money govt. will spend on this diverting from everything else is huge. The economic costs are huge and hence the stakes are high.

I want to be optimistic but ...
Govt should have gone to improve land reforms which never have been implemented. It has been documented at large that east asian economies (japan, Souh Korea etc) developed a lot due to the initial land reforms movement they had. Even in India a large part of human development in Kerala is associated with this.


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