Asia-Pacific, Development & Aid, Economy & Trade, Headlines, Labour, Poverty & SDGs

DEVELOPMENT: India Passes World’s Biggest Job Guarantee Plan

Ranjit Devraj

NEW DELHI, Aug 23 2005 (IPS) - India’s communist-backed coalition government, led by the Congress party, passed revolutionary legislation in parliament Tuesday that guarantees 100 days of employment annually to every rural household in India, ignoring critics who said the law was impracticable and would foster corruption.

”This is the most important piece of legislation on behalf of India’s impoverished millions since India won its independence in 1947,” said Prabhat Patnaik, professor of economics at the prestigious Jawaharalal Nehru University (JNU), in an IPS interview.

The National Rural Employment Guarantee Act promises wage employment to every rural household in which adult members volunteer to do unskilled manual work – a form of direct intervention intended to alleviate poverty in India’s long-neglected rural hinterland, where 72 percent of its billion-plus population lives, according to the 2001 census.

Patnaik said that because of its grand scale the programme could be regarded as one of the biggest steps so far in meeting the United Nations Millennium Development Goals (MDGs) – which include halving global poverty and hunger – by 2015, ”although this is hardly the aim of the legislation.”

Essentially, he said, the government would be committed to spending ten billion dollars annually (slightly more than one percent of gross domestic product, GDP) to ensure that impoverished rural households earn at least 60 rupees (about 1.50 U.S. dollars) a day for a minimum of 100 days a year.

”I would have personally preferred that the programme was based on individuals rather than households,” said Patnaik, indicating the many pulls and pushes that went into shaping the ”landmark legislation.”

Right-wing economist Surjit Bhalla said the law opens the floodgates to widespread corruption through the ”fudging of muster rolls,” which he said was a practice all too common in India.

But Patnaik said such major legislation that empowers rural masses could not be held up for fear of corruption.

”Corruption is everywhere and this country already has laws to counter it, such as the right to information, which are being used to monitor implementing bodies – it will take time for things to smoothen out but eventually they will.”

The legislation is the brainchild of leading social workers and Indian economists, including Patnaik and the Belgian-born Jean Dreze, professor of economics at the Delhi School of Economics, all of them grouped under the powerful National Advisory Council (NAC) that advises Sonia Gandhi, who chairs the ruling UPA coalition.

Many of the original recommendations of the NAC were subsequently watered down by bureaucrats anxious to limit the liability of the government. One is the principle of self-selection and universality when it comes to deciding who would be eligible.

Nevertheless, Tuesday’s legislation enforces an obligation by the government to provide employment or else pay an unemployment allowance, although the actual implementation would differ widely from state to state.

Patnaik said deciding minimum wages should have been left to each state, rather than fixing it at a flat 60 rupees, since some progressive states like southern Kerala already had a fixed minimum wage that is more than twice that figure at around 134 rupees, or more than three dollars.

A key feature of the new law is that it will be implemented through elected local bodies and non-governmental organisations (NGOs), unlike earlier poverty alleviation programmes that were tightly controlled by the central or state governments.

Some 200 districts, including 150 districts already covered by an existing ”food-for-work” programme, would benefit initially. It would then be gradually extended over the next five years to cover all of the country’s 600 districts.

Deciding on what households will actually benefit is still vague because of differing assessments of poverty and deciding what exactly the poverty line is.

According to the World Bank, more than 30 percent of Indians live on less than a dollar a day, but Indian economists believe that the figure could be higher than 40 percent of the population, especially in rural areas.

Providing 60 rupees a day for 100 days a year still worked out to an average of 500 rupees (12 dollars) a month to a family deemed to be poor and critics said this was grossly insufficient.

But federal rural development minister Raghuvansh Prasad Singh said during the parliamentary debate that preceded the passage of the bill that it was a beginning and one which was bound to make a dent in rural poverty and afford protection from hunger, especially during lean seasons.

According to Dreze, one of the important consequences of the legislation would be to stem the continuing large-scale migration of people from the rural areas to India’s cities in search of employment, and who often end up being exploited.

Dreze said since a large proportion of labourers working under the employment guarantee law were likely to be women it would go a long way towards counteracting gender disparities, one of the MDGs.

Finally, the law would ”provide an opportunity to create useful assets in rural areas” and Dreze pointed to a ”massive potential for labour-intensive public works in the fields of environmental protection, watershed development, land regeneration, prevention of soil erosion, restoration of tanks, protection of forests, and related activities.”

He also saw the law as providing a chance to foster a more equitable social order within rural societies and also empower local bodies such as the panchayat where a third of elected seats were already reserved for women and were beginning to assert their authority.

Recently, for example, a panchayat in Kerala withdrew the licence for a 25-million-dollar bottling plant set up by Coca-Cola on the grounds that it was mining fresh water from deep underground aquifers and polluting the environment with effluents.

Dreze said over the last two decades India’s upper crust had ”transplanted itself literally to the first world without even applying for a visa” and that the time had come to share some of that wealth.

The present government led by Prime Minister Manmohan Singh was unexpectedly propelled to power in May last year on the widely-held perception that the preceding right-wing, Bharatiya Janata Party (BJP) government was only interested in further enriching India’s urban elites.

Soon after the passage of Tuesday’s bill, BJP spokesman Vijay Kumar Malhotra said while his party welcomed the legislation it would like to see similar employment guarantees made on behalf of the ”urban poor.”

The bill represented fulfilment of a key promise made in the ”common minimum programme,” which holds together the ideologically-disparate political parties that form Singh’s Congress-led UPA coalition.

But credit for propelling the bill should go to the communist parties that guarantee the continuance of Singh’s government in power.

”The law is a call to tax the rich and pursue a pro-poor, growth-oriented policy. Failure to pass it would have eroded the very legitimacy of the UPA government and undermined its mandate,” said D. Raja, national secretary of the Communist Party of India (CPI), which originally pushed for 180 days of guaranteed work a year.