World Bank sees NREGS as a barrier to economic development

The World Bank has described the much-acclaimed National Rural Employment Guarantee Scheme (NREGS) of the UPA government as a policy barrier hurting economic development and poverty alleviation.

Various schemes of the Indian government like NREGS, watershed programmes and schemes for development of small and medium towns are acting as “policy barriers to internal mobility”, the bank said in its ‘World Development Report 2009’.

The internal mobility, the report argued, is necessary as “lifting people out of poverty requires shifting populations from villages to cities”. The process of migration should be encouraged, the bank said.

“Negative attitudes held by (the) government and ignorance of the benefits of population mobility have caused migration to be overlooked as a force in economic development,” it said.

The report said economic benefits of migration are not always recognised by policymakers and, in fact, two forms of policy have been attempted in India to counter migration.

“The first response has been to increase rural employment, in an attempt to stem movement out of rural areas... These measures include the recently introduced National Rural Employment Guarantee Programme,” it said.

The World Bank cited other programmes such as watershed development to improve agricultural productivity and development of small and medium towns, which the Indian government has taken up to reduce migration.

“The second policy response is implicit. Because of the perceived negative effects, local governments remain hostile toward migrants, while employers routinely disregard laws to protect their rights and needs,” the report said.

In many cases, welfare policies and social services are designed for a sedentary population, the bank said.

“This is best exemplified by location-specific entitlements to social services, housing subsidies, food rations, and other public amenities especially important to working poor people,” it said.

The report, which recommends concentration of production and mobility of people, said, “Current policies do not allow communities to fully capture the benefits of labour mobility.”