Hardly job guarantee

The initial numbers put out at the first anniversary of the UPA government's flagship programme, embodied in the National Rural Employment Guarantee Act (NREGA), confirm in some ways what the sceptics said when it was launched, but they also support the proposition that such a programme will meet a felt need. The rural development ministry has interpreted the figures to show that the programme in its first year has had 33 per cent success, but that is a poor number to be boasting about. Of the 15 million households who asked for jobs under the scheme, and who should have been provided work within 15 days of asking for it, 14.7 million were indeed provided work. But while each household should have been provided 100 days of employment in the year, the average number provided was only a third of this.

The logic of the scheme has also come into question. By design, only the poor were supposed to benefit and the programme was meant to be self-selecting on the assumption that only the poor would want to do a hard day's manual labour for Rs 50 in return. In the 200 selected districts, the official NREGA booklet says that a little over 30 per cent of the population is poor""the number varying from 7.9 per cent in Karimnagar to 36.1 per cent in Chittoor, both districts in Andhra Pradesh. Yet, over 64 per cent of the households in these 200 districts have got job cards issued for themselves. It is true they haven't all gone and asked for work as yet, but they have the option of doing so. This could be viewed in two ways: that the scheme is being misused by the non-poor, who were not supposed to be its beneficiaries; or that it proves the importance of the scheme in the countryside in that it is meeting a felt need for much larger numbers of people than was initially assumed.

There is the issue of what it costs to create such work. Here, it must be said that, thanks to the use of solutions that apply information technology, the costs have worked out lower than in the past for similar schemes. In 2004-05, to create 823.33 million persondays of work under the SGRY scheme, the government spent Rs 5,994 crore in cash and another Rs 5,000 crore on foodgrains (5 million tonnes), translating into Rs 133 to create one personday of work. In 2005-06, the numbers rose to Rs 6,201 crore in cash and Rs 3,500 crore for foodgrains (3.5 million tonnes) to create 487.5 million persondays of work, totalling up to Rs 198 per personday. The NREGA, in sharp contrast, has stuck to its budgeted figure of Rs 100 per personday.

The larger question is what the scheme does for overall employment creation and poverty reduction in the country. In these 200 districts, the scheme created 5.3 million jobs (assuming 100 days of work a year is sufficient to qualify as a job). Given the work force of 400 million, that's not much. There are no estimates of what the scheme has done for poverty reduction. Even if the annual expenditure climbs to (say) 1 per cent of GDP, what impact will it have on the employment or poverty situation? And since several field reports in the media suggest less than perfect implementation, and many operational lacunae, the final question is whether the country is getting enough by way of return for the money spent.